How i lost $1,000,000 starting an Esports team…

I spent a million dollars on my Esports team and made a total of zero dollars hi I’m disguised toast and today I’ll be telling you all about how the Esports industry is one of the worst thing you can get into four months ago I announced I created an Esports team and that it

Would cost me five hundred thousand dollars to run it for a year Well since then I decided to also pick up a League of Legends team and everyone told me that that’s the second worst idea I’ve ever had the worst one being starting an Esports team so if you don’t know a

While ago all 10 League of Legends team in North America voted to um remove the requirement to have a secondary team like a Challengers team it’s called The Academy team where you basically Foster and grow talent to One Day become like Pro players thing is this whole secondary team thing didn’t really work

Out because it was just a place for old player is to kind of retire so I wasn’t really growing new Talent so when Riot offered the opportunity to all these org owners hey do you guys want to keep this program going they all voted no because

What better way to save money than to fire your secondary team you save a lot of money doing that actually problem is this change was supposed to take place next year but it happened this year and nobody told the players so now um there are a whole bunch of kids without a job

In Los Angeles because they had to be in LA to be in this program and with the Esports procession in full effect it’s not looking good for uh the players the orgs the League this move was so controversial that all the pro players protested by just not playing the whole season has

Been delayed by two weeks so when I see something on fire when I see a stock that’s like all the way on the most downwards trajectory possible I think to myself hey what a great opportunity one man’s trash is another man’s less trashier trash but

Still kind of trash I saw this and as someone who has been playing League of Legends for like a decade I want to pick up some of these players you know that are now jobless and kind of keep their dreams alive and maybe bring some excitement back to the League of Legends

Scene God knows they need the help so that’s why um I started a league team very silent it’s the IRS wondering why I lost all my money this year so then last week my accountant messages me and says toast we need a talk and I was like oh that’s

Kind of scary why are you talking like that well he told me that I’m actually on track to spend a million dollars this year double of what I was expecting and he sent over the spreadsheet with all these red numbers and I noticed that in the revenue section it was all blocked out

And asked him why’d you block it out he said well it’s not blocked out there’s just nothing there you’re not making any money then well how do you actually make money in Esports well if you look at any Esports org in North America all of them

Are either broke or going broke and I do mean all of them like some orgs will try and like put on a front and say hey we’re still good we look good everything’s cool here trust me when I say everyone is losing a lot of money A

Lot of people are being fired no org is safe right now layoffs are happening almost every week because if you can’t make money which no one is doing then you need to stop spending money a penny save is a penny earned so obviously my first thought is well why don’t I just

Get some sponsors as I’m sure all of you are thinking like sponsors sponsors will give you money to run your team right because sponsors gave all these other teams money and to run their teams hey Mr sponsor would you like to give us money and we’ll display your logo on our

Social media or on our Jersey and we’ll promote your products well it turns out that after 10 years of Esports teams kind of um lying misleading is the nicer term by saying hey give us some money and we’re gonna use this money we’re gonna get this Korean

Player and we’re gonna win the World Championship then you’re gonna be really popular no one did that the winning part they definitely did the Korean import part so 10 years of this of orgs constantly saying hey sponsor us we’ll put you in our YouTube video Promise YouTube video that these orgs are

Putting out they get like 5 000 views here’s an example I don’t know which example is gonna be displayed I’m gonna leave that up to my editor it’s not me roasting these orgs it’s my editor I swear but man there are a lot of orgs with uh YouTube content that aren’t being

Watched and each of a lot of them have a sponsor High to them and you look at the views as like 5K and these orgs got paid like tens of thousands if not hundreds of thousands to do this video 10 years of this um has made it so surprised Brands don’t

Want to be in Esports because they’re tired of bleeding money and I kid you not I had an experience we approached this very high profile energy drink brand who is currently sponsoring another really high profile Esports org and we went to them and we’re like hey

You know we noticed you’re kind of in the Esports space we will love it if you guys partner up with this here are our numbers our YouTube numbers do twice as good our Twitter engagement is 10 times better and we only want half the money so like can we work something out and

They said sorry we’re leaving Esports and the only reason why we’re still sponsoring this particular org is because our contract length so it ends next year and we are out of here because they definitely did not deliver on what they promised and that’s pretty much the story across the

Board brands are scared of Esports because they invested millions and millions into it and they never got any significant return and no team ever really stopped in last decade and really asked themselves hey how do we really create a sustainable model how are how can we be financially responsible to our

Investors and to our sponsors no it was pretty much like hey we need money to get players we need money to sign streamers we need money to do this we need money to throw a big party because it’s all about how we are perceived it’s not it’s about it’s about money how can

You survive all the orgs are now realizing oh you can’t so what I’ve been doing is I’ve been working a little harder on my own stuff I’ve been taking the most sponsors I’ve ever taken in my career because every sponsor is like being able to pay for one more players

You know salary for the months right and keeps the history going and buys me more time well I figure out how to make it all work merch is another big thing that people always point out hey do merge get merged get some jerseys God damn you

Toast we want to spend money well I don’t think merch is something like that will solve a lot of these big points is like not a long-term sustainable model for Esports it definitely helps a lot it’s been proven to make a decent amount of money and that’s why Orcs like under

Thieves and Team Liquid they’re always constantly promoting their merch and they’re constantly doing a lot of drops because it’s like a proven way and one of the very very few ways to actually make money but it also takes like minimum six months to create good pieces good drops and while yes I could

Have taken the DSG logo and slapped it on a yellow t-shirt and sold it for 20 bucks and people definitely would have bought it I’ve always been very fixated on providing higher value when it comes to like merch like even my plushie um I like my plushie I think it’s very like

Well made that you know the Hat stays on you got a big old mustache sunglasses you know it’s nice it’s simple it’s high quality I think I sell these for like 25 bucks maybe it should be 30 bucks because of inflation these days but I make a dollar one dollar from each of

These and these are constantly sold out I’m just happy that people are happy with this and it’s the same approach I would take with the DSG merch which is why it’s taking so long please be patient I will work on it still gonna take a while it’s probably gonna take

Six months from now maybe I’ll get it out by Christmas who knows but the most important thing is when it comes to like streamer relationship not that we have a relationship viewers I’m not a parasocial like that but you know our career is based on fans supporting us

And if I’m like gonna sell you guys something It’s gotta be worth it my biggest fear is someone buying something off mine or like giving money to me in any way but feeling like after oh this wasn’t worth it that would make me feel terrible um I did think of this last

Um way to make money that’s worth looking into which is only fans except without the boobs so patreon um essentially fans on patreon usually pay a few bucks a month you see some cool and special content now this concept isn’t new with streamers or Esports orgs actually well you have

Streamers like Hassan Lily Ludwig doing patreon for the podcast but for Esports Works they do something a little more how they perceive it as cool I’m not saying they’re not cool I’m just saying like it’s a little it’s a little extra but yeah they create their own little

Platform and name it something like Cloud9 Stratus Liquid Plus the send Society for Sentinels and it’s the same idea which is hey give us five bucks a month get some cool benefits like behind the scenes look without Pro players problem is not a lot of people are excited about watching pros play 20

Questions with each other as these exclusive behind the scenes look because surprise Esports orgs are just absolutely terrible at making good content and they thought like hey why don’t we humanize our Pro players in some way and they do a bad job but maybe the the idea is good right look if there

Are thousands of viewers willing to spend five bucks a month on millionaire streamers just for a little badge in their chat maybe there are some fans out there that are willing to throw in five bucks a month to keep a team going a team they like a team they support

Unlike other sports or traditional media streaming entertainment has always been free it never costs anything to watch anything all these hours of hours of streams and tournaments and events and that’s what makes streaming so unique and that people only pay if they genuinely just want to support something

And that’s something pure about that so I’m gonna experiment with a patreon and all the money goes directly to the players and staff during watch parties I’ll probably like put a little Patron chat up on screen in the corner so that people who do support the team financially can kind of like be

Showcased for the support like a weekly video where I give an update on how the teams are doing so this this week’s video is probably going to be really depressing because our valorant team close is just money I’ll get you the [ __ ] money dude don’t call John Rose Broden

Where’s Jody someone call somebody bro bro check him out bro these [ __ ] are shooting back all day long couldn’t handle it his poor little heart dude he’s just a team owner bro he wanted to do something different he wanted to do something no one else could did so bad

We went oh and 11. in our last 11 matches we did so bad that we got kicked out of um the Challenger league and we would have to re-qualify next year so it’s it’s gonna be a sad one obviously there are gonna be drastic changes made it’s

Gonna be a little spicy of course anyone giving you know the SG five bucks a month in some way you are an investor not a legal investor I want to make that clear you are not owed any stock in the company but um you will be given uh essentially the

The financials of the company if you are really curious about the the money breakdown that is something I’m gonna make available because if we are asking for you know fan support then it is really imperative that we are transparent with how that money is spent how that we have to be financially

Responsible and you guys will see in um the balance sheet that we are paying out players a pretty low amount um everyone that plays on DSG essentially take a pay cut everyone that works at DSG so we have essentially two full-time employees I’ve taken a pay cut from their previous

Job because it’s just something they believe in and I’m super grateful that they are taking a chance with us and I’m hoping that with the patreon we can maybe bump everyone’s salaries up a little bit so if you want to support the players you can do so over at

Patreon.com disguised and yeah that’s uh that’s my Esports update for y’all I’m really hoping in four months I’m not making another video titled how I spent two million dollars but uh who knows you want to watch our League of Legends games we are playing on the weekends Saturday Sunday and

Mondays so please check them out if you are into League of Legends I know most people in N A are not anymore but for the for those still left um you can come check us out there and uh yeah I will see you all next time um bye