SIGN UP LOG IN
 

ESL against FACEIT: fight for exclusivity

Published by

January 28, 2020 7:32 pm

ESL against FACEIT: fight for exclusivity

The year 2020 has not yet really picked up speed, and yet a big battle is already looming on the horizon. Tournament organizers and organizations want to redefine Counter-Strike.

Counter-Strike is not profitable. Neither for organizations that own a CS:GO team, nor for tournament organizers like ESL, FACEIT or RFRSH. This thesis is not new, and yet it is hotly discussed these days. The reason for this is the current arms race, as well as the wooing for exclusivity.

Losses in the millions

In an interview with Jarek ‘DeKay’ Lewis, Dan Fiden, President of Cloud9 Esports Incorporated, gave interesting insights into the financial dilemma that many organisations with their own CS:GO teams are facing:

“Let me get this straight: Cloud9 loses about one to two million US dollars every year with the CS:GO business. And I would challenge any top 20 teams in CS to prove to me that they’re not losing a similar amount.”

As a former board member of Cloud9 and former Chief Strategy Officer of the Chinese game developer FunPlus, Fiden played a decisive role in making Cloud9 one of the financially strongest Esport organisations worldwide. Finally, he initiated an investment deal between C9 and FunPlus worth one billion US dollars. Nevertheless, according to his statements, a CS:GO team is not worthwhile financially at all.

In 2019, Cloud9 was said to have raised just 70,000 US dollars for participation in the ESL Pro League. That is about as much as the Los Angeles-based organization spends on its CS:GO, team, each month. Most of the money comes from investors and sponsors, but in the coming years, they could get even further away from Counter-Strike than they already do.

In the area of sponsorship, we have had and continue to have requests from our partners that we leave CS out because the content is provocative. This probably says it all about the fact that the economic aspects are not good for CS teams.

But not only the organisations complain about the negative business of Counter-Strike. ESL is also struggling with a loss of sales – and has been doing so for years. According to a Games Wirtschaft report from September 2019, the Cologne-based company has been in the red since 2009 – with the exception of 2013, when ESL posted a sales deficit of 7.5 million euros in 2016 and 17.7 million euros the following year. These losses could only be offset by the Swedish parent company MTG (Modern Times Group).

Because of these losses on all sides, it is quite astonishing that CS:GO has been able to establish itself as one of the most popular Esport titles in recent years, and that the investments have also been steadily increasing. But in the long run, this will no longer be possible, and many are aware of that.

Between solutions and profit

Whether the game concept with its terrorist image per se must change is another matter. In order for CS:GO to become more profitable in the future, it needs new financial possibilities. And these should now increasingly come with revenue sharing, which the tournament organizers (must) offer in various versions.

CS:GO 2020: The year of the super leagues

An indication that the organizations also see great potential in this are the numerous new CS:GO teams that have been established in recent months: the Evil Geniuses, the 100 Thieves, the MAD Lions, OG, Gen.G, Dignitas, c0ntact. These are names that are already well known from other Esport titles and who now want to conquer or at least help shape the Counter-Strike market. After all, they all have the financial means to be able to pay the two million US dollars for entering the “B Site” league, for example.

Dan Fiden, who is working with Cloud9 on the development of “B Site”, by the way, did not consider cooperation with ESL, because the Cologne-based company insists on its own leagues and tournaments, its own ranking system and its own ESEA platform. At the same time, teams are to cede the exclusive rights to all this to ESL for at least four years. This is not acceptable for Fiden, so he prefers to invest his millions in his project. A fight against the monopoly development of the ESL.

“The terms of the contract with the ESL would not allow Cloud9 to stay in the black until the ESL itself makes a profit of around 20 million US dollars a year. This corresponds to a profit margin of more than 50%. In my opinion, a partnership where one partner makes more than 50% profit each year, and we don’t even break even, is not a partnership.

Even CS:GO developer Valve does not want to allow this monopoly position. The recently often quoted statement called “Keeping Things Competitive” makes this clear: Valve does not want (exclusive) licenses to be granted for events that would restrict the teams from participating in other events. It sounds almost as if everything should remain the same.

The Valve Corporation, based in Washington State, USA, is a publisher of CS:GO and earns money at every event. So it was the only winner in the past years. But unlike Blizzard or Riot Games, which market their games mostly themselves, Valve gives tournament organizers a free hand. And according to statista.com, the sales figures of recent years seem to be correct even without exclusivity: In 2018, CS:GO flushed over 400 million US dollars into the Valve cash box.

FACEIT wants to skilfully circumvent the problem of exclusivity with the help of the franchising system. They want to make the CS:GO business more lucrative again, promises revenue sharing for players and teams in the millions. And one sets on the show factor with well-known faces in the talent lineup.

Obviously, a serious competitor for the ESL and their monopoly plans. Although it owns the most prestigious individual events, ESL One Cologne and IEM Katowice, the mystery surrounding the ominous LANXESS agreement and the new ESL Pro League Season is far from over. Not to mention the contractual conditions that go with it.

In the end, everyone tries to push through their own interests. After all, ESL, FACEIT, and the organizations themselves are profit-oriented companies and want to make profits. Profits that the tournament organisers are even prepared to share with their (exclusive) partners.

ESL Pro League should distribute at least 16 million US dollars

Where are you headed?

Which of the various league concepts will prevail in 2020 is eagerly awaited. If you take a look at the history of traditional US sport, which is often used as a model for other sports, it has had to struggle with similar challenges. Before the big leagues could claim their supremacy, they had competitors: the NBA and the ABA, the NFL and the AFL, the NHL and the WHA. The supposedly best teams could, therefore, never be seen playing against each other, as they were in different exclusive leagues.

This is a prognosis that one certainly cannot wish for the CS:GO sport. But after 20 years of Counter-Strike and the rapid mainstream development of the past years, we can’t avoid changes anymore. And so the year 2020 is likely to be both a highly competitive and a trend-setting one.

And the viewers of the whole spectacle are also in demand: Do we want to continue to insist on free content and at the same time expect ever-better quality? Or will we, at some point, be prepared to consider pay-TV, pay-per-view, or even league passes for CS:GO?

More News

Dota 2 has got such a big update that professionals call it Dota 3

Dota 2 has got such a big update that professionals call it Dota 3

The MOBA Dota 2 got the big Outlanders update on November 26th. It brought many innovations and changed already known…

Global Poker Index: Kahle Burns Leads POY Race

Global Poker Index: Kahle Burns Leads POY Race

Every week, the Global Poker Index publishes a list of the world's top tournament poker players. The related formula includes…

FIFA vs. PES - the battle for licenses

FIFA vs. PES - the battle for licenses

FC Bayern Munich worked together with FIFA developer EA for three years - now it's suddenly over. The record champion…

LoL imposes $1000 fine on G2 Esports for playing a Pro WoW Classic

LoL imposes $1000 fine on G2 Esports for playing a Pro WoW Classic

The developers of the League of Legends, Riot Games, have pronounced a penalty against the organization G2 Esports. Because their…

Participants for Dota World Championship The International 2019 complete

Participants for Dota World Championship The International 2019 complete

For most Dota 2 teams the season is now over. Only 18 teams take part in the TI9 World Championship…

At the

At the "LoL" World Championships e-athletes fight for millions

The World Championship in "League of Legends" has begun. 2019 could be the year of the Europeans. The World Cup…

The largest upcoming online poker tournaments

The largest upcoming online poker tournaments

Young or old, poker tournaments are waiting for you to join the ranks of thousands of players trying to win…

Juves 8-year plan behind the Ronaldo transfer

Juves 8-year plan behind the Ronaldo transfer

Last summer, Italy's serial champion Juventus Turin caused a sensation on the transfer market. Cristiano Ronaldo (34) switched to Serie…

eSport needs more space and is therefore supported

eSport needs more space and is therefore supported

The number of members of eSports clubs will grow significantly in the near future. The space requirements of individual clubs…

Here's how the Liga standings look at the end of the season

Here's how the Liga standings look at the end of the season

A Liga dae Espana finished with Real Madrid as the best team of the year. After beating an underdog, Barcelona…

PUBG Mobile Club Open 2019: Tencent unveils final teams before release

PUBG Mobile Club Open 2019: Tencent unveils final teams before release

We now know the complete list of teams that will participate in the final round of the PUBG Mobile Club…

Cristiano Ronaldo wins the Nations League with Portugal

Cristiano Ronaldo wins the Nations League with Portugal

Portugal has won its second title in three years with the Nations League after the EM 2016. In the final…

ESL CS:GO Final at gamescom: aTTaX becomes summer champion
ESL CS:GO Final at gamescom: aTTaX becomes summer champion

As part of gamescom 2019, the grand finale of the ESL Summer Championship was held in Counter-Strike Global Offensive on…

Vancouver and San Francisco in the final of the Overwatch League
Vancouver and San Francisco in the final of the Overwatch League

Vancouver Titans and San Francisco Shock have reached the final of the Overwatch League 2019. Both teams went into the…

The exciting final of the A1 eSports League
The exciting final of the A1 eSports League

Tickling Tentacles Willhaben get the win On Saturday the 15.6. 2019 it was time again for the A1 eSports, which…

Online casino or Real casino: where do stars feel particularly at home?
Online casino or Real casino: where do stars feel particularly at home?

In the past, there was only a casino for everyone who wanted to play slots for winnings. Today, in times…

Washington Forces Decisive Seventh Game
Washington Forces Decisive Seventh Game

The Washington Nationals have forced a decisive seventh game in the final series of the North American Baseball League MLB.…

F1: Hamilton takes the Hungarian GP and catches up with Schumacher on the record for wins in the same event.
F1: Hamilton takes the Hungarian GP and catches up with Schumacher on the record for wins in the same event.

The Lewis Hamilton (Mercedes), six times world champion and he has become the new leader of the Formula One World…

Sport News: Barca's child prodigy astonished
Sport News: Barca's child prodigy astonished

Ansu Fati's goal against Inter Milan makes him the youngest goalscorer of all time in the Champions League. Can he…

E-Sports: CS:GO: #G2GoesGlobal
E-Sports: CS:GO: #G2GoesGlobal

The organisation G2 Esports announces the repositioning of its CS:GO team for the start of DreamHack Malmö 2019. Since 2016, G2…

$22 million embezzled! - WPT Champion Dennis Blieden confesses guilty
$22 million embezzled! - WPT Champion Dennis Blieden confesses guilty

In February 2018 Dennis Blieden could celebrate big. At the L.A. Poker Classics, the hitherto undescribed hand left 492 competitors…

Germany: Payout ratio in online casinos
Germany: Payout ratio in online casinos

Especially as a new casino visitor, you want to gain experience in online casinos and will you often wonder what…

Mybetting Deals Tools

Surebet by BetBurger

Surebet by BetBurger

BetBurger is a service focusing on arbitrage bets, also known as sure bets. It turns sports betting into an investment.

Matched Betting by OddsMonkey

OddsMonkey

OddsMonkey offers matched betting services with features to enhance your profits with the best betting offers.

Live Sport Results and Statistics

Live Scores

Always keep ahead of the sports betting game with our real time results and statistics!

2000+ Free Slots

Play the best online slots and your favourites from the biggest developers for free right here!