"Own the league."
That's a phrase that's been repeated to me over the past few years from various esports team owners, from Counter-Strike: Global Offensive to League of Legends and other franchised games. Despite the esports industry's continued growth and top teams rising to near half-billion dollar valuations, the path to profitability as an esports team hasn't become much clearer. Few major esports orgs are profitable, with salaries, facilities and staffing costing millions to tens of millions of dollars a year and sponsorship revenues often not cutting it.
So, what can solve that problem? Owning the league.
On Friday, Flashpoint, a new CS:GO league with seven founding member teams with ownership stakes, kicks off. On Monday, the ESL Pro League, restructured to now include a 65% profit share for 13 partner teams, will begin its 11th season.
The leagues are innately different, and for the past few months have been publicly at odds, with ESL Pro League housing Counter-Strike's most competitive teams but Flashpoint featuring the game's most popular on-air talent. At their core, though, ESL and Flashpoint share a similar goal: letting teams "own the league," or at least be a major participant both monetarily and administratively.
Although the leagues are direct competitors, there might just be space in CS:GO for two franchised entities: The game's audience numbers for major events rival League of Legends and dwarf Overwatch and Call of Duty. A little over a week ago, after all, IEM Katowice drew more than 1 million concurrent viewers, showing CS:GO remains the second-biggest esport in the world despite little support of the competitive scene from game developer Valve.
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Fifteen teams participating in ESL Pro League and Flashpoint own a franchise team in League of Legends, Overwatch or Call of Duty: eight of 13 partner teams in ESL Pro League and all seven founding members of Flashpoint. But unlike in those games, where game developers Riot Games and Activision-Blizzard rule the leagues, the Flashpoint teams will have total say over the league's execution of events and scheduling, and in ESL Pro League, teams are expected to have more administrative input than they do in other games.
Counter-Strike has staying power -- the game and competitive play in it have been around in some form for 20 years -- but this is a new frontier for the esport. It's not the first time esports teams have attempted to run their own league, however.
Do not forget the Professional Esports Association (PEA) and the World Esports Association (WESA). WESA still exists. It will be the agency tasked with selling sponsorships and media rights for ESL Pro League. But the PEA is more or less gone, replaced by B Site, the entity that now owns Flashpoint. The tension between several of the North American-owned teams that were part the PEA and are now in Flashpoint, including Cloud9, is a mirror image of what existed back then between those teams and ESL. It still exists now.
Counter-Strike team owners will tell you this time is different. To a certain extent, they're right. The structure of the ESL Pro League has bent more now to be more inclusive to teams, granting the 65% profit share, after several years of ESL falling from grace and other events such as IEM Katowice and Cologne no longer being the most important Counter-Strike tournaments on the calendar. By partnering with teams, establishing the Pro Tour and moving away from Facebook Gaming and back to Twitch, ESL Pro League now sits in a position of power, only amplified by the endorsements of some of esports' biggest organizations. That's why two former PEA teams -- Team Liquid and Complexity -- are participating in the Pro League.
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Flashpoint, by comparison, has a long road ahead of it. Its content creator push, securing services of some of Counter-Strike's best and most vocal personalities, while also bringing in new faces to the game from other popular titles like Christopher "MonteCristo" Mykles, position it to produce fantastic content and receive great media coverage. But at the end of the day, the league will not feature only three of HLTV's top 20 teams: MAD Lions (No. 12), Gen.G (15) and BIG (20). Competition in Flashpoint will likely be subpar compared to ESL.
In an interview with ESPN in January, Cloud9 president Dan Fiden said his organization -- the most valuable in esports -- lost money heavily in Counter-Strike every single year it's operated a team in the game. At the cost of a $2 million buy-in for Flashpoint, Fiden and the executives of member teams for that league seek to correct those losses. Whether they can or not will come down to if their viewership and shoulder content from the league can warrant sponsors and media rights to recoup the $14 million dollars invested by the seven teams.
ESL, by comparison, will start off hot with the other 17 teams of the HLTV top 20. Their model is inherently different, and while ESL will exert more control and take a larger portion of revenues than what teams in FLASHPOINT will be awarded, they'll also have more room to haggle with potential sponsors. If ESL's revenues are higher and teams are making more money, is the lack of full control really that much of a deterrent?
Of all the entities to run Counter-Strike events, ESL has shown its ability to stick it out longer than others. It hasn't always been pretty: WESA was a hot mess, and ESL's arrogance at the negotiating table with esports teams several years ago wasn't great either. ESL was ultimately surpassed by Turner Sports's ELEAGUE, FACEIT's Esports Championship Series and the BLAST Pro Series as the favorites of the teams at the time. ELEAGUE, in particular, changed the economic standards of Counter-Strike in a way that made teams more willing to participate.
But ELEAGUE, while still around as an entity, hasn't operated a Counter-Strike tournament in more than a year. It doesn't seem likely Turner Sports will again. BLAST has remained a strong component of the Counter-Strike ecosystem, while the Esports Championship Series has folded as FACEIT works for B Site to run Flashpoint.
ESL holds the cards here. Most public signs point to that league winning the early battles in the war between it and Flashpoint. But things can change, and in an ecosystem as volatile as Counter-Strike, there's a non-zero chance they will stay on top. Whether teams will be satisfied with how ESL runs things is to be determined.
Fiden and other Flashpoint team executives, meanwhile, will hope that the top teams in ESL will see more value in their counterpart and an opportunity to truly "own the league" eventually. As these leagues begin their seasons, anything can happen, and it's likely fans will be watching a bit of both to see what sticks.