---
title: 'How i lost $1,000,000 starting an Esports team...'
source: 'https://youtube.com/watch?v=UbOsE1FT8nk'
video_id: 'UbOsE1FT8nk'
date: 2026-06-18
duration_sec: 0
---

# How i lost $1,000,000 starting an Esports team...

> Source: [How i lost $1,000,000 starting an Esports team...](https://youtube.com/watch?v=UbOsE1FT8nk)

## Summary

Disguised Toast shares his personal experience of losing a million dollars on his esports team, DSG, and explains why the esports industry is financially unsustainable. He details the collapse of the Academy system, the exodus of sponsors, and his experiments with alternative revenue models like Patreon.

### Key Points

- **Million-Dollar Loss** [0:00] — Toast spent $1,000,000 on his esports team and made zero dollars in revenue.
- **Academy Team Removal** [0:35] — All 10 League of Legends teams in NA voted to remove the requirement for Academy teams, but the change happened early, leaving players jobless.
- **Player Protest** [1:46] — Pro players protested by not playing, delaying the season by two weeks.
- **The Million-Dollar Reality** [2:40] — Toast's accountant informed him he was on track to spend a million dollars, with zero revenue.
- **Industry-Wide Financial Crisis** [3:11] — All esports orgs in NA are either broke or going broke, with layoffs happening weekly.
- **Sponsor Exodus** [5:08] — Brands are leaving esports due to years of broken promises and poor returns on investment.
- **Merch as a Revenue Stream** [7:10] — Merchandise is a proven revenue source but takes at least six months to create and is not a long-term solution.
- **Patreon Experiment** [10:51] — Toast is launching a Patreon where all money goes directly to players and staff, with financial transparency.
- **Team Performance Woes** [11:42] — DSG's Valorant team went 0-11 and got kicked out of the Challenger league.

## Transcript

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