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

[00:00] I spent a million dollars on my Esports

[00:02] team and made a total of zero dollars hi

[00:05] I'm disguised toast and today I'll be

[00:09] telling you all about how the Esports

[00:10] industry is one of the worst thing you

[00:12] can get into four months ago I announced

[00:15] I created an Esports team and that it

[00:17] would cost me five hundred thousand

[00:19] dollars to run it for a year Well since

[00:22] then I decided to also pick up a League

[00:25] of Legends team and everyone told me

[00:27] that that's the second worst idea I've

[00:30] ever had the worst one being starting an

[00:33] Esports team so if you don't know a

[00:35] while ago all 10 League of Legends team

[00:38] in North America voted to um remove the

[00:42] requirement to have a secondary team

[00:44] like a Challengers team it's called The

[00:46] Academy team where you basically Foster

[00:48] and grow talent to One Day become like

[00:51] Pro players thing is this whole

[00:54] secondary team thing didn't really work

[00:56] out because it was just a place for old

[00:59] player is to kind of retire so I wasn't

[01:01] really growing new Talent so when Riot

[01:04] offered the opportunity to all these org

[01:07] owners hey do you guys want to keep this

[01:09] program going they all voted no because

[01:12] what better way to save money than to

[01:14] fire your secondary team you save a lot

[01:17] of money doing that actually problem is

[01:20] this change was supposed to take place

[01:22] next year but it happened this year and

[01:26] nobody told the players so now um there

[01:29] are a whole bunch of kids without a job

[01:31] in Los Angeles because they had to be in

[01:33] LA to be in this program and with the

[01:36] Esports procession in full effect it's

[01:38] not looking good for uh the players the

[01:41] orgs the League this move was so

[01:44] controversial that all the pro players

[01:46] protested by

[01:48] just not playing the whole season has

[01:51] been delayed by two weeks so when I see

[01:53] something on fire

[01:55] when I see a stock that's like all the

[01:58] way on the most downwards trajectory

[02:01] possible I think to myself hey what a

[02:04] great opportunity one man's trash is

[02:07] another man's less trashier trash but

[02:11] still kind of trash I saw this and as

[02:14] someone who has been playing League of

[02:16] Legends for like a decade I want to pick

[02:18] up some of these players you know that

[02:20] are now jobless and kind of keep their

[02:23] dreams alive and maybe bring some

[02:25] excitement back to the League of Legends

[02:27] scene God knows they need the help so

[02:29] that's why um I started a league team

[02:32] very silent

[02:34] it's the IRS wondering why I lost all my

[02:38] money this year so then last week my

[02:40] accountant messages me and says toast we

[02:43] need a talk and I was like oh that's

[02:45] kind of scary why are you talking like

[02:46] that well

[02:48] he told me that I'm actually on track to

[02:50] spend a million dollars this year double

[02:54] of what I was expecting and he sent over

[02:57] the spreadsheet with all these red

[02:59] numbers and I noticed that in the

[03:00] revenue section it was all blocked out

[03:02] and asked him why'd you block it out he

[03:04] said well it's not blocked out there's

[03:06] just nothing there you're not making any

[03:07] money then well how do you actually make

[03:09] money in Esports well if you look at any

[03:11] Esports org in North America all of them

[03:14] are either broke or going broke and I do

[03:17] mean all of them like some orgs will try

[03:21] and like put on a front and say hey

[03:23] we're still good we look good

[03:26] everything's cool here trust me when I

[03:29] say everyone is losing a lot of money A

[03:33] lot of people are being fired no org is

[03:36] safe right now layoffs are happening

[03:38] almost every week because if you can't

[03:40] make money which no one is doing then

[03:42] you need to stop spending money a penny

[03:44] save is a penny earned so obviously my

[03:47] first thought is well why don't I just

[03:48] get some sponsors as I'm sure all of you

[03:51] are thinking like sponsors sponsors will

[03:53] give you money to run your team right

[03:55] because sponsors gave all these other

[03:57] teams money and to run their teams hey

[03:59] Mr sponsor would you like to give us

[04:01] money and we'll display your logo on our

[04:04] social media or on our Jersey and we'll

[04:06] promote your products well it turns out

[04:09] that after 10 years of Esports teams

[04:12] kind of

[04:13] um lying misleading is the nicer term by

[04:16] saying hey

[04:17] give us some money and we're gonna use

[04:19] this money we're gonna get this Korean

[04:21] player and we're gonna win the World

[04:23] Championship then you're gonna be really

[04:25] popular no one did that the winning part

[04:28] they definitely did the Korean import

[04:30] part so 10 years of this of orgs

[04:33] constantly saying hey sponsor us we'll

[04:35] put you in our YouTube video Promise

[04:37] YouTube video that these orgs are

[04:39] putting out they get like 5 000 views

[04:41] here's an example I don't know which

[04:43] example is gonna be displayed I'm gonna

[04:46] leave that up to my editor it's not me

[04:48] roasting these orgs it's my editor I

[04:50] swear but man there are a lot of orgs

[04:52] with

[04:53] uh YouTube content that aren't being

[04:56] watched and each of a lot of them have a

[04:58] sponsor High to them and you look at the

[04:59] views as like 5K and these orgs got paid

[05:04] like tens of thousands if not hundreds

[05:06] of thousands to do this video 10 years

[05:08] of this

[05:09] um has made it so surprised Brands don't

[05:13] want to be in Esports because they're

[05:15] tired of bleeding money and I kid you

[05:17] not I had an experience we approached

[05:19] this very high profile energy drink

[05:23] brand who is currently sponsoring

[05:26] another really high profile Esports org

[05:30] and we went to them and we're like hey

[05:31] you know we noticed you're kind of in

[05:33] the Esports space we will love it if you

[05:35] guys partner up with this here are our

[05:37] numbers our YouTube numbers do twice as

[05:40] good our Twitter engagement is 10 times

[05:42] better and we only want half the money

[05:44] so like can we work something out and

[05:47] they said

[05:48] sorry we're leaving Esports and the only

[05:51] reason why we're still sponsoring this

[05:53] particular org is because our contract

[05:55] length so it ends next year and we are

[05:59] out of here because they definitely did

[06:02] not deliver on what they promised and

[06:04] that's pretty much the story across the

[06:06] board brands are scared of Esports

[06:08] because they invested millions and

[06:09] millions into it and they never got any

[06:12] significant return and no team ever

[06:15] really stopped in last decade and really

[06:17] asked themselves hey how do we really

[06:19] create a sustainable model how are how

[06:22] can we be financially responsible to our

[06:24] investors and to our sponsors no it was

[06:27] pretty much like hey we need money to

[06:29] get players we need money to sign

[06:31] streamers we need money to do this we

[06:33] need money to throw a big party because

[06:36] it's all about how we are perceived it's

[06:39] not it's about it's about money how can

[06:43] you survive all the orgs are now

[06:45] realizing oh you can't so what I've been

[06:47] doing is I've been working a little

[06:49] harder on my own stuff I've been taking

[06:53] the most sponsors I've ever taken in my

[06:56] career because every sponsor is like

[06:59] being able to pay for one more players

[07:01] you know salary for the months right and

[07:04] keeps the history going and buys me more

[07:06] time well I figure out how to make it

[07:08] all work merch is another big thing that

[07:10] people always point out hey do merge get

[07:12] merged get some jerseys God damn you

[07:14] toast we want to spend money well I

[07:16] don't think merch is something like that

[07:17] will solve a lot of these big points is

[07:20] like not a long-term sustainable model

[07:22] for Esports it definitely helps a lot

[07:25] it's been proven to make a decent amount

[07:27] of money and that's why Orcs like under

[07:28] thieves and Team Liquid they're always

[07:30] constantly promoting their merch and

[07:32] they're constantly doing a lot of drops

[07:34] because it's like a proven way

[07:38] and one of the very very few ways to

[07:40] actually make money but it also takes

[07:43] like minimum six months to create good

[07:45] pieces good drops and while yes I could

[07:48] have taken the DSG logo and slapped it

[07:50] on a yellow t-shirt and sold it for 20

[07:52] bucks and people definitely would have

[07:53] bought it I've always been very fixated

[07:55] on providing higher value when it comes

[07:58] to like merch like even my plushie um I

[08:01] like my plushie I think it's very like

[08:03] well made that you know the Hat stays on

[08:05] you got a big old mustache sunglasses

[08:08] you know it's nice it's simple it's high

[08:10] quality I think I sell these for like 25

[08:13] bucks maybe it should be 30 bucks

[08:14] because of inflation these days but I

[08:17] make a dollar one dollar from each of

[08:19] these and these are constantly sold out

[08:21] I'm just happy that people are happy

[08:23] with this and it's the same approach I

[08:24] would take with the DSG merch which is

[08:27] why it's taking so long please be

[08:29] patient I will work on it still gonna

[08:31] take a while it's probably gonna take

[08:33] six months from now maybe I'll get it

[08:34] out by Christmas who knows but the most

[08:36] important thing is when it comes to like

[08:38] streamer relationship not that we have a

[08:41] relationship viewers I'm not a

[08:42] parasocial like that but you know our

[08:44] career is based on fans supporting us

[08:48] and if I'm like gonna sell you guys

[08:50] something It's gotta be worth it my

[08:52] biggest fear is someone buying something

[08:54] off mine or like giving money to me in

[08:57] any way but feeling like after oh this

[09:00] wasn't worth it that would make me feel

[09:02] terrible um I did think of this last

[09:05] um way to make money that's worth

[09:08] looking into which is only fans except

[09:11] without the boobs so

[09:13] patreon

[09:15] um essentially fans on patreon usually

[09:18] pay a few bucks a month you see some

[09:19] cool and special content now this

[09:20] concept isn't new with streamers or

[09:22] Esports orgs actually well you have

[09:24] streamers like Hassan Lily Ludwig doing

[09:26] patreon for the podcast but for Esports

[09:28] Works they do something a little more

[09:30] how they perceive it as cool I'm not

[09:33] saying they're not cool I'm just saying

[09:34] like it's a little it's a little extra

[09:35] but yeah they create their own little

[09:37] platform and name it something like

[09:39] Cloud9 Stratus Liquid Plus the send

[09:43] Society for Sentinels and it's the same

[09:45] idea which is hey give us five bucks a

[09:47] month get some cool benefits like behind

[09:49] the scenes look without Pro players

[09:51] problem is not a lot of people are

[09:53] excited about watching pros play 20

[09:55] Questions with each other as these

[09:58] exclusive behind the scenes look because

[10:00] surprise Esports orgs are just

[10:02] absolutely terrible at making good

[10:05] content and they thought like hey why

[10:07] don't we humanize our Pro players in

[10:10] some way and they do a bad job but maybe

[10:12] the the idea is good right look if there

[10:15] are thousands of viewers willing to

[10:17] spend five bucks a month on millionaire

[10:20] streamers just for a little badge in

[10:22] their chat maybe there are some fans out

[10:25] there that are willing to throw in five

[10:26] bucks a month to keep a team going a

[10:28] team they like a team they support

[10:30] unlike other sports or traditional media

[10:33] streaming entertainment has always been

[10:35] free it never costs anything to watch

[10:38] anything all these hours of hours of

[10:40] streams and tournaments and events and

[10:42] that's what makes streaming so unique

[10:44] and that people only pay if they

[10:46] genuinely just want to support something

[10:48] and that's something pure about that so

[10:51] I'm gonna experiment with a patreon and

[10:54] all the money goes directly to the

[10:57] players and staff during watch parties

[10:59] I'll probably like put a little Patron

[11:01] chat up on screen in the corner so that

[11:03] people who do support the team

[11:05] financially can kind of like be

[11:07] showcased for the support like a weekly

[11:09] video where I give an update on how the

[11:12] teams are doing so this this week's

[11:14] video is probably going to be really

[11:15] depressing because our valorant team

[11:19] close

[11:21] is just money I'll get you the [ __ ]

[11:23] money dude don't call John Rose Broden

[11:25] where's Jody someone call somebody bro

[11:27] bro

[11:29] check him out bro these [ __ ]

[11:31] are shooting back all day long couldn't

[11:33] handle it his poor little heart dude

[11:35] he's just a team owner bro he wanted to

[11:37] do something different he wanted to do

[11:39] something no one else could did so bad

[11:42] we went oh and 11. in our last 11

[11:45] matches we did so bad that we got kicked

[11:48] out of

[11:51] um the Challenger league and we would

[11:53] have to re-qualify next year so it's

[11:56] it's gonna be a sad one obviously there

[11:59] are gonna be drastic changes made it's

[12:02] gonna be a little spicy of course anyone

[12:04] giving you know the SG five bucks a

[12:06] month in some way you are an investor

[12:10] not a legal investor I want to make that

[12:12] clear you are not owed any stock in the

[12:16] company but

[12:18] um you will be given uh essentially the

[12:21] the financials of the company if you are

[12:23] really curious about the the money

[12:25] breakdown that is something I'm gonna

[12:27] make available because if we are asking

[12:31] for you know fan support then it is

[12:34] really imperative that we are

[12:36] transparent with how that money is spent

[12:39] how that we have to be financially

[12:41] responsible and you guys will see in um

[12:44] the balance sheet that we are paying out

[12:47] players a pretty low amount

[12:51] um everyone that plays on DSG

[12:54] essentially take a pay cut everyone that

[12:56] works at DSG so we have essentially two

[13:01] full-time employees

[13:02] I've taken a pay cut from their previous

[13:04] job because it's just something they

[13:07] believe in and I'm super grateful that

[13:10] they are taking a chance with us and I'm

[13:13] hoping that with the patreon we can

[13:15] maybe bump everyone's salaries up a

[13:19] little bit so if you want to support the

[13:21] players you can do so over at

[13:23] patreon.com disguised and yeah that's uh

[13:27] that's my Esports update for y'all I'm

[13:30] really hoping in four months I'm not

[13:32] making another video titled how I spent

[13:34] two million dollars

[13:36] but uh who knows you want to watch our

[13:38] League of Legends games we are playing

[13:40] on the weekends Saturday Sunday and

[13:42] Mondays so please check them out if you

[13:45] are into League of Legends I know most

[13:47] people in N A are not anymore but for

[13:51] the for those still left

[13:53] um you can come check us out there

[13:55] and uh yeah I will see you all next time

[14:00] um

[14:01] bye