Question 1

How do esports teams split prize pool winnings?

Accepted Answer

Prize pools are typically split in a hierarchical manner. First, the organization takes a pre-negotiated percentage (the 'Org Cut'). Then, a portion may be allocated to coaches and support staff. Finally, the remaining amount is distributed among the players, usually equally, though some contracts may have performance-based clauses.

Question 2

What percentage do orgs commonly take from prize money?

Accepted Answer

The organization's cut can vary widely but generally falls between 10% and 35%. A lower percentage is more player-friendly, while a higher cut is often justified by a larger salary, better facilities, and more comprehensive support from the organization.

Question 3

Do coaches and staff always get a share of prize pools?

Accepted Answer

It is a very common practice in professional esports. A coach's contract will often stipulate a small percentage of tournament winnings (e.g., 2-10%) as a performance incentive. This aligns the goals of the support staff with the players.

Question 4

How are MVP/performance bonuses usually awarded?

Accepted Answer

Performance bonuses can be structured in several ways. Some contracts allocate a percentage of the prize pool to a bonus fund, which is then awarded to the team's MVP or distributed based on statistical performance. In other cases, bonuses are flat fees paid by the organization for achieving specific placements (e.g., Top 3 at a Major).

Question 5

Are tournament winnings taxed and who pays the tax?

Accepted Answer

Yes, tournament winnings are considered taxable income. The responsibility for paying taxes typically falls on the individual player or the organization, depending on the player's employment status and the laws of the country where the tournament is held and where the player/org resides. This calculator's 'Tax/Fee' slider can model deductions made by the tournament organizer before payout.

Question 6

How are sponsorship bonuses usually distributed after events?

Accepted Answer

Sponsorship bonuses are typically outlined in the player's or team's contract. If a sponsor offers a bonus for winning an event, it may be paid directly to the organization and then distributed according to the same prize split formula, or it might be paid directly to the players. This varies case by case.

Question 7

What is an example split for a $1,000,000 Worlds prize pool?

Accepted Answer

For a $1M prize for first place: An org might take a 20% cut ($200k). A 5% coach/staff cut would be $50k. This leaves $750k for the 5 players, resulting in $150,000 per player before their personal taxes.

Question 8

How to model weighted player payouts (star players vs bench)?

Accepted Answer

While this calculator uses an equal split, in a real scenario, you would adjust the final 'Payout Pool for Players'. For a weighted split, you would assign different percentages to each player (e.g., Star Player: 25%, Core Players: 20% each, Sub: 15%) and apply those percentages to the final pool.

Question 9

How long do esports orgs typically hold payouts?

Accepted Answer

This varies. Tournament organizers can take several months to pay out prize money to the organizations. Once the org receives the money, it is typically processed and paid to the players within one to two additional payment cycles (30-60 days), though this can be longer.

Question 10

How to include travel/bootcamp costs into net payout?

Accepted Answer

Travel and bootcamp costs are operational expenses for the organization and are not typically deducted from prize money. They are covered by the organization's revenue from sponsorships, league stipends, and their cut of prize winnings.

Question 11

How do third-party tournaments differ from organizer-run events?

Accepted Answer

Organizer-run events (like Worlds or The International) have prize pools funded by the developer and are the most prestigious. Third-party tournaments (like ESL or BLAST) are run by external companies and are also a core part of the ecosystem. The prize split mechanics are generally the same for both.

Question 12

How to create a legally safe player contract clause for prize splits?

Accepted Answer

A contract clause should be extremely specific. It must clearly state the exact percentages for the organization, players, and any other parties. It should define what constitutes 'winnings' (e.g., does it include sponsorship bonuses?) and outline the timeline for payment after the money is received by the organization. Always consult an esports lawyer.

Esports Prize Pool Split Calculator

In-Depth Guide to Esports Prize Pool Splits