Articles

03rd September 2008, 22:00

Meet Your Marketmechanisms

In a recent article on SK Gaming, Michael 'Carmac' Blicharz took a swing against TUT (The Unnamed Team) for being the main reason why WC3-salaries have come out of proportion. This is not an attack on that article, but a mere explanation of the facts and history that Carmac chose not to include in his piece.

The main argument behind the article, is that the excessive amount of money TUT is putting into their WC3-squad is twisting the salary expectations for all the WC3 players. It does hold some truth, as money given to Player A will give Player B a better understanding of what he is worth; as in if Player B is better than Player A he will want to recieve more money than him.

That is pretty logical. But the rest of the equation just falls apart when the author wants to blame TUT. Because there has to be an organization to pay Player B the amount he wants. If there isn't, then Player B will have to lower his expectations to his salary to get a contract. Now, where in that part does TUT hold any responsibility?

 

 ToD. One of the players that has succesfully navigated around between organizations, getting his salary-demands accepted.

One could probably argue that TUT's competitors will have to keep up with their wages, to keep up with their pace, which is not true.

Unless TUT would employ the entire top of the WarCraft-scene, there will still be plenty of good - and great - players left over for the competitors to capture.

And in a WC3-landscape where the last 3 top-tier events has had 3 different winners (KODE5, ESWC Masters and ESWC GF), other teams would still get champions.

One of TUT's competitors could be called Sauer Krauts. They employed a business-strategy much like TUT's; trying to get as many trophies as possible in as little time as possible, knowing that champions create fans and fans create good business.

They actually even did that, before TUT hit the WC3-market in the Summer 2004. At that point Sauer Krauts was already one of the biggest teams, with one of the best rosters. They had been using money to get that roster; and used money to keep it intact - expanding the budget year by year.

In the mean time, another competitor to TUT - let's call them The Kings - had the absolute top roster of the entire WC3-community. With the exception of one player - who was captured by a Chinese organization in 2005 (who eventually overbid The Kings in terms of salary and bonuses) - The Kings managed to keep that roster together until late 2007. They had a 6-digit euro-sponsorship with one of the biggest players in the industry, and managed to use up all of their money before letting the team go.

While all this was happening, TUT had managed to put together a top-tier WC3-team and create a business-strategy that attracted sponsors and investors alike. The old saying of "if you want to make money, you have to spend money" seems to be true for TUT, as the organization is still investing lots of money into areas where others have to draw out.

And while the original article would like you all to think it's because of inflated wages, it is in fact because most other teams have failed to capitalize on what they have. What is the reasoning behind going into a wage-race if you don't have a strategy on how to earn money on it?

 
World Elite pulled out as ReMinD and Lyn wanted a salary increase. A German organization decied to bring them on board; but what did they get out of it? 

Take the Sauer Krauts for example. One year ago, they put a huge investment in to a new WC3-roster; one that could bring them to the top again.

But for what? Nobody thought that the team-events of WC3 would just go bezerk, bringing millions of dollars into the game - so why get a whole team? Well, the fact is that nobody knows but themselves.

Maybe out of necessity to keep up with TUT, maybe with the hope of making a mark on something - or closing a special deal. Instead, they will now have to ask themselves if it was worth it, as the team will probably be shut down before long.

Bonus question: Who killed WC3L? Was it investments from the teams participating or was it the founders of the tournament who can pay out 25,000€ two times a year for a national league of solo-players, while they only give 20,000€ to the very best teams and players in WC3? Who was it that actually downplayed the seriousness of the league?

 

 
Comments (63)

 

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(2 months ago)  #1 Mantraa
 
Very well written, nice explanation on top of that, seems to me that it was totally just a biased article @ Sauer Krauts. Tbh, it's senseless to blame wage boosting when if the other players deserved it and could perform at such a high peak, they would already have the salary that equals what their tiered players are receiving as long as an organization existed that could boast such a payout
(2 months ago)  #2 GenoZStriker
GenoZStriker
Phil owns. Nice article.
Enjoy playing dota? Check out Demigod at "Demigodthegame.com
(2 months ago)  #3 Flex-
Flex-
not naming teams, espcially 4k was kinda pointles, you gave out enaugh unique facts about the team so that almost any chobo in the gaming sceene could have guesses who you were talking about.
Shouldhave just asked permision and wirtten it properly ( and if you did ask and didm't get it, im sorry for bringing it out )
Last edited by Flex- at 03.09.2008, 23:19

Sup?
(2 months ago)  #8 Phil
Phil
I can understand your point of view, but I have done this for a very specific reason.

The article is supposed to be an ironic response to Carmac's article; something that people who have read that one should recognize pretty fast.

If you have more questions, feel free to ask them.

I'm forever blowing bubbles!
(2 months ago)  #9 Flex-
Flex-
well now im just curios, can you give the link to the article that you replyed at?
Sup?
(2 months ago)  #11 Phil
Phil
(2 months ago)  #4 4KFNyPG
 
Very nice article, well written. I believe you have a type for the caption of the 2nd picture. "but what did they get out OF it?" should be correct.
Last edited by NyPG at 03.09.2008, 23:17
(2 months ago)  #7 myMYM|Phil
Phil
Damn! You are spot on, gonna fix it :)
I'm forever blowing bubbles!
(2 months ago)  #5 4KFNyPG
 
oops it somehow double-posted :s sorry
Last edited by NyPG at 03.09.2008, 23:18
(2 months ago)  #6 NieSwiety
NieSwiety
Well written Phil.
www.NieSwiety.dakabum.pl
(2 months ago)  #10 luvstyle
 
________"That is pretty logical. But the rest of the equation just falls apart when the author wants to blame TUT. Because there has to be an organization to pay Player B the amount he wants. If there isn't, then Player B will have to lower his expectations to his salary to get a contract. Now, where in that part does TUT hold any responsibility?"

the teams like the old WE suffered from this inflation created by MYM. the players left cause their expactations couldnt be handled by World Elite.


second part i dont like in this article, is that you wanna make it sound like myms players (moon, lucifer, soccer, grubby, susiria, eve) cover their salarys totally, and mym isnt running by investment money or what?
(2 months ago)  #12 Phil
Phil
1. WE suffered from the inflation created, because there was another team willing to pay them a higher salary. That was not MYM, but SK.

2. MYM cannot create the inflation alone. No matter how many times you say it, it's total bullshit. That is unless you want to re-write all economical theories about the free market.

3. I am not in any way making it sound like all of MYM's players are covering their own costs; I simply state that the business-model projected by the organization is getting sponsors and investors to put money in the business - something other organizations seems to have problems with.

I'm forever blowing bubbles!
(2 months ago)  #14 Johnlolxxx448
lolxxx448
In whichever way you turn it, the fact that MYM is willing to pay twice the standard to star players like Moon or Grubby is resulting in higher demands or wishes for salary among the other players.

I don't belive this equals an inflation in player salary but it helps to destabilize the market. When Remind and Lyn knows that MYM is paying Moon twice their salary and knowing they are approximately on the same level it must encourage them to look for a new team providing better money. And this continuing search for higher salary among star players may have loured managers to hire players at a wage the team income couldnt support thus resulting in teams closing.

What i really mean is that, SK should not be attacking the wages of MYM players. Have they ever stopped to consider if MYM is actually making money from their business? MYM has made Moon a superstar with a huge fanbase and made an income of it. This could not have been done without the star players and although the majority of the income is not tournament prices maybe the players are worth the cost?

When Real Madrid wants to buy Christiano Ronaldo for an insane amount of money they are not planning on returning that investment from tournament awards, but from bringing fame, selling merchandise and from visitors. Like that MYM is profitting from the stars through site visitors, merchandise and the fame and prestige.

One question remains, however. Will MYM gain from killing all competition in WC3L? WC3L must still be acredited a lot of importance in respect to the continuous spotlight on starplayers around the world and could MYM continue without that extra profit?
(2 months ago)  #15 Phil
Phil
I would never claim that paying higher wages wouldn't raise the overall demands for more money. Actually I make it quite clear in one of the first paragraphs, that this point is true in Carmac's article.

If organizations gear their business; and thereby wages, to what they can do - instead of trying to emulate something they have no financial backing to do - there would be no inflation though. MYM can't buy out every major player, draining the market for talent, so there will still be plenty of players left for less money than right now (there is a but to it though; the fierce competition between organizations about the same sponsormoney makes it a very clear-cut race - get the best players or get lost. That situation might have a bigger hand in the inflation than MYM has).

This is where football-analogies come in handy. Real Madrid bought David Beckham for apprx. 20 mio. £, or 200 mio. Danish Kroner (I'm not too sure of the exact amount right now), and in his time in the club it is estimated they got a return of investment that was worth 200 mio. £ in shirtsales, merchandise, sponsors and what-not. Like you mention Ronaldo, that is what you can get out of your best players.

Have MYM killed all the competition in WC3L? They had a lacklustre online-season in the spring - going through a playoff-match before securing a spot. In the finals they even lost to Mouz before winning twice against them in the Grand Final. Is that killing the league? No.

To me it is clear that WC3L has grown ESL over their heads. They have the best WC3-players in the world attending their online and offline-matches, but aren't able to sell it for more than 20,000€ a season.

What is killing WC3L is... WC3L. No developement in prizemoney or event-size on a eSports-scene that is going into hyperdrive is just.. well, unambitious to say the least.


And to answer your question - I don't think MYM would gain anything from killing WC3L. Atleast not in the short run (honestly, not even Carmac gives a fuck anyway, as we are probably going to see SC2CL in half a year or so).

I'm forever blowing bubbles!
(2 months ago)  #18 luvstyle
 
phil, your opinion to this whole story can be summarized:

"we have the big investor, so we can afford to spend this sums of money on wc3. if other teams dont have that much money, they shouldnt get those players. its their own fault."

i agree about the esl/wc3l part though.
(2 months ago)  #20 Phil
Phil
My opinion can be summarized to; if organizations didn't pay salaries their business-models couldn't afford, there wouldn't be a wage-race or -inflation.

As long as organizations pay their players a salary so they can still make enough money to run their business, it isn't a problem. Then the organizations will just have to adjust (cut expenses, increase expenses, draw out of markets and enter new ones), instead of just posting money in what seems to be a prestige-project for some teams.


I do believe that teams which has a working business-plan; e.g getting in sponsor and investment-money is of course entitled to use them according to their long-term strategy. After all, it is a free market and everybody have the same possibilities.

(If it was a closed market however, like NHL or NFL, one could argue that there should be a salary-cap. But as long as this is free for all, I really don't see the problem. Limiting teams that have funds woul be, communistic to put it short).
Last edited by Phil at 04.09.2008, 14:26

I'm forever blowing bubbles!
(2 months ago)  #28 luvstyle
 
the price for gas and petrol is high. in your oppinion we should stop using cars to low the costs.
in formula1 as an example: mclaren can afford it, jordan cant. so jordan should either buy medium gasoline or stop for all.


thats a pretty naive way of thinking if you ask me.
(2 months ago)  #52 Phil
Phil
Pretty bad example. If petrol gets too expensive for people to use - they will actually stop using it. And for Jordan they would pull out of the sport or go broke trying to get better contracs with sponsors.
I'm forever blowing bubbles!
(2 months ago)  #37 Dknight
Dknight
Perhaps WC3L is not an integral part of Turtle Entertainment's marketing plans and development? Maybe they invest 25,000 Euros twice a year for German leagues because German sponsors and advertisers are interested in the German market and not international? Perhaps they're doing exactly what MYM is doing.
(2 months ago)  #38 Phil
Phil
I never said anything against that. And I would never do that. But in Carmac's article he blames TUT for killing the WC3L. But the fact is that ESL doesn't focus on it - which is killing it.

The only reason I question what they do, is to make an example to the readers. I would have done exactly the same in their shoes.

I'm forever blowing bubbles!
(2 months ago)  #40 Affentod
Affentod
So you are saying that higher WC3L prize money would make salaries stay stable or even drop?

I just can't see the relation between prize money and salaries that you are assuming here. If WC3L is being killed - thus losing in importance - then why are salaries for the best players in that league actually rising?

WC3L just had its by far most successful final event both in terms of on-site and online spectators. The clans in the finals now get a lot more exposure than before which is as you yourself have written the largest part of a player's market price.

Turtle Entertainment not putting any focus on WC3L is total bogus. Our League Operations department responsible for all ESL pro leagues is run by the WC3L founder Baschi with around half of his co-workers being long-time WC3L admins.

WC3L is the only completely autonomous international league within ESL. There's no link to any other level of ESL's structure. That makes it totally unique but also hard to understand for outsiders. I am positive that with the recent increase in spectator numbers we will see WC3L thrive and bloom for quite some time to come.
(2 months ago)  #41 Phil
Phil
You must have misunderstood me somewhere. I don't indicate that there is a connection between prizemoney in the WC3L and the players' salaries. If I did do that, please point it out, because that was not my intention at all.

Quoting Affentod:

If WC3L is being killed - thus losing in importance - then why are salaries for the best players in that league actually rising?


Do you really, honestly, believe that it is due to WC3L that the player salaries are rising?

Quoting Affentod:

WC3L just had its by far most successful final event both in terms of on-site and online spectators. The clans in the finals now get a lot more exposure than before which is as you yourself have written the largest part of a player's market price.


As Mark Cheben also mentioned in a comment: It's China. Who wonders that the WC3L-finals held in China gathers the highest number of spectators ever. It's like saying there is ice on the North Pole. And yes, it does add to the market price - and value of the players - but the time consumed in WC3L, compared with the prizemoney and the exposure (on a market that is so damn hard to enter, that a high percentage of all foreign companies withdraw again) is just zzz.

I can see the wording is a little hard. I might need to change the bonus-question to somehing like "If the WC3L is being killed" instead of the question. Anyway, it wasn't to piss on ESL i put that in, as it serves as a summary of the article and gives another ending than Carmac's piece.

What I mean though, is that if anything kills the WC3L, it will be due to ESL not giving the teams optimal conditions for playing - and not teams drawing out because they can't afford it.

I'm forever blowing bubbles!
(2 months ago)  #13 espMisio
espMisio
Looks interesting but I'm god damn to tired to read it with understanding. Ill def. read it when i'll wake up and comment :)

Edit: Very good read - touche SK ;p
Last edited by espMisio at 04.09.2008, 13:29
(2 months ago)  #16 kellyMILKIES
kellyMILKIES
What a good write.
ku kub kubski ''>o</
(2 months ago)  #17 Unbelievable
 
This article is very interesting to read. Good response to SK stuff.

P.S. and nice ToD photo too xD

P.P.S. SK + MYM = <3
Last edited by Unbelievable at 04.09.2008, 08:24

Boo!
(2 months ago)  #19 laskAMAZING
 
pff do you know that its fucking wrong to call germans sauerkrauts? since we only eat 7kg per person of sauerkraut in a year? You should call us schweinebraten or currywurst !
(2 months ago)  #21 defs.unyy
unyy
I can agree with your opinion, however my understanding on what a WC3 team is goes beyond the WC3L or NGL competitions. Take Rainbow case as an example, before he went to mtw he was performing quite well but some months later his performance was totally different.

In my opinion due to the fact that he lost almost all of his practice partners from ex-NiP/KOW3. What i'm trying to say his: Good players are made by their own team colleagues.

My point goes exactly in the same way for GoStop, who started to underperform after his lonely stay at eStro. For me isn't quite clear if a "solo" option would be a good decision for any team.

I know this fact isn't directly related with the article but i think is a good point to discuss, mainly if we assume that a bet in double wage for a player could turn into lost money a few months later.
(2 months ago)  #56 KPicyF
icyF
One could argue that f.e. Moon didn't under perform during his solo career.
Last edited by icyF at 05.09.2008, 19:22

How do you do, my name is Trouble.
(2 months ago)  #22 Obelisk7
 
Copying business models you don't fully understand, lack funds to copy, lack experience to manage, and all that jazz is kinda like...wtf are these other teams doing.

It should be kinda obvious you don't go over budget, else you'll lose more profits then you can generate with your players in the long run. All these players are asking for "higher" salaries, and teams are attempting to satisfy those needs and whatnot...but has it ever crossed their minds that if they wanted to reach a point as a organization to heed to the needs of the players, that they themselves should just go into the players face and tell them the brutal facts: "If you want more money, you and the team need to make more money"

MYM does what they do because they can facilitate in their own individual way, and their model of doing things seems to work. Their players proved they can provide good income due to high rankings consistently, reassuring MYM and their sponsors can up the pay of their star players, and some of the other players, without hurting in the long run due to their CONSISTENCY. The team as a whole works together to make sure they can provide enough profits to keep their salaries where they are at, and people get kicked off if they don't perform well enough after a period of time, and hinders other divisions of MYM.

The other teams are being, well stupid, trying to be something they are not. They should stick to what they are BEST at, and use that to try and eventually make their teams create enough profit for higher salaries. Whether other star players like it or not, they should realize they aint getting paid more unless A) They join MYM because the organization has the funds to add them or B) Stop yapping and whining, and improve their own TEAM to help achieve this higher salary they crave for.

The Organization gave them the opportunity to make a PROFIT off gaming, and they should be grateful just for that. Any added bonuses should be earned, because the organizations are already allowing them to travel and compete in something they love doing and are good at. If the star players are doing good, but the team as a whole is not, the star players are responsibility to act as teachers and help the team overall, and understand the organization is only going to pay more if the team as a whole makes more profits. Whether one or more divisions carry the organization to allow higher salaries for all game divisions, or the organization as a whole steps up their players to facilitate their higher needs, fact is they need to stick with how they are, and the players need to accept the fact MYM is MYM, and the only MYM.

No one else can mimic that. They have to find their own way for better living.

"Take Nothing For Granted, For Everything Changes"
(2 months ago)  #23 4KFLeatherface
<
Leatherface
why so much noise now and none when 4kings disband??? ;/
4K faiting!!!!!!!!!!!!