Strike #2: The big orgs won the battle of attrition, but the war is far from over

Tournament organizers' incentive models were only the first battleground of the new era. Now, responsibility shifts back onto teams and players.

'Strike' is a regular, critical column written by HLTV Editor-in-chief Milan "Striker" Švejda, which focuses on the new realities of a Valve-regulated circuit.

From 2020 to 2024, franchises and partnerships between team organizations and tournament organizers became the norm in Counter-Strike. This came with significant financial guarantees for those who were part of the system. In exchange for buying in, the partner organizations were being rewarded not just for their performance on the server but also for viewership and other engagement they brought to the circuits.

The catch was that this was only the case for those select organizations. It left those outside of that exclusive circle in a position where they had to fight twice as hard to get their chance at a spot in the limelight and not be able to come away with the same rewards even if they got there.

As we now know, that went against what Valve wanted the circuit to look like. The developers put their foot down with a new model of the circuit in which there is equal opportunity for everyone.

But for all the good that Valve brought with the rule changes that combat these franchise structures, the transition has been far from easy.

The former partner teams are now clutching at straws as the businesses they built around franchises in the past five years no longer make sense in the new era. There's not enough money flowing in to keep up with the expenses they had racked up under the old system, such as salaries and additional team staff.

The reason for this is three-fold.

One, as Complexity General Manager Graham "messioso" Pitt pointed out on HLTV Confirmed last October, the rewards these organizations can get their hands on following the rule changes are "not even remotely close" to the levels from the previous five years because they are being shared with more teams and are smaller.

Two, although prizemoney has increased overall because it is a crucial component of Valve's ranking, organizations cannot depend on that. The vast majority of prizemoney earnings have historically gone to the players and that mostly remains the case today, especially after the last four years saw the big orgs share in revenues with the tournament organizers — money that players either don't get their hands on at all or their share is small.

Three, when sales reached unprecedented highs at the BLAST.tv Paris Major in 2023 with a payout of more than $4.5 million per team and its players on average, organizations overestimated potential sticker earnings and upped their budgets. The PGL Copenhagen and Perfect World Shanghai Majors to take place since then experienced a just as unprecedented drop-off from that high, amounting to around $1 million and $500,000 on average, two of the three lowest payouts at post-pandemic Majors along with IEM Rio.

In an attempt to meet their bottom lines, the powerful organizations are trying to keep the status quo. After Valve introduced the new rules last year, a select few of them — NAVI, G2, Vitality and Liquid among them — began negotiating with tournament organizers as a group for additional financial incentives other than prizemoney in exchange for lending their valuable brands and the audiences that come with them to the circuits.

From the start of these negotiations, it was clear that there was going to be an odd-one-out situation on some level. The teams would never have committed to all three of ESL, BLAST and PGL at the same time. They already skip some tournaments anyway, as you can see from the IEM Melbourne and IEM Dallas team lists. It wasn't even possible given some clashing schedules; for example, PGL Astana ends the day before IEM Dallas starts.

To retain their position and attract all the big brands, BLAST and ESL refined their incentive structures to resemble their partner systems, except under the new rules where everyone can reap the benefits.

The two TOs split their incentives into three piles: the prize pool, a scheme that rewards organizations for loyalty (Frequent Flyer/BLAST vs. Annual Club Incentive/ESL), and other payouts that come in the form of straight appearance fees (BLAST) and extra prizemoney shrouded as "club share" so that the organizations can get to keep more of it than their contracts with players outline (ESL).

These models were enough to satisfy the big dogs, who agreed to attend as many of their events as possible. Negotiations with PGL did not turn up the same results and, in the end, the Romanian tournament organizer put all incentives in prizemoney — a decision that was not met favorably.

Instead of prioritizing the two tournament organizers and leaving PGL as a backup option for when it made sense to go to their tournaments, these select teams started to boycott PGL altogether. They repeatedly refused to consider attending these events in retaliation for the Romanian TO's decision to step away from the negotiating table, at least until it changed its model.

And they didn't stop there, several sources outlined. More teams were regularly being approached behind the scenes to follow suit and put more pressure on. FaZe, who were also part of the early negotiations, and MOUZ attended PGL Cluj-Napoca but then came on board with the big group in their demands.

FURIA originally accepted an invitation, but they withdrew from the tournament two weeks before it began to "focus on securing necessary travel documents for the Major in the United States," according to a PGL statement. That was a false pretense. In reality, FURIA had joined the boycott as well even though it could end up costing them dearly down the line, as I outlined in the Liquid case in the previous column.

Read more

Strike #1: Liquid's Cluj mistake

Shortly after Cluj-Napoca concluded, PGL finally budged under the pressure. On February 28 the tournament organizer announced that it would split its rewards 50-50 between prizemoney and "club share" for its next event in Bucharest, similarly to ESL.

Read more

PGL announce new prize pool split for Bucharest 2025

This was a crucial shift in PGL CEO Silviu Stroie's original stance, which he had made clear in a January 30 post on X. "In this industry, unless a prize explicitly states 'team,' 'club,' 'organization prize', or 'participation incentive,' it's assumed to go to the players. We do things differently. Instead of splitting funds across different categories, everything goes into a single payment to the organization. It's up to the organizations to decide how they use the money," he had said.

While that was a worthy sentiment, it was not in line with the current reality. Most contracts between teams and players are still structured in a way that relied on the franchises. In the partner system, club and player rewards were split in a similar way as BLAST and ESL do now to better balance what players and organizations can earn.

But that goes against the new system, in which Valve made prizemoney the main driving factor behind the value of a tournament. Organizers are now incentivized to put their financial rewards in the placement-based component (prizemoney, let's call it what it is) rather than other schemes that have nothing to do with on-server performance. Otherwise, they risk having their events count for less than their competitors' on the all-important Valve ranking.

You can see just how impactful that decision can be when you look at BLAST's model, which weighs heavily on the side of org guarantees at the cost of prizemoney, and how little the $500,000 prizemoney Bounty was worth in comparison to the $1.25 million Cluj-Napoca. The reality is more complicated than that, but you get the idea from the two events' impact on the VRS:

On the other side of that coin is the difference in guarantees. A top-four finish in Cluj-Napoca amounts to $17,500 going to the organization, assuming a very generous 20% share in prizemoney. Meanwhile, if their team remains an elite side throughout the year and attends all six BLAST events, an org like Natus Vincere will earn close to $100,000 per BLAST even by just making it to the top 6-8 each time, accounting for the guaranteed appearance fees and the expected value of Frequent Flyer tokens.

Meanwhile, ESL's solution sat between the two thanks to the "club share" portion of prizemoney now counting towards the Valve Regional Standings, which means all of their events are worth at least $1 million.

These solutions are undoubtedly going to make the organizations happy, but they're just a band-aid. This takes money away from the players, and it's only a matter of time before they start making the case that "club share" is prizemoney too and that they should be getting the cut their contracts outline.

And when it gets to that point, there's little tournament organizers will be able to do without making their events much less impactful on the Valve ranking, like BLAST did. A long-term solution should then come from negotiations between organizations and players rather than shifting responsibility onto the TOs, as Stroie's vision suggested.

That should have already started to happen from the moment Valve announced franchises would come to an end. That was back in August 2023, but because it came at a time when they just got by far the biggest injection of free money in Major history, it seems the organizations didn't quite prepare for the impact.

And even more so, it made the pressure to keep up with high salaries and other conditions higher than ever when everyone suddenly had money to throw around. No one prepared for the combination of franchises ending and the unsustainable sticker high coming down in one huge crash.

A real effort in that shift has only begun in recent times, but it is still a long way away from becoming a reality. The teams need more time before contracts can better reflect the new balance between incentives and the reality that prizemoney is now the be-all and end-all as far as Valve is concerned.

That can't happen overnight, especially when you're talking about players going down on the conditions they had been used to for years and when there will always be richer teams constantly fishing for your players and driving up the prices.

But it will have to, because there's no one else that orgs can extract more money out of to meet their bottom lines. Now, the onus is on them to stop the cycle and work towards real change instead of shifting accountability.