"Esports is not for the faint of heart": YFP owner shows 2024 financial losses

The esports world can be an unforgiving landscape, where only the headstrong and strong-willed will survive. Many teams have come and gone throughout the years, but many people know that it is extremely hard to turn a profit in the industry. Neema Mahmoodi, the co-owner of North American esports organization YFP, has unveiled the team's balance sheet for 2024, and it is a very transparent look at how tough the scene can be.

Esports is a tough business

According to the social media post, YFP lost around $78,000, after calculating all of the expenses and the income they had over the year. They made the most from stream sales, which added up to just over 10 thousand dollars. The team spent $72,000 dollars on player contracts, and almost $16,000 on staff salary, far overshadowing the income they had made from brand deals and stream sales. Mahmoodi said that when the team qualified for VCL - North America Split 1, they were going to "double down for the good of the organization" in order to help the team grow and reach new levels. He did admit, however, that "people just don't value this title as much as we paint it out to be." Even though they had one of the most dedicated staff, YFP could not compete with teams like M80 or Cubert Academy, since they don't have the same social engagement or following.

I have learned to live with that lost money and I do not regret it, but what I want to show is that can you grow a grassroots organization? Absolutely, but have the ability to grow naturally or be ready to put the money in.

Mahmoodi says that he reached out to multiple tier one organizations to partner with them, did a revenue share for their merchandise, and created a membership program for their fans, but ultimately, they all failed to produce meaningful results. It has been rough sailings for YFP on a business standpoint, and will take a lot of effort to turn around.

For the risktakers

The level of volatility in esports is well-known, as seen from the countless teams that have been forced out or have partnered up with other organizations. For example, popular streamer and team owner Disguised Toast revealed in 2023 that he had lost one million dollars after starting up his own esports team Disguised.

Unfortunately, business owners are all too familiar with the losses that can happen when getting into esports. Esports can be a scary venture, and is meant for those who are truly passionate about the scene and those who are willing to invest a significant amount of time and money—without expecting significant returns.