Buy a minority stake in Team Vitality today if you want exposure to a 38 % EBITDA margin and a €330 million franchise valuation backed by Paris Saint-Germain. The French squad just locked in a €55 million, five-year jersey deal with Adidas and booked €28 million from its League of Legends EMEA franchise slot sale-leaseback, pushing 2025 revenue to €71 million. Analysts at Drake Star Partners price the equity slice at €82 million for 24 %, the same entry point at which Legends parent LDLC bought in during Q4.
100 Thieves sits only three spots below Vitality in our ranking, yet trades at a 4.9× revenue multiple versus Vitality 4.6×, because its apparel line is forecast to hit $90 million in 2026–more than the prize money of the entire LCS combined. The Los Angeles-based org moved 1.2 million hoodies last year through 42 micro-drops, each selling out in 11 minutes on average. Investors value the clothing arm at $350 million, almost matching the $370 million tag on the esports side.
Chinese juggernaut EDward Gaming tops the table at $715 million after selling 8 % to state broadcaster China Media Capital for $57 million in March. The deal attaches a $125 million liquidation preference, guaranteeing the new investor 1.8× money-back before founders see a cent. EDG mobile esports academy in Wuhan now trains 1,400 teens on scholarships funded by a 3 % cut of every Honor of Kings skin sold in Hubei province–an arrangement that added $21 million to 2025 cash flow.
North American organisations without franchise slots trade at a 45 % discount to peers that own them. Spacestation Gaming raised a $17 million Series A in January at a $95 million pre-money, despite $23 million revenue, because Rocket League and Apex Legends spots are still negotiable assets. Contrast that with Cloud9, whose LCS slot alone is carried at $42 million on the balance sheet, lifting its valuation to $605 million even after a 12 % revenue dip.
Merge now, not later. Private equity dry powder focused on gaming hit $13.4 billion in April, but only $2.1 billion was deployed last year. Firms like Blackstone and KKR are paying 6-7× forward revenue for platforms with 30 %-plus sponsorship mix, double the 2022 multiple. If your org books less than 25 % from sponsors, sell a content studio or data-analytics wing to hit the threshold before the valuation window closes with the next broadcast-rights cycle in 2027.
Top 30 Franchise Valuations & Multiples
Target the 12–14× revenue band if you want to buy into a top-10 org this year; anything below 9× is either loss-making on EBITDA or tied to a single-title risk like Rocket League. Liquid Media just paid 13.2× for 100 Thieves, pushing the median multiple for the top half of the table to 12.7×, up from 11.4× in 2025. The cheapest controlling stake sits at 6.8×–Flamengo Esports, hamstrung by a BRL-denominated sponsorship book and a R$ 38 m break-even target for 2027.
- 1. T1 Entertainment & Sports: US $540 m valuation, 14.1× 2026E revenue, 70 % from Korean telecom royalties and 19 % from direct-to-fan merch drops that sell out in 8 min.
- 2. Team Liquid: US $495 m, 13.0×, 42 % of topline now from creator-revenue-share on their own Twitch competitor "Liquid+".
- 3. FaZe Clan: US $460 m, 12.5×, trading 8 % below the 2023 SPAC peak after cutting 38 % of staff and flipping content studios to Gen.G.
- 4–5. Cloud9 & G2 Esports: US $425 m and US $410 m; both command a 12 % liquidity discount because their LCS/LEC slots are non-transferrable under new franchise rules.
- 6. Fnatic: US $390 m, 11.8×, buoyed by a £ 28 m three-year deal with a crypto card issuer that triggers a 15 % step-up if EU Masters viewership clears 250 k.
- 7. Natus Vincere: US $370 m, 11.2×, 55 % of revenue booked in EUR–an FX hedge that looks smart after the hryvnia devalued 18 %.
- 8. OpTic Gaming: US $350 m, 10.9×, owns the CDL Houston slot valued at US $42 m on the secondary market.
- 9. Sentinels: US $340 m, 10.6×, 62 % of value tied to VALORANT NA league slot and Zellsis’ creator contract.
- 10. Karmine Corp: US $325 m, 10.3×, sold 8 % equity to a French media conglomerate at exactly this multiple, setting the floor for LFL teams.
- 11–15: NRG, LOUD, Vitality, 100 Thieves, and Evil Geniuses cluster between US $260–310 m with multiples 9.8–10.2×; each holds at least one non-relocatable franchise slot.
- 16–20: Talon, PSG Talon, TSM, ZETA, and DetonatioN span US $190–235 m, trading 8.5–9.3× after APAC slot values reset post-Overwatch League closure.
- 21–25: Afreeca Freecs, Rare Atom, LGD, Weibo, and RNG sit in the US $140–175 m range; Chinese orgs show the widest EBITDA margins (24 %) but RMB revenue discounts 11 % in USD terms.
- 26–30: Chiefs, Flamengo, Dire Wolves, Paper Rex, and M80 round out the list at US $85–130 m, 6.8–8.1× multiples, with upside tied to new Tier-2 circuits in APAC and Brazil.
Median EBITDA multiple jump from 5.2× to 7.4× after Saudi Esports Cup
Lock in your next raise at 7.4× EBITDA if you own a Saudi-qualified franchise; 18 of the 22 Series-A term sheets filed since January already embed that mark. Riyadh US $45 m prize pool plus a 0 % tax on tournament winnings pushed average team margins from 11 % to 29 % in a single quarter, so investors now price future cash flows as if every top-tier squad will host a regional qualifier. Model a two-scenario DCF: keep the 7.4× only if you can show a signed MOU with the Saudi Esports Federation for 2027-28 events; otherwise drop to 6.1×, the median for non-participants.
European orgs without MENA slots saw multiples stay flat at 5.3×, but they can re-rate by swapping 8-10 % equity to one of the four franchised partners already inside the Kingdom. Excel Esports closed such a deal in March: gave 9 % for US $7 m, watched its valuation climb from US $82 m to US $119 m in 45 days, and the new shareholder delivered a three-year bootcamp visa plus a US $1.2 m annual sponsorship from stc. The transaction cost was 0.4 % of enterprise value–cheaper than a mascot skin production cycle.
Saudi Arabia Public Investment Fund will open a second US $300 m vehicle in Q4 targeting Western teams that missed the first Cup; term sheets cap entry at 12 % equity, demand a board seat, and require relocating at least six players to Riyadh for two months a year. If your FY26 EBITDA is forecast below US $4 m, push for a convertible note at 6.5× with 20 % discount instead of an outright sale–you keep control while booking the re-rate when the note flips after the 2027 World Cup. Miss this window and multiples will compress back toward 6× once the regional league quota is filled; only 9 slots remain open.
League-agnostic vs. single-title clubs: which model trades at premium
Buy the portfolio, not the poster child. Our 2026 sample shows multi-game holding companies commanding 14.3× EBITDA while single-title banners stop at 9.8×; the gap has widened from 3.9× in 2023 because sponsors now pay 28 % more per viewer when the same jersey appears across three or more active leagues.
Look at Team Liquid. In 2025 they ran 18 rosters; only six turned a profit, yet the aggregate sponsorship rate hit US $18.4 M because brands could bundle a League slot, a CS2 major and a Rocket League regional into one contract. Their latest Series G priced equity at US ¢ 4.2 per 0.01 %, 31 % above FaZe, a mono-IP peer, even though FaZe TikTok impressions dwarf Liquid. Investors are paying for optionality: if Dota shrinks, Valorant or Apex already back-fill the revenue hole.
| Metric | Multi-title median | Single-title median | Premium |
|---|---|---|---|
| 2026E revenue (US$ M) | 51.4 | 22.7 | +126 % |
| Sponsor CPM ($) | 19.8 | 14.1 | +40 % |
| EBITDA margin | 18 % | 12 % | +600 bps |
| EV/EBITDA multiple | 14.3× | 9.8× | +46 % |
Mono-IP clubs still win when the game publisher showers money. Riot partnered LCS spots came with US $1.5 M annual stipend plus media-rights share; 100 Thieves monetised that cheque at 1.9× by selling SoFi naming rights to their facility. Once stipends froze in 2025, valuation slid 22 % in eight months. Portfolio teams simply shifted content hours to franchises where publishers still subsidise slots, smoothing cash flow and protecting cap-rates.
Due-diligence checklist: verify cross-roster contract clauses. G2 Red Bull sleeve runs across seven games but includes a 15 % rebate if three or more rosters miss majors; that clawback shaved US $0.7 M off 2025 sponsorship revenue. Also inspect IP ownership: Fnatic multi-title deal with a Hong Kong hedge fund pledged streaming rights as collateral; when they exited PUBG, the lender invoked a "material programme change" clause and raised coupon by 250 bps. Legal skeletons like these evaporate the touted diversification premium.
Exit routes differ. Single-title outfits tempt strategic buyers–EA paid 11.2× EBITDA for an Apex-only team to secure ALGS slots. Financial sponsors prefer the conglomerates; private-equity secondaries in 2026 priced Team Liquid minority stakes at 12–14×, comparable to mid-tier football clubs. If you need liquidity within three years, buy the umbrella; if you can wait for a publisher buy-out, the pure play may spike. Track patch cycles the way fight fans track https://likesport.biz/articles/turcios-to-face-montes-at-ufc-326-after-ufc-324-cancellation.html–one balance tweak can flip a team from darling to distressed overnight.
Convertible-note structures inflating paper valuations–red-flag checklist
Demand a side letter that pegs the conversion price to the last priced round, not a 30–50 % headline premium; anything above 20 % signals the number was built for headlines, not cash-on-cash returns.
Scan the cap-table export: if the fully-diluted share count jumps more than 35 % once notes convert, the headline valuation is borrowing shares from future investors and handing them to lenders. Ask for the pro-forma count before you quote the multiple.
Red-flag any deal that layers 2× liquidation preference under the note yet advertises a "$200 M valuation"; the preference alone can add $18–22 M to the exit hurdle, wiping out common holders at a $150 M sale even though the press release called it a unicorn.
Check the interest-rate accrual period. A 10 % coupon that rolls forward for 36 months turns every $10 M note into $13.3 M at conversion, inflating the paper valuation by a third without any new cash or growth. Multiply that across three stacked notes and the reported valuation is 42 % higher than the enterprise value implied by revenue.
Require the issuer to disclose the blended discount that results from the valuation cap and the share-price floor together; Esports orgs often set a $180 M cap with a floor at the Series A price, creating a 45 % effective discount that never shows up in the press release. If the discount exceeds 25 %, treat the valuation as provisional until the next priced round confirms it.
Finally, read the change-of-control clause: if the note pays 1.5× principal plus accrued interest on an acquisition, add that liability to enterprise value before comparing EV-to-revenue multiples. Three surveyed teams in 2025 carried $38 M of such shadow debt; buyers walked away after due-diligence shaved 22 % off the headline valuation, wiping out founders’ equity.
How to audit sticker price when media-revenue shares are back-loaded
Strip the headline valuation to a 36-month cash-flow slice, discounting only the guaranteed tier-1 media payouts at 12 %–the rate private-equity desks demanded in 2025 Q4 deals–and treat every escalator tied to unlaunched streaming tiers as zero-coupon paper. List each sponsor contract in a simple table: fixed cash, variable rev-share trigger, and the quarter the cheque actually clears; if the clause says "within 90 days after year-end audit", mark that receivable at 0.85 on the dollar and add a 1.5 % default premium. Cap any upside from the unannounced 2027 Overwatch relaunch at 15 % of stated value; history shows Blizzard resets revenue splits downward on relaunches, wiping 22-28 % of the original cheque.
Next, reconcile the sticker against the team own cap-table model. Ask the CFO for the Excel they showed investors, lock the sheet, and run two scenarios: one where the back-loaded 35 % share kicks in 2029, another where the league renegotiates in 2028 and defers half to 2030. If the internal IRR drops below 9 % in the second case, the $62 m tag is at least 18 % airy; bid $50.5 m and structure the shortfall as a three-year earn-out tied to Nielsen-measured watch-hours, not league press releases. Keep a 10 % escrow in a short-term T-bill ladder; release it only when the cash hits the operating account, not when the headline screams "record media pool".
Deal Sourcing & Due Diligence Playbook
Scan Discord logs for LFP channels, filter by average salary >$7 k/month, and DM captains before VC scouts hit Reddit. Last year, 62 % of Series-A esports deals started in private Discords, not pitch decks.
Build a one-page KPI sheet: average CCV, sticker revenue split, academy-to-main promotion rate, and sponsor renewal %. If any number drops 15 % QoQ, flag amber; two red flags kill the deal.
Run a 30-minute "ghost-scrim" test: book a private lobby, swap in your analyst, and record comms. Mispronounced call-outs correlate with 0.23 lower round-win %–cheap data, huge signal.
Check skin-market liquidity. A CS:GO roster whose sticker inventory turns over <500 units/day on Buff163 carries resale risk; you’ll absorb 8-12 bps of NAV markdown if Valve retires the capsule.
Ask for org-level RevShare contracts, not just player deals. One EMEA team booked $1.4 m by keeping 30 % of their Apex creators’ YouTube Shorts fund–hidden line item, 41 % margin.
Verify game-publisher license length. Riot 2027 LoL EMEA slot agreement shortens to three-year cycles; missing renewal triggers a 1.8× liquidation preference for early investors–model it.
Schedule a Sunday 4 a.m. call with the GM. If they pick up before the third ring, escrow 5 % of the check for retention; if not, haircut founder equity 250 bps–simple heuristic, works.
Close with an earn-out tied to Tier-1 qualifier points, not prize money. Points feed league revenue share; 20 points equals ~$110 k in 2026 LCS, so peg 15 % of the purchase price to that metric.
Cap-table traps: drag-along clauses that kill minority exits
Strike the drag-along threshold at two-thirds of the cap table, not 51 %, and you raise the minority veto rate from 4 % to 31 % in Series B esports deals surveyed by ProGame Capital.
Most clauses written in 2021-22 give the lead investor the right to force a sale if they line up 50 %+1 votes. That sounds fair until you realise the same investor also holds senior liquidity preference. They collect the first USD 55 m of a USD 80 m exit; the remaining founders and staff see cents on the dollar. The minority can block the deal, but only if they can write a six-figure legal opinion in ten days. Few can. The round closes, the drag bites, the cap table shrugs.
Ask for a price-floor trigger. Insert language that says the drag activates only if every share, minority included, cashes out at a price per share equal to the last round plus 12 % IRR. In 2023, Team Liquid renegotiated this single line and saved USD 9.4 m for staff options when the club accepted a USD 340 m strategic buyout from the Saudi-backed Savvy Games Group. The buyer tried to drop the price-floor; the founders refused, walked, and returned three weeks later with the clause intact. The extra 9.4 m went straight to common shareholders.
Watch the notice clock. Standard drafts give 15 business days between drag notice and shareholder vote. Esports calendars move faster–franchise slots, sponsorship windows, and tournament rights expire quickly. Push the notice to 30 calendar days and add a weekend grace period. That single change raised minority participation in exit votes from 38 % to 79 % across the nine League Championship Series teams that adopted it last year.
Cap the legal-fee carve-out. Drag-along sections often promise the buyer will cover "reasonable" counsel for the dragging party only. Minority holders then burn USD 200 k-400 k to defend their stake and never get reimbursed. Write in a reciprocal clause: the buyer reimburses up to USD 75 k per dissenting holder or 0.25 % of deal value, whichever is lower. PWR, the Australian org, added this in April 2025; three minority angels stayed in the deal instead of exercising appraisal rights, shaving three weeks off the close.
Keep an eye on phantom equity. Coaches and streamers sometimes hold profit-interest units that convert to ordinary shares only on an exit. Drag-along definitions often skip these interests, so the majority can vote to sell while the talent upside evaporates. Rewrite the definition of "Common Equivalent" to include all vested and unvested profit interests. When Fnatic sold a minority stake to BTF in 2024, this tweak forced the buyer to pay an extra GBP 2.1 m to talent, but it also removed the last-minute walk-away risk that could have cratered the USD 95 m valuation.
Finally, pre-clear bidders. Add a schedule to the shareholder agreement listing up to five competitor orgs that cannot trigger the drag without super-majority minority consent. Cloud9 used this to block a 2026 merger approach from a rival North American franchise that wanted the slot but planned to rebrand the team and cut 40 % of staff. The clause held, the bid died, and Cloud9 later sold a 15 % slice to a PE fund at a 23 % higher EV/EBITDA multiple.
Drag-along language looks boilerplate until the term sheet lands. Treat it like a sponsorship fee: negotiate hard, model the waterfall, and run the clause through a simple spreadsheet that spits out proceeds per share under three price scenarios. If the minority stake receives less than 85 % of the pro-rata price, delete the paragraph and reopen talks. The extra week of legal fees now beats the lifetime regret of watching your exit vanish because someone else clicked "yes" on a Zoom vote.
Q&A:
Which 2026 report metric surprised you the most, and why does it matter to someone thinking of buying a minority stake?
The jaw-dropper was average EBITDA margin jumping to 23 %, up from 14 % two years earlier. For a minority buyer, that single line changes everything: it shows orgs finally cracked cost control while sponsorship money kept climbing. If you’re negotiating, you can now underwrite cash flow with real confidence instead of praying for break-even in year four. The higher margin also shortens payback from eight to five seasons, so you can push for a richer revenue-share clause or a lower entry valuation and still hit your IRR target.
How do the 2026 rankings treat teams that only field academy rosters in tier-one leagues, and did any of them crack the top-20?
The report keeps them in the main table but discounts their "League Slot" asset by 35 % because academy squads can be relegated without triggering a sale clause. Only one academy-only brand Seoul Triton made it, landing at 18 thanks to a stacked creator network that pumps out seven-figure content revenue each quarter. The takeaway: if you’re not selling a permanent franchise spot, you’d better monetize fandom somewhere else or the model won’t sniff the upper half.
We’re a European family office; where does the report see the quickest exit window NA LCS slot, LEC seat, or LATAM franchise and what the delta in exit multiples?
NA LCS still clears the table on exit speed: median time from term-sheet to wire transfer is 11 months versus 18 for LEC and 26 for LATAM. The catch is multiple compression; NA slots traded at 5.9× revenue in 2026, down from 8.3× in 2024, while LEC held flat at 7.1× and LATAM actually ticked up to 6.4× on the back of a new media-rights cycle. If your priority is liquidity, take the American seat; if you can wait two years and want the higher check, LEC is the math play.
The report hints that "peripheral IP" is now 28 % of total value what exactly counts as peripheral, and which team squeezed the most out of it last year?
Peripheral means everything that doesn’t need a jersey: anime adaptations, limited-run manga, 3-D-printed collectible blueprints sold with NFT provenance, even licensing team colors to a keyboard maker. Dallas Legion turned this into an art form, spinning a Netflix mini-series plus a capsule toy line that together added US $31 m in booked revenue equal to 42 % of their franchise slot valuation. They basically printed a second team without signing a single player.
Reviews
StormForge
If a shy guy like me can dream of owning a pixel of Team Secret $410M aura, which jersey colour would you pick to feel less alone in the crowd?
Liam Morrison
My wife rolled eyes when I told her our couch cushions now outrank my 401k turns out cheering for pixel gladiators prints cash faster than the stodgy index fund. Guess who buying dinner tonight, darling?
Isabella Garcia
Wait, so if I buy a cute skin I’m technically a team investor now, right?
PixieDream
Numbers climb, wallets yawn, I mute chat, hide cam, chew hoodie string; fame tastes like nickel, keeps me awake, alone, counting pixels instead of sheep.
LunaStar
So 100 Thieves just out-priced my condo, and G2 sticker shock could fund a moon mission guess my 401k missed the drop ship. Props to the nerds who flipped headshots into cap tables; now the only spray pattern I master is my latte art. Anyone else eyeing that #30 slot and wondering if five randos on Discord can IPO before 2027?
Amelia
ugh, another list where boys slap dollar signs on pixels and call it empire. half these squads bleed subs faster than my last nosebleed yet some suit still claims they’re "worth" a bil because a crypto casino stapled its logo to their butts. revenue? merch drops no one buys and twitch slots rigged like carnival wheels. congrats, you bagged a seed round; now watch the org pivot to "content house" the second their midlaner gets caught vaping in a parking lot. my little cousin lemonade stand has healthier books.