eSport consulting is a cutthroat business

July 12, 2015

December 2012 was maybe the most important month in my career so far. I made a big cut when I decided I did not want to work with and for SK Gaming anymore.

The reason for that is that I’m enjoying working in the export management industry with more than a hundred local farmers on a personal level where I can actually change people’s life’s to the better if I do my job right, and I’m able to enjoy the rest of my days hopefully in the most beautiful country on this planet.

All I need to be happy is four walls and a roof, a slice of bread in the morning I can put some marmalade on and a coffee. That’s how I was raised, to be thankful for what you have and try to make enough money to support your family and their dreams and hopes. I’ve never been jealous of someone making more than me, and I can genuinely enjoy the success of others.

That said, being a marketing executive has been fun when I was younger, it still is today but in the beginning it was super exciting and challenging to compete with people who studied and had years of theoretical knowledge ahead of you and a proper degree. I always had to be better than them performance wise to proof that I’m the right guy for the job, and I love a good challenge.

I am still doing a bit of consulting work here and there but not many companies are willing to pay my hourly fee and a signing bonus for teams until they realize that their marketing team with absolutely no experience in eSports either wasted a lot of their money or are at a huge disadvantage because they don’t know how teams operate, what their competitors pay and what operational costs they have at all getting them in a tight spot as a sponsor in negotiations. Out of my head, ten other people on the planet worked on both sides of the table or are even remotely qualified to do the same job I did. This is not bragging but the ugly truth. eSport needs more people like us.

It sometimes needed a few weeks before companies realized that they are at a disadvantage and what I charge is only a fragment of what they could have saved in the first place if they hired me earlier. As said I’m still helping out here and there for the bigger sponsors that send me an NDA and then contract me for a few hours looking at offers they have been made to help them choose a team that fits into their company culture and budget but I’m doing that because I’m friends with some people who rely on making the right decisions to keep their jobs, not for getting rich in the process.

And despite those other nine guys being my competitors back in the days I’m still happy to introduce any client that approaches me and I don’t have the time for to deal with one of them, because I think it’s not important who makes the deal ( unless you need the money ) it’s important that new companies getting into eSport build on a solid foundation with solid partners they can build a relationship with over the years.

A bit more than two months ago I got a call from an executive of a  multinational corporation that designs and manufactures sports shoes, clothing, and accessories. They had done some research and wanted an expert opinion on how to best approach the market regarding individual player and team sponsorship and help working out a proper strategy and proposals for teams they wanted to approach.

My grandma in Germany died eight weeks back, and I was busy with family stuff, business and not on top of my game. So I told him I’ll be happy to look at it and give feedback for a maximum of twenty billable hours over the course of a weekend but I’m not able to commit the time that would be needed to properly work out a marketing strategy with their team and prepare the proposals they wanted, make the contact to the players and teams I know and negotiate for them.

I referred them to another consultant who is based in the US and who I believe was the perfect fit because they wanted to approach teams and players based in the land of the free. They promised to follow up to have me double check the work he did.

This Friday I got the call. A little bit of small talk and a thank you for saving them a good percentage of their planned budget later he told me that the consultant I referred him to was constantly smack talking me when they told him I’ll double check his work.

I sat down with a coffee yesterday morning and until a few hours ago I did exactly that, and it turns out I know exactly why he did it. If you’re a good consultant and take care of your clients what you do is you work for the client. That is what they pay you for. You’re not working for the teams or players at that moment, no matter how much you like them or how long you know them.

A quite sneaky trick many consultants use is that they double negotiate, they promise the team to give them an extra five percent from the clients budget if the team is willing to pay that five percent to the consultant as a bonus or consulting fees over the course of the sponsorship. You might ask yourself why would they take an extra 5% and give them away again? Because otherwise he’ll walk away and look for another team or give them a worse deal. Strong arming teams into a sponsorship is a bad way to do business. Finding a compromise where both, the client and team are happy with is the key to a successful long-term relationship based on trust and respect for each other.

That said if you know three components, the approximate operational cost of the team, what the other sponsors are paying and the fact that teams want long-term relationships to provide some security for themselves you can leverage them pretty well to make a fair offer you know they will take while still saving your client a lot of money.

Let’s say you have a $5M Budget to work with and the client wants you to sign five teams for five years. If you take a 5% cut on top of your consulting fee from the teams after they get paid by the sponsor that’s an extra $250.000 for the next five years in your pocket. Also, that means from the $200.000 your client thinks he’s paying each team a year the consultant takes $10.000 for himself per year.

With that $250.000 the client is losing out on another team sponsored for a year and 10 – 15 marketing incentives a team could provide for the extra $50.000. You see where the problem is.

The client gave me permission to approach the teams and players the other consultant wanted to sign and by simply telling them that we need to cut the proposals by 10% because the client is going through a “transitional period recalculating the budget”the reply “But the guy we worked this out with is already taking a 5% consulting fee from us if this is happening, sorry but the best we can do is 2%” was enough to have proof that the consultant tried to f*ck with the client.

Needless to say, I can’t keep stuff like that for myself, so I’m pretty sure someone is getting his contract terminated immediately, and the client already told me to freeze the negotiations, and they need to rethink this. Which most likely will end in this is not going to happen at all because the client feels burned.

There are a few lessons to be learned from this.

Never f*ck the client.

Hire the right people to get the right job done.

Don’t vouch for people unless you can double check their work if it’s your reputation on the line.

I hate working on weekends and you should too.


Bjoern Franzen

Personal blog of Bjoern Franzen
Marketer, eSport consultant and Developer

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