Because they hope it will be in the future
Only profitable org I know is G2, mostly cause they have massive following in LoL and huge sponsorship and merchandise deals
The mix of ridiculously high buyout clauses mixed with high wages/salary players ask make it near impossible to have a large profit. I could only imagine like the top 5 teams in the world being comfortable with the profit they make.
(Unless your name is CHF then you just farm talent with low salary/wages and sell them for high profit.)
Depends 100% on the org of course
If you have a shit line-up making nothing from prizes, and all your income is your sponsors, while you pay them around 100k a month (combined), it probably is a garbage business.
(looking at big NA orgs here)
If you have a decent tier 2 team and well run company with sponsors, and you win some prize money every once in a while with ~20k a month salaries, it can be very profitable.
(for example early 2021 HAVU, ex-Winstrike)
People just don't know shit
There's more to it, most don't know how to run their biz so end up disbanding but rest are doing fine...
Top tier teams of course, also teams like X-Kom Ago who are heavily sponsored are surely profitable
They want to have a big market share for the future so they invest any expansion they get instead of taking it out from the company as profit for stakeholders. However NiP expanded like 300 % the last five years so they aren't doing bad. (From 1.7 million euro to 5 million euro in turn-over in the whole organisation between 2016 - 2020, a little less then that afterwards since Covid though)
However the industry of sport is that the more you invest the bigger the chance to stay at the top is, so being profitable for shareholders isn't neccessarily the point of owning a sports organisation.
the thing is, majority of them dont invest for success but rather for PR,merch and viewership.
Esports orgs are not very cut and dry when it comes to profitable, because they invest into multiple esports, often have influencers and content creators additionally, etc. so it's all a big clump and you can't really separate which sector earns how much money because they make their money from stuff like sponsors and merchandising, so big orgs just want to have a presence in everything in order to maximize publicity and therefore be interesting to sponsors and have a large fanbase for merchandise.
The big ones are probably net positive without making profit from cs directly, though it's hard to get numbers for everything that isn't Astralis(Because Astralis is publicly traded), I think Astralis is net negative but they are getting closer to being profitable each year
they pay me in sex so very profitable
Content creation orgs are the ones making big profits.
Navi is an insanely profitable org even if you take away all the tournament winnings.
ofc, why would they have the team if its losing them money
yea commissions from betting website xdd
Mastodons such as NaVi and Fnatic are surely profitable, old ones like Dignitas or Complexity are probably too, successful ones like G2 and Faze are also profitable but I really don't think any new-coming one are anyhow profitable
i think most of them were profitable, their main incomes came from sponsors and merch, while some big orgs with franchise slot like blast and esl also get a share from their tournament profit.