Esports organization T1 has successfully transformed from a loss-making marketing division into a profitable company, growing its annual revenue from $1 million in 2019 to $64 million last year. This transition began in 2019 through a partnership with the American company Comcast Spectacor, which turned the team from an SK Telecom advertising tool into an independent business.
A new financial strategy and a focus on merchandising allowed the company to find a stable source of income. Although T1 initially focused on high-margin sponsorship contracts, management quickly recognized this direction as unstable due to risks during economic downturns. Unexpectedly, the sale of branded apparel and merchandise became the largest revenue stream, shifting the financial foundation directly onto a loyal fan base, following the example of Western esports brands.
Scaling through offline projects became a key factor in achieving the company's profitability. The Homeground project allowed the transfer of local LCK matches from a standard 400-seat arena to stadiums with a capacity of 12,000 to 15,000 spectators, generating seven-figure profits for the organization over a single weekend. Simultaneously, T1 is building a network of premium Basecamp PC cafés in South Korea, but refuses to export this model to the West due to the lack of a social gaming culture there.
A selective approach to esports titles helps the company avoid diluting its premium brand status, even when financial resources are no longer a constraint. The organization exited Dota and Hearthstone and fundamentally refuses to create a Counter-Strike roster due to the game's economic reliance on gambling sponsorships, which contradicts T1's values. League of Legends remains the absolute priority for the company.
Regarding the future of the esports model, CEO Joe Marsh sees a need to move away from the classic franchising system. He proposes a shift to a "golf model," where leading organizations independently host large-scale international tournaments at their own venues, and he plans to pilot this format by inviting the world's best teams to T1's own events during the off-season.
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