The only esport I follow is Rocket League and I don't understand how orgs remain profitable.
Who has ever said they are profitable? It's no secret that esports is at best a loss leader and at worst a last man standing scenario. That was different around the year 2000 where companies like Intel made billions thanks to the growth of the home PC market and with PC gaming and porn being the obvious catalyst for that (obvious for everybody other than visionary genius Steve Jobs of course). With those profits Intel and others had no problem pumping some of that into esports, especially since in the US it can be a tax write-off because esports counts as marketing cost. That changed since it's no longer plausible to correlate hardware power with esports success, because of Intel's situation, focus shifting away from PC to other platforms, production values and therefore costs going up and other factors.
In terms of talking to sponsors the argument usually is that younger audiences can not be reached any longer through conventional channels of advertising, with sponsoring esports events remaining as a channel. Problem is that it's hard to quantify that. Sponsors also often shy away from violent video game content (Counter-Strike). Riot has often been criticized for not securing that one big, lucrative sponsorship for LoL (i.e. Coca Cola sponsoring the Olympics) while the LoL orgs do a better job with sponsors of their specific teams. Other than that esports is a lossy venture, often prepped up by investments from dubious wealthy business people (eastern europe, china) and gambling or other grey market websites. Doesn't help that "betting" and "gambling" are often mixed in people's minds. For these dubious investors esports can make sense because they see a chance to occupy the entire food chain (league + org + players union + betting sites) in a often under-regulated market with little to no political or regulatory attention.
From a player's perspective esports often doesn't make sense either, since more consistent success, less effort and often even more income can be earned as a streamer - a problem that the pro scene for League of Legends suffers from especially in north america. Organisations like C9 or Immortals often put community interaction and pro as a streamer value over success in terms of recruitment criteria for that reason. Recently it was said that G2 runs a profitable merch business, but that should be the exception.
From a developer perspective it doesn't make sense either because the western market is saturated (in terms of viewing hours) and because esports success can't be forced and instead has to come organically (see: Quake 4, Lawbreakers, Evolve). They only reason CoD recently started a pro league is that orgs were apparently
dumb enough ready to pay 20 million for their Overwatch slot and Activision saw the money making opportunity selling CWL slots for a league with no viewership. Obviously those figures can not be recfinanced through sponsorship partners, so Blizzard's entry fee is merely a test if an org has investor relations.
Viewership in western markets is stagnating as far as I can see. CSGO made headlines a while ago with 1 million consistent viewers on a stream but to my knowledge does not reach those numbers anymore. Similiar things can be said for the recent LOL worls finals (600k?). Overwatch (OWL) started on a high note in terms of viewership - with many declaring any other esport dead - and then plummeted. Compared to that CS and LOL are the only "viable" esports just because of the viewerbase. Outside of western markets there might be growth potential, but countries like South Korea, China or Japan never went through the "a gaming PC in every home" phase and at least in China companies are pretty good at protecting their market.
