The Esports Advocate has learned that the International Esports Federation (IESF) is negotiating with Lviv, Ukraine, to host its flagship event, the World Esports Championship (WEC 2025), later this year. Sources close to the matter confirmed that the city has already made a preliminary payment of $1 million USD as part of a potential $10 million agreement. However, this deal carries significant conditions due to Ukraine’s ongoing war with Russia, raising critical questions around safety and the optics of hosting such an event amid a national crisis
In a March board meeting presided over by IESF President HRH Prince Faisal bin Bandar bin Sultan Al Saud a formal vote was held to host the 2025 championship event in Lviv, Ukraine’s seventh-largest city, situated approximately 70 kilometers (43.496 miles) from the Polish border. Lviv, relatively insulated from frontline conflict zones, would nonetheless require logistical considerations for participant travel, primarily involving transit through neighbouring Poland.
Sources indicate that the IESF urgently needed the financial injection from this deal, having depleted its reserves in March, resulting in substantial staff layoffs. The funds from Lviv, supplemented by a separate advertising deal worth $250,000 with an unnamed Indonesia company, are pivotal for the organization’s operational viability through the coming year.
However, significant hurdles remain. The contract reportedly mandates a minimum three-month ceasefire or peace period ahead of the championship to ensure participant safety. Additionally, the IESF has contingency plans to defer the Lviv deal to 2026 if a more advantageous alternative emerges for 2025.
Political and Financial Optics
Beyond logistics, local politicians will face scrutiny over the $10 million expenditure amid wartime austerity. This concern might particularly resonate with U.S. observers who could perceive the event as “wasteful spending” while extensive international military and humanitarian aid is provided to Ukraine (for example, check out this recent report from the Council on Foreign Relations). Crucially, the funds are earmarked specifically from Lviv’s municipal budget, not national Ukrainian coffers.
Taxation Controversy at Previous Event
Adding complexity, the IESF is concurrently navigating fallout from WEC 2024 held in Saudi Arabia. Member federations, notably Portugal’s, criticized the IESF for unexpected tax withholdings, claiming mismanagement and a lack of transparency. Portugal alleged they received only 85% of their $700,000 prize earnings due to a 15% withholding by the Saudi government, which was also inconsistently applied across member federations. The IESF admitted four federations were mistakenly paid in full, exacerbating concerns about administrative competence and fairness. Furthermore, the IESF’s board members determined that federations that were impacted by these so-called taxes should go to their home country’s government agency in charge of taxation to seek a refund on the taxes that were taken out of their prize winnings by the Saudis.
The Portuguese federation harshly rebuked the IESF leadership, calling for resignations, and labeling the oversight as “unacceptable.”
IESF Responds
In response to these allegations and concerns over its operational stability, the IESF emphasized an ongoing restructuring effort aimed at enhancing financial oversight and organizational efficiency. The federation claims to have stabilized its financial footing following recent investments and sponsorship arrangements.
Regarding the controversial tax deductions from WEC 2024, the IESF board promised an ongoing review and resolution. Additionally, it reiterated that the selection of Lviv remains one option among many, emphasizing that safety and strategic alignment with broader organizational goals are paramount.
In a statement to The Esports Advocate, the federation clarified: “The IESF Board is united and strategic in its decision-making. Our focus remains on expanding global opportunities for esports, including supporting regions where esports can play a role in resilience and unity. Every decision is made based on a balance of safety, opportunity, and long-term development.”
As negotiations continue and scrutiny mounts, the IESF’s decision on the WEC 2025 host city will serve as a crucial indicator of its ability to balance urgent financial needs with responsible governance and stakeholder trust.
Below, The Esports Advocate provides direct quotes from email communications with the Portuguese Esports Federation and the IESF for additional context and transparency.
Portuguese Esports Federation
In an email to TEA last month, a source at the Portuguese Esports Federation told us:
“We were paid 85% of the total prize pool. We earned $50K from 2nd place in CS2 Open and $20K from CS2 Female, but we got $59.5K (85% of $70K). IESF sent us a letter saying that the Saudi Esports Federation applied a 15% government withholding tax, meaning SEF only paid IESF $850k from the $1M promised to prize pools. So then IESF decided to apply the same 15% deduction to our prize pools.
“However, we came to know later that the Saudi Esports Federation paid them an additional $1M, also with withholding tax of 15%, therefore an additional $850K for the fee to organize the WEC24. This means the IESF received a total of $1.7M but even then, decided to apply a 15% deduction to the payment of prize pools, allegedly to pay ‘previous debts.’
“We believe that the correct decision would be to pay the prize pools in full ($1M) and use the remaining $750K to settle said debts. Today, we also were made aware that 3 of the countries got paid before all the rest and they were paid in full (100% of the prize pool) and the remaining countries got paid in late March, and only 85%. The IESF secretary, Boban Totovski claimed that these 3 Federations got paid in full “by mistake”. This is not only a case of mismanagement, it’s also a clear case of incompetence, and discrimination of some Federations and Players over the others. It is simply unacceptable and the current board and secretariat should resign immediately. An organization with over 150 national federation members cannot be governed with such incompetence.”
International Esports Federation
A representative from the IESF responded to questions from The Esports Advocate last week in an email.
On the temporary layoffs that occurred in March, the IESF said:
“IESF is undergoing an internal restructuring process aimed at improving efficiency and adapting to the organization’s evolving needs. As part of this transition, certain team changes and staff transitions have taken place. The team remains fully committed and continues to operate in alignment with IESF’s strategic goals. One of IESF’s key objectives is to optimize all operations, including human resources, to ensure long-term sustainability.”
On the organization’s financial health, the IESF said:
“The financial situation of the IESF remains stable. Following the most recent General Assembly, a Treasurer was elected to the IESF Board, and enhanced financial protocols were introduced. While some payments may experience delays due to the implementation of these new procedures, this reflects stronger financial governance, not a lack of funds. In 2023 and 2024, the organization faced several operational challenges, such as the allocation of the 2025 World Championships. The responsibility was assumed by the General Secretariat in collaboration with the elected Treasurer and dedicated esports supporters. Concrete progress has already been made, including the launch of a new sponsorship package, the generation of fresh sponsorship revenue, and the signing of a host for the upcoming World Championship. Sustainability remains our key priority, and we are confident about the future.”
(It should be noted that—according to our sources—this response came after the organization had secured some funding for future events as mentioned earlier – ed.)
On the controversy over taxes related to the WEC 2024 event in Riyadh:
“The distribution of prize pools is currently underway. The IESF Board is actively reviewing the situation, including any discrepancies related to payouts and external factors such as tax implications. A formal update will be provided upon completion of the Board’s review process.”
The IESF did confirm it is negotiating with Lviv, as well as other potential hosts for the 2025, but did not acknowledge that the deal has been sealed:
“IESF is currently in active discussions with over ten potential host cities across various regions. Due to confidentiality agreements and the ongoing evaluation process, we are not disclosing any specific locations at this stage. While Ukraine has presented a very comprehensive hosting plan for WEC 2025, including guarantees regarding the safety of all participants, IESF continues to engage with other interested parties. The official host for the 2025 World Championships will be announced once the bid process reaches its contractual conclusion.”
The IESF would not confirm a $1 million down payment from Lviv.
“We cannot comment on the specific financial terms of host city agreements, as they are subject to strict confidentiality clauses. All host proposals are carefully reviewed to ensure they align with IESF’s strategic goals and provide optimal conditions for participants and the global esports community.”
On replacing Lviv with a better location should come along—as mentioned by a board member in a meeting in March, the IESF told us:
“IESF is committed to delivering the best possible experience for the global esports community. Host selections are based on a comprehensive evaluation of criteria, including infrastructure, safety, logistics, and financial capacity. In this case, the safety of participants is our top priority, especially given the current geopolitical situation.”
Finally, on choosing Lviv as a host city, we asked if this was an act of desperation on the part of the organization, or if there were other considerations at play, the IESF offered the following response:
“The IESF Board is united and strategic in its decision-making. Our focus remains on expanding global opportunities for esports, including supporting regions where esports can play a role in resilience and unity. Every decision is made based on a balance of safety, opportunity, and long-term development.”