As a disclaimer, I don’t follow sports at all so my opinion about this comes directly about incentivization of winning. There are very few team owners that own an esports team to just make money. I haven’t talked to any of them, all you need to do is look at their actions to tell you what you need to know. No one wants to be the laughingstock of the NA LCS. (Though there have been cases of teams playing to get money in LCS Challenger, Cloud 9 being the most recent). In the perfect world, the esports team owner wants both money and to win.
So the question is always how much are you willing to sacrifice for that victory. How far are you willing to go? In the case of Wings (Dota2 team), they left money on the table for both themselves and their players when they refused to do streaming like the rest of China. That is a huge amount of money, especially now as they are TI Champions. CLG did something similarly with their League of Legends team early on when they went to Korea. A counter example is CLG in CS:GO. They had a really strong NA CS:GO team, but were unable to capitalize on their success and draw in new talent. Instead they ran the same thing over and over again until they started to bleed out players. The biggest example of mismanagement was refusing to trade tar1k for a player. Instead they waited for someone to buy him out, which got them a giant sum of money, but left them with no clear star player. In the case of Fnatic and Godsent, KRiMZ wanted to leave Godsent so in exchange they got lekr0 back.
Of course, it’s understandable from a fan point of view why they want regulation to exist. Nothing is more exciting than watching a team’s life on the line, but franchising doesn’t necesarily mean that a team will play for money or play to win. That depends on the team itself.