>I suspect that we'll see Esports taking over physical sports in terms of numbers in the next decade or so.

Absolutely not! Sports is heavily fragmented, for E-Sports only the world leagues and a few games in a few countries are that lucrative. In Sports you have much more competition also and tradition that isn't just going away and can keep people from pivoting to pc games, if it doesn't that's kinda sad. Gaming might not have reached it's full potential and it's very accessible in industrial nations, but based on more complex rules the learning curve is also higher, cutting off a lot of the lower base of unprofessional players, the foundation where to foster pro players.

I agree that Riot could do more with the spectator experience, but you should be careful comparing Valve's International profits with Riot's Championship Series. For one, the cost of Riot's esports push encompasses the entire scene, around the world. Riot pays player salaries for the players on every professional team in their sponsored series, which have tournaments and matches pretty much every week throughout the year. They have these series in North America, Europe, South America, SE Asia, Korea, China, and Australia, each with many teams of five players each. So, with an armchair estimation, it's easy to see how just the cost of those salaries without any benefits could be in the tens of millions. Then you have to factor in the support staff, facilities, equipment, travel, and much more. Valve sponsors one single tournament a year, and offsets the cost by selling interactive features. Ultimately, they are just different models and I think both could learn from each other.

On the other hand, Riot's tournaments account for most of the LoL pro scene. There are tournament games of DotA 2 going on almost constantly, but they're being run by independent sponsors, not by Valve.

This used to be the case in League too back in Season 2 (so a bit over two years ago), that it is no longer the case is very much by design.

Are there any reliable reports about size of LoL? All I've seen is Riot-made infographics without any backing. On the other hand http://steamcharts.com/app/570 seems trustworthy.