In principle there is no reason a site like Lichess can't hold tournaments with a prize-fund sourced from commercial sponsors.

The problem is that companies like chess.com and chess24 tend to sponsor these things, and they're in direct competition with lichess.

Lichess needs money itself. It survives off donations.

The evidence points that it is pretty far from being able to sponsor chess players and let them make a living from doing what they love, like a commercial platform could do.

If you read my comment carefully you'll find I didn't say lichess themselves could sponsor prize funds. I explicitly said they'd have to source the funds from other sponsors.

Who would then drown the site in annoying ads.

I think it is. I can’t stand Danny Rensch though. His commentary is very obnoxious, and listening to him talk over the Super GMs that he’s had on the few chess.com streams that I’ve tuned into has been terribly frustrating.

What I can't stand about him is his willingness to lie through his teeth to protect whatever party line chess.com need sold at that time. That they weren't adjusting ratings, that they weren't scraping broadcasts from other sites, that they don't forbid their streamers from using other sites...all things he's said with a straight face that got proved wrong and later had to be admitted.

Chess.com isn't _allowing_ anyone to do anything, right? There are sponsors and streamers, and chess.com there in the middle but there's no specific reason it has to be them, or that streamers for example couldn't be sponsored directly. I think for chess.com they want to insert themselves as a kind of broker because it's good for business to put themselves in the middle like that.

Would clubs etc. be interested in sponsoring players, if players would just play elsewhere? I assume in that case clubs will not get any brand recognition boost from being advertised?

What I was trying to say was that being sponsored by a place you play isn't the only option. Here's the list of FIDE sponsors, as one example: https://worldcup.fide.com/info/partners-and-sponsors

Instead of individual streamers being sponsored by venues, which then forbid them to play in other venues, they could be sponsored directly by the advertisers who sponsor the venues, and agencies could represent/group them. Just like how it works with e-sports. Riot Games for example doesn't pay all the pro players to exist, there's a whole ecosystem.