If we had sponsors we wouldn't need as high an entry fee.
Additionally, 300 crowns is easy enough for an alliance to come up with. But considering it would be a pot prize, its a gamble/intense game of skill. If you don't make one of the top 3 positions, it would feel kind of upsetting.
Also keep in mind, each fight earns crowns. Assume 8 alliances participate, and 20 crowns total (between the winner and loser), thats 240 crowns produced from the carnage each day of matches. 1,680 crowns in total by the end of the tournament.
Even if you were to lose every single match and only get 5 crowns per battle, your 3 alliance members would have earned a total of 105 crowns by the time the tournament ended. Doesn't quite cover your losses, but this assumes you lose every match, and doesn't really count the fun you'll have while fighting. =)