I've hosted a few Smash tournaments myself and venue fees are steep if you can't get it for free. Especially when you have to have enough room for a TV per player, or twice the rental time if you have to have double match rounds. Accommodating such tournaments would require a large player turnout in order to provide a suitable prize pool. Plus what's the definition of a "small tournament"? Semi-Finals alone would count sixteen players. Four contesting teams would better be called a SquidFest than a tournament.Splatoon is likely to have some pretty small tournaments scattered around, with, hopefully, a couple of relatively large ones every once in a while. As far as small, grassroots tournaments go, you have to remember that almost everyone in a pro scene for splatoon will have their own setups. So, you could probably go for something like a $50, $40, or $20 entry per team (mostly depending on the size of the tourney itself. Also, obviously, these are super rough estimates), plus venue fee, which is usually like $5 per person, or $20 per team. A lot of venues offer the chance to waive the venue fee if you bring a setup.
My general source for this post is basically just the time I've spent in the smash community. Once again, this is all pretty rough estimates, but I imagine the average small tournament you attend will have around a $10 or $15 cost per person. (this includes venue fee)
Personally I feel an online league would be best.
EDIT: SquidFest is now the official term for Splatoon gatherings. It' cannot be undone.