What Is Going To Happen To High-Stakes Fantasy Football?

Tom Kessenich · Post by **Tom Kessenich** » Mon May 09, 2011 5:43 am

We're definitely excited about the move to STATS and believe that will help us point the NFFC back in the direction it always meant to go - and then some. I think our success with the NFBC this year speaks to that belief. Greg and I couldn't ask for a better situation than the one we're in now. It really is everything we could hope for. Great company. Great people to work with. A proven backend in place to run our leagues and the understanding that producing quality results is far more important than merely talking big.

I'm not concerned about the NFL losing a season or even some games. I think the full 16-game schedule will be played. There's simply too much at stake for both sides to have any games be lost, much less a season.

The concern is when will a deal be struck? I don't think this can go much past Aug. 1 and even that is a compressed time frame when you consider all of the player moves that need to be made and the amount of workout time that's needed for the season to not suffer significantly. My hope is that either a new deal is struck or a court order forces the season to begin no later than July 1.

[ May 09, 2011, 12:00 PM: Message edited by: Tom Kessenich ]

Greg Ambrosius · Post by **Greg Ambrosius** » Mon May 09, 2011 8:05 am

Originally posted by Old School:
Hey Tom and Greg

So happy that you guys got the reigns back from you-know who. A long as you guys are running the show, I'll be back to play in the NFFC every year.

That is providing there's football.

I have a bad feeling we will see see no football this year. I actually blame the players union. The last CBA was so one-side in their favor, that football was headed for a disaster. They are the ones that hired a sleazebag lawyer and brought it to the courts.

I hope I'm wrong. Football was one of the few escapes from the harsh realities of life.

BTW, I personally think the playoff format of the NFFC is the best and most fair. Please don't change . Thanks Joe. I think we know what makes a good event/contest and what you folks want from a good event/contest. Now let's put those together, continue to innovate with our products and pay everyone AS EARLY AS HUMANLY POSSIBLE!! Providing competitive contests, great experiences and paying on time every time are the keys to these events. There's no reason that we can't hit a home run in every aspect with STATS behind all of this.

As Tom said, we did it in baseball and things couldn't be going smoother. After last year, it's amazing to go to bed each night without a single email request or wake up in the morning without a single email request from our baseball users. Everything is just working so smoothly that nobody needs help or has a complaint or anything. STATS has done a fantastic job in baseball and football will be even better.

I agree with Tom, that the NFL will save its own neck with a full season but it could be at the expense of fantasy football. There is absolutely NO movement on the negotiations and it's hard to see any reason to figure this out until training camps get closer. They need to get this done before Aug. 1st to save the live-events season and there's no guarantee that will happen. But we'll hold out hope and see what happens. It's just amazing that we're even in this position as fans.

We're not changing the NFFC playoff format, but it's good to hear that from our customers.

Glenneration X · Post by **Glenneration X** » Mon May 09, 2011 8:15 am

Originally posted by Greg Ambrosius:
[QUOTE]Originally posted by Old School:
[qb] As Tom said, we did it in baseball and things couldn't be going smoother. After last year, it's amazing to go to bed each night without a single email request or wake up in the morning without a single email request from our baseball users. Everything is just working so smoothly that nobody needs help or has a complaint or anything. STATS has done a fantastic job in baseball and football will be even better.
Now that I think of it, you're right Greg. I haven't E-mailed you or Tom nearly enough this season. All this beauty sleep must be playing havoc on your systems.

In all seriousness, baseball has been night and day this year when compared to last. Keep up the good work and looking forward to football with you guys for my third straight year this season (yes, if those greedy owners & players will cooperate already).

Greg Ambrosius · Post by **Greg Ambrosius** » Wed Jun 01, 2011 7:55 am

I know it's not my place to bring this up, but I can tell it's affecting a lot of our customers this off-season and thus it affects our business. It's eerily quiet over on the WCOFF boards these days as customers patiently give Dustin his 30-45 days to announce his new "transaction." A lot of lives are hanging in the balance and I'm surprised that someone over there isn't giving some kind of update. Any news is better than dead silence.

I hope for everyone's sake that a "transaction" does happen in the next nine days as promised. Someone has stated that it's been 36 days since Dustin's promise, but no update has been given. I know that in any sale it takes a lot of time and lawyers tell you what you can and can't say, but it still seems odd that if there's to be a positive resolution that some type of "heads up" post or encouraging words haven't been spoken over there. I'd love to see Dustin enlighten his players and the whole industry with an update. After all, if good news is to come then a good update will keep everyone excited about the upcoming season.

I guess I bring this up because over the last two weeks I've called a lot of our top players and several of them have said they really can't commit to anything in 2011 until they know if they are going to get their WCOFF winnings first. There are folks who are owed thousands of dollars, some even tens of thousands and one more than $100,000 who also play in our events. It's unsettling to know if they'll have their prize money from that contest to "reinvest" in other contests in 2011, including ours. Again, I hope that everything works out over there and that everyone is paid in full so that they can plan accordingly where they want to play in 2011. All of the contests can compete against each other fairly, but we all need our customers paid in full first before any of that money comes back in new entries.

For the players' sake, I hope an update comes soon. I also hope the lockout ends soon. I don't know if either will happen, but both are affecting our fine industry and neither should be happening at all.

Tom Kessenich · Post by **Tom Kessenich** » Wed Jun 01, 2011 7:59 am

Didn't the original statement say "30 to 45 days?" If so, I'm sure everyone - especially those waiting for 2010 prize winnings - would have liked to have received some update the 30-day mark. It really is unfortunate that the only update the industry (and this is an industry issue) is receiving is silence.

BillyWaz · Post by **BillyWaz** » Wed Jun 01, 2011 9:58 am

I think the biggest crime isn't that they aren't talking, but it is the fact that they are TAKING SIGNUPS FOR SATELLITES as Dustin stated "All monies collected for online satellite leagues during this transition are being held separate". Are you f-ing kidding me????? Who in their right mind would be paying them ANY money right now, and how can they in good conscience take ANYONE'S money????

So they can TAKE money, but cannot give any reasons as to why they can't give people what they have rightfully earned.

Nice business model..........Total B.S.

Tom Kessenich · Post by **Tom Kessenich** » Wed Jun 01, 2011 10:03 am

Billy, outside of a few fantasy sports message boards I'm not sure how many people are aware that many 2010 prize winners have not been paid. It's typically a small percentage of players who are active on message boards. I'm not sure enough attention has been brought to what is arguably the most disturbing development in our industry outside of the NFL lockout. As Greg and I have said many times, it doesn't do any of us in this space any good if a competitor defaults on paying or endures significant issues in terms of making the prize payouts. It hurts all of us because the more this occurs the less likely people are to trust anyone, regardless of history.

That's why this is such a pressing issue and why I think more attention needs to be put on what is happening. It's not just WCOFF going through issues either. Rapid Draft hasn't paid its $100,000 prize winner either. These are serious concerns and the consequences are being felt by everyone, not just those particular events or games.

[ June 01, 2011, 04:05 PM: Message edited by: Tom Kessenich ]

DoubleG · Post by **DoubleG** » Thu Jun 02, 2011 4:46 am

Originally posted by BillyWaz:
I think the biggest crime isn't that they aren't talking, but it is the fact that they are TAKING SIGNUPS FOR SATELLITES as Dustin stated "All monies collected for online satellite leagues during this transition are being held separate". Are you f-ing kidding me????? Who in their right mind would be paying them ANY money right now, and how can they in good conscience take ANYONE'S money????

So they can TAKE money, but cannot give any reasons as to why they can't give people what they have rightfully earned.

Nice business model..........Total B.S. two questions:

1. do you think the baseball money they took in a few months ago is "set aside" or did it go in the general operating budget and was used to pay out 2010 football winners?

2. do you think the money that some owners "rolled over" is still available (if owners wanted to withdraw it) or was that used to pay out 2010 football winners?

Greg Ambrosius · Post by **Greg Ambrosius** » Thu Jun 02, 2011 5:42 am

Originally posted by DoubleG:
quote:Originally posted by BillyWaz:
I think the biggest crime isn't that they aren't talking, but it is the fact that they are TAKING SIGNUPS FOR SATELLITES as Dustin stated "All monies collected for online satellite leagues during this transition are being held separate". Are you f-ing kidding me????? Who in their right mind would be paying them ANY money right now, and how can they in good conscience take ANYONE'S money????

So they can TAKE money, but cannot give any reasons as to why they can't give people what they have rightfully earned.

Nice business model..........Total B.S. two questions:

1. do you think the baseball money they took in a few months ago is "set aside" or did it go in the general operating budget and was used to pay out 2010 football winners?

2. do you think the money that some owners "rolled over" is still available (if owners wanted to withdraw it) or was that used to pay out 2010 football winners? [/QUOTE]All of the questions being asked here and on the WCOFF message boards and other industry sites should be answered by Dustin. I've been involved in two sales in the last 22 months and at no point did any of the lawyers involved tell us to stop talking and ruin our business in the process. On the contrary, they told us to run our business as usual and to be ready when the sale was done. If a sale is indeed close to fruition there, no lawyer would get in the way of keeping your business whole. It's crazy to think that Chad can't get a clearer picture of where his prize money is because lawyers won't let someone talk. Almost unfathomable.

Good news is on the horizon for the NFL lockout situation. Owners and players aren't going to walk away from this $9.3 billion a year industry. They're going to find a middle ground and save the season. Now fantasy owners need their winnings sent to them immediately so that they can plan for the upcoming season too. I think I know where many of those players will be playing in 2011 if given the option with their winnings. It's time to end this mystery and pay the winners. Time to talk Dustin and tell the truth here so that everyone can move on.

Greg Ambrosius · Post by **Greg Ambrosius** » Mon Jun 06, 2011 2:52 am

I usually don't respond to posts on other message boards, but I think this time I have to. I respect Mike Nazarek who runs an industry business and is a long-time member of the WCOFF and so when he posts this on the WCOFF boards it's troubling:

"does the problems the WCOFF has had spell the end of high stakes fantasy football?

i have to wonder, will people trust any of the places that sport the high payouts? to be honest, i am scared that if the WCOFF eventually folds that this will cause all of the others to fold as well.

could this be most people's last straw?"

It is a good question, but there's also a good answer. No, whatever happens to WCOFF will not end the high-stakes portion of our industry. However, it will change it for a lot of people, mainly the people affected by the non-payments if that's the end result. Again, let's all hope that WCOFF pays off their winners because we are talking about hundreds of thousands of dollars here both in cash winnings and rollovers into 2011 accounts. There are a lot of people who will be affected by whatever happens here. For those people, it could be the beginning of the end and who could blame them? Nobody.

But as for the business side of things, the industry will continue to move forward. Take it from me, you can make a living running reputable games in this space. The margins are low and the competition is tough, but it's really not that tough to create a business plan where revenues top prize payouts and expenses, with enough still left over for profits. You can do that in baseball, football, basketball and the other sports with a conservative business plan. However, you can't do that with bad business plans. Then the expenses are greater than the revenues and something has to give, most likely the amount of prize money available.

This is definitely a critical time for this space. There are fewer than 1,500 unique players in this space at $1,400+ and if several hundred get turned off by yet another company not paying off their prize winners it will affect all of us. We all hope that doesn't happen here and that Dustin pays off everyone by Friday as he promised. We're certainly hoping for that. But going forward there is enough of a customer base for the companies who do have the financial backing behind them to guarantee all prize payouts, who do have unique contests that customers like, who do have great technology running those games, and who do provide first class customer service. There is room in this space for well run games and enough customers to support them.

But there is no doubt that this area of the industry is now changed forever. Customers have been burned by AFFL, Fantasy Jungle, FFOC and now WCOFF, even if they do pay, during the last five years. The delay and the lack of response by the WCOFF has caused enough anxiety to those customers that they will feel stung either way. Now they just want their money and they may leave this space even with their money. It's tough for those people to trust anyone including those of us who do pay on time. But I also think these are competitive players who just want a good contest that guarantees their prizes and I think they still want the experience of a live draft in a fun city at a perfect time of the season with other die-hard fantasy players like themselves. So I'm not so sure everyone will leave the space for good if there are better alternatives out there.

Time will tell. It's important that every WCOFF winner gets paid in full. If not, the damage will be severe, for the high-stakes industry and honestly the entire fantasy football industry. Everyone in this industry should be concerned about this one. Again, let's hope Dustin comes through on Friday and we can all move forward without major damage. But at the end of the day, the high-stakes market will survive if customers trust those contests who have proven track records and the financial backing to always guarantee their prizes. With other contests who enter this space going forward, if it looks too good to be true it probably is.