Thoughts On ESPN's Outside The Lines Show On WCOFF

Tom Kessenich · Post by **Tom Kessenich** » Sun Dec 18, 2011 3:27 am

Originally posted by wiljiro2:

Doesn't add up - an 800K bridge loan - Where is that money??? - I don't care how many cute girls in ref outfits you hire, you can't "Overspend" to the tune of 3/4 of a million dollars in 3 years You can when you create completely unnecessary massive expenses. Randy Moss didn't come cheap last year, for example. Their baseball model was doomed from the start and they ran that for two years. In my opinion, that decision was what ultimately killed WCOFF. Had they not decided to try and challenge our baseball event with such a massively flawed plan that was doomed to fail, I think the football event would still be here and a lot more people (and perhaps everyone) would have been paid.

In my opinion, the combination of ridiculous expenses for football and the decision to create a flawed baseball event is what killed WCOFF.

[ December 18, 2011, 09:30 AM: Message edited by: Tom Kessenich ]

Tom Kessenich · Post by **Tom Kessenich** » Sun Dec 18, 2011 3:29 am

Originally posted by Greg Ambrosius:

So Tim Peters said they had over $3 million in revenue, which is factual. He said they were going to use baseball money to pay off football prizes, which is sad in itself. I'm not sure what's sadder - the fact they admitted it was a Ponzi Scheme or the fact someone thought this was a good idea to begin with.

Glenneration X · Post by **Glenneration X** » Sun Dec 18, 2011 3:30 am

Honestly, I think ESPN did a favor for the NFFC and FFPC by not mentioning them. Anyone who's in the know regarding High Stakes is aware of the NFFC and FFPC's stellar reputations. Anyone who is unfamiliar with High Stakes likely left that piece wary of High Stakes in general after the mention of being unregulated and at the mercy of the good will of the contest providers. If mentioned, there may have been guilt by association in the minds of the uninformed.

Shrink Attack · Post by **Shrink Attack** » Sun Dec 18, 2011 3:32 am

The players are unsecured creditors. The secured creditors get paid first, period. And the secured creditors say they are owed millions.

Since there appears to be little to no money available, it seems that the players chances of getting paid are essentially zero. That's just hypothetical on my part...Chad and others would know the facts, which I admittedly do not.

But it almost seems at this point that players paying lawyer fees on this situation are likely throwing good money after bad, unless the lawyers are working on contingency.

Glenneration X · Post by **Glenneration X** » Sun Dec 18, 2011 3:43 am

Originally posted by Tom Kessenich:
quote:Originally posted by wiljiro2:

Doesn't add up - an 800K bridge loan - Where is that money??? - I don't care how many cute girls in ref outfits you hire, you can't "Overspend" to the tune of 3/4 of a million dollars in 3 years You can when you create completely unnecessary massive expenses. Randy Moss didn't come cheap last year, for example. Their baseball model was doomed from the start and they ran that for two years. In my opinion, that decision was what ultimately killed WCOFF. Had they not decided to try and challenge our baseball event with such a massively flawed plan that was doomed to fail, I think the football event would still be here and a lot more people (and perhaps everyone) would have been paid.

In my opinion, the combination of ridiculous expenses for football and the decision to create a flawed baseball event is what killed WCOFF. [/QUOTE]Tom, I'm sorry but at the moment I have to believe it's more than just bad business decisions that's brought us here. At this point, let's just call a spade a spade. They must have stolen the money. It's simple math.

They brought in $3 million in revenue a year. They paid nowhere near that. The costs of the TV shows, celebrity drafts, even the baseball losses would not have created the shortfall that now exists.

Also, what of the Lakeside loan? $800K that was supposed to go directly to the players owed. A very small fraction of that actually went out. What of the 2011 baseball and football registrations? Where is that money? What bad business decisions took place since all that money was taken in that emptied those accounts?

If I were the Missouri AG, I would start checking mattresses.

Tom Kessenich · Post by **Tom Kessenich** » Sun Dec 18, 2011 3:50 am

Originally posted by Glenneration X:
quote:Originally posted by Tom Kessenich:
quote:Originally posted by wiljiro2:

Doesn't add up - an 800K bridge loan - Where is that money??? - I don't care how many cute girls in ref outfits you hire, you can't "Overspend" to the tune of 3/4 of a million dollars in 3 years You can when you create completely unnecessary massive expenses. Randy Moss didn't come cheap last year, for example. Their baseball model was doomed from the start and they ran that for two years. In my opinion, that decision was what ultimately killed WCOFF. Had they not decided to try and challenge our baseball event with such a massively flawed plan that was doomed to fail, I think the football event would still be here and a lot more people (and perhaps everyone) would have been paid.

In my opinion, the combination of ridiculous expenses for football and the decision to create a flawed baseball event is what killed WCOFF. [/QUOTE]Tom, I'm sorry but at the moment I have to believe it's more than just bad business decisions that's brought us here. At this point, let's just call a spade a spade. They must have stolen the money. It's simple math.

They brought in $3 million in revenue a year. They paid nowhere near that. The costs of the TV shows, celebrity drafts, even the baseball losses would not have created the shortfall that now exists.

Also, what of the Lakeside loan? $800K that was supposed to go directly to the players owed. A very small fraction of that actually went out. What of the 2011 baseball and football registrations? Where is that money? What bad business decisions took place since all that money was taken in that emptied those accounts?

If I were the Missouri AG, I would start checking mattresses. [/QUOTE]I don't disagree with anything you said, Glenn. I do believe, though, that if Dustin had managed the expenses more intelligently and not pursued us with a doomed to fail baseball event, WCOFF would still be here.

Those of us who run these events (and many of you as players too) know what the margins are. You can be successful and profitable if you proceed intelligently. Greg and I played in WCOFF the first year after Lenny and Emil sold the event and I was shocked at the overspending in expenses that I saw. And that's just what I witnessed without having any knowledge of what may have gone on behind the scenes. But even then it was clear to me that there were expenses at hand that were completely and totally unnecessary. Over time, those expenses grew in a wide variety of ways and I personally believe what proved to be the final nail in the coffin was their baseball event.

I'm fine with the label you're placing on all of them because at the end of the day the unpaid prize winners have had money stolen from them. I just believe with more sound management all of this could have been easily avoided.

wiljiro2 · Post by **wiljiro2** » Sun Dec 18, 2011 3:51 am

I am about to make what might be a very dumb observation - Please don't hold it against me - and feel free to slam it -

What exactly would be wrong with Government Regulation in High Stakes Fantasy Sports?

Hear me out -

- In Online Poker you start with X amount of money and can win Y - The Y is unknown - it's INFINITE

- You are playing a game on a computer where cards are being dealt - You are playing against people you don't know - and can not see their cards - It would be easy for a Poker site to "Cheat" -

That industry DEMANDS some kind of regulation - Yes it can be policed by the players, but it requires an ENORMOUS amount of trust on the part of the players toward the site -

IN HSFF - The amount we put up is again X, but in this case the Y is KNOWN - we know exactly how much we can potentially win, going into the season - keeping tabs on an escrow account to make certain that amount is available is easy -

Also, the game itself is "cheat proof" - You can't mysteriously add points to Wes Welker's score on a Tuesday after the fact - The plays are right in front of us - There are no trades, so collusion is not possible, or very difficult to pull off - The email addresses and contact information of all the players in our league are readily available - It's rather transparent -

So I re-ask the question - Why would Government Regulation be such a bad thing? It would be rather easy to stay above board -

Ok - blast away -

Thanks, Wiljiro

Greg Ambrosius · Post by **Greg Ambrosius** » Sun Dec 18, 2011 3:52 am

Originally posted by Glenneration X:
quote:Originally posted by Tom Kessenich:
quote:Originally posted by wiljiro2:

Doesn't add up - an 800K bridge loan - Where is that money??? - I don't care how many cute girls in ref outfits you hire, you can't "Overspend" to the tune of 3/4 of a million dollars in 3 years You can when you create completely unnecessary massive expenses. Randy Moss didn't come cheap last year, for example. Their baseball model was doomed from the start and they ran that for two years. In my opinion, that decision was what ultimately killed WCOFF. Had they not decided to try and challenge our baseball event with such a massively flawed plan that was doomed to fail, I think the football event would still be here and a lot more people (and perhaps everyone) would have been paid.

In my opinion, the combination of ridiculous expenses for football and the decision to create a flawed baseball event is what killed WCOFF. [/QUOTE]Tom, I'm sorry but at the moment I have to believe it's more than just bad business decisions that's brought us here. At this point, let's just call a spade a spade. They must have stolen the money. It's simple math.

They brought in $3 million in revenue a year. They paid nowhere near that. The costs of the TV shows, celebrity drafts, even the baseball losses would not have created the shortfall that now exists.

Also, what of the Lakeside loan? $800K that was supposed to go directly to the players owed. A very small fraction of that actually went out. What of the 2011 baseball and football registrations? Where is that money? What bad business decisions took place since all that money was taken in that emptied those accounts?

If I were the Missouri AG, I would start checking mattresses. [/QUOTE]This is the one I don't understand Glenn. It's possible that the Lakeside loan paid off some of the winners in March, including Chad's WCOFB grand prize, part of Tony's prize and a few other big prizes. But if that loan is on top of the $1 million plus in prizes still owed then this financial hole is even deeper than I thought. Then this is over $2 million involving prizes, plus as Peter Pinto is saying the $2.5+ million in buying the WCOFF, plus money put into the business for losses from 2007-2011. You're looking at $4-$5 million in losses from a business that before it was sold did just over $2 million in revenue and probably made 10-15% in profit. Just amazing how this could turn so badly in such a short time by very, very, very bad business decisions.

I believe Dustin has to provide a Schedule with a listing of creditors and what they are owed along with assets. I don't believe he has done that yet. That should be pretty revealing if/when that is done. Does anyone know when they have to do that or if I'm correct in that he has to do that?

DoubleG · Post by **DoubleG** » Sun Dec 18, 2011 3:53 am

Originally posted by Shrink Attack:
The players are unsecured creditors. The secured creditors get paid first, period. And the secured creditors say they are owed millions.
This reminds me of something Mr Denninger said recently about the MF Global situation...

"Recently Bank of America transferred a bunch of derivatives into their banking arm. "A bunch" means somewhere around $80 trillion worth.

Part of the bankruptcy "reform" law in 2005 placed derivative claims in front of depositors in a business failure - including a bank failure.

What JP Morgan is claiming in the MF Global case is that the derivative trade is entitled to preference in the case of MF Global over those who had cash there for safekeeping either as a margin deposit or just as free cash as you would hold free cash in a bank.

If a major bank blows up this very same claim, supported in existing Bankruptcy Law with the changes signed by George Bush in 2005, will be used to steal the entirety of your bank account!"

The older I get, the more I believe "screw everyone you can" IS a business model for many companies. Unsecured creditors (common man or woman) will always lose out...

[ December 18, 2011, 09:53 AM: Message edited by: DoubleG ]

Glenneration X · Post by **Glenneration X** » Sun Dec 18, 2011 3:58 am

Originally posted by wiljiro2:
So I re-ask the question - Why would Government Regulation be such a bad thing? It would be rather easy to stay above board -
Everyone hates government regulation because whenever the government gets involved in anything, the bureacracy, politics, and ineptitude of government muddles everything.

However in theory, there should be nothing wrong with it for the players. We are required to file for anything we win as it is now and there are no fool-proof current protections in place for the players outside of our own due diligence and as mentioned earlier, the good will of the contest providers.

[ December 18, 2011, 09:58 AM: Message edited by: Glenneration X ]