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

DoubleG · Post by **DoubleG** » Mon Jun 06, 2011 3:28 pm

WCOFF taking a lot of heat on their boards. Starting to get ugly. For management to remain silent (without even a peep of an update), is very ominous.

What will Friday's deadline bring?

*Another stall tactic, such as "Payments are beginning to be processed. Please allow 30-45 days for payments to be sent and received"

OR

*"We are bankrupt" announcement

THIS SUCKS FOR EVERY SINGLE PERSON OWNED MONEY. I hope everyone gets paid, one way or another.

Erok · Post by **Erok** » Mon Jun 06, 2011 4:28 pm

Greg & Tom--

Obviously the lockout is a MAJOR concern to almost all players. They want to be assured there is a season before agreeing to anything. To be honest, I havent even put on the NFL network, Sirius, etc.....since the Superbowl ended nor do I care to until the lockout ends. So the interest simply isnt there yet for most.

Secondly you have the WCOFF situation. If people don't get paid from there after AFFL, Fantasy Jungle, etc, that would be a crushing blow to the industry and Im not sure if it would recover. If people cant count on getting paid from an industy leader, then........??????????

Its a tough time for all of us serious fantasy players. Normally this month I'd kick off my research by sitting in Starbucks taking notes from about 10 different fantasy magazines. Kind of made it my routine the last two summers and now I will not get to do that this year. Hell we dont even know where the free agents are going yet!

Anyways, I am still optimistic on this year, but July 4th is my deadline for how many teams I will be drafting this year. If a deal is done by then a normal tc, preseason, and season can be played. If no deal is struck by then now modifications must be made which IMO will lead to rushed meetings, practices, sloppy play, pore preparation, and many more injuries once play is resumed and a deal struck. There will be much much more luck involved in FFB this year if this lockout lingers on significantly past July 4th.

Let's just hope a deal is in place by the end of June and that everyone from WCOFF gets paid soon!

--Erik

Greg Ambrosius · Post by **Greg Ambrosius** » Tue Jun 07, 2011 2:29 am

Erik,

We hear ya. As you can tell, I'm doing everything I can to find out news and nuggets about football for folks like you who aren't trying to pay attention so that hopefully you pay attention via my posts!!

I don't want people to walk away from football this year, but unfortunately the owners and players aren't as concerned about that as I am. They believe we'll be back in full force no matter when they get this deal done, but that's not necessarily true for everyone.

I'll look at your scenario a different way. If they can get an agreement by early July and save training camps, you'll have a more expedited time frame for free agent signings and it will actually make your job easier. You won't need 10 magazines for research. You'll go online for the latest updates and see every signing each day as they happen. I think everyone will be more informed this year because of the free agent signings happening over just a few weeks time.

As for the play on the field, I trust it will be a little sloppy without all of the off-season conditioning and preparation, but you never know. Every year there are a lot of injuries and this year will be more of the same with or without off-season programs. Teams with new QBs will definitely be affected by the lockout and rookies will definitely be behind because of the lockout. It will also be tough for undrafted rookies to break through this year; heck, almost impossible at this point.

So yes, a lot has changed. But for all of us, let's hope for a settlement before training camps and if full camps can be run a good season is still ahead of us. Hang in there and don't throw in the towel just yet. We had a FANTASTIC 2010 season and 2011 can still be even better if these goofballs get a labor agreement done soon.

As for the WCOFF, we ALL hope for payment soon to players. Nothing more needs to be said than the players deserve the winnings they earned from a contest that took in over $2.5 million in signups last year. There's no excuse for still owing hundreds of thousands of dollars to winners at this point. Management should be forthcoming on the immediate plan for prizes and anything after that isn't the concern of those winners. They need to know RIGHT NOW what is going on with last year's prize money and no lawyer in the world would prevent that from happening. It's time for some honest news from Dustin to the players.

We are not shying away from this season. We expect a great, great turnout from our die-hard players and the 2011 NFL season wouldn't be as much fun without watching your fantasy players leading you to a league title and a shot at $100,000. I know how everyone feels today, but Draft Day is still going to be a BLAST and the NFFC season is going to be exciting and full of wild moments. Don't give up on all of that just yet. Hang in there and hopefully all good resolutions will be coming soon.

See ya on Draft Day!!!

Greg Ambrosius · Post by **Greg Ambrosius** » Tue Jun 07, 2011 4:48 am

Originally posted by DoubleG:
WCOFF taking a lot of heat on their boards. Starting to get ugly. For management to remain silent (without even a peep of an update), is very ominous.

What will Friday's deadline bring?

*Another stall tactic, such as "Payments are beginning to be processed. Please allow 30-45 days for payments to be sent and received"

OR

*"We are bankrupt" announcement

THIS SUCKS FOR EVERY SINGLE PERSON OWNED MONEY. I hope everyone gets paid, one way or another. Somebody please tell the gambler on that WCOFF thread that we are all concerned with the WCOFF not paying their winners to this point, but that not all contests should be lumped in with the WCOFF. You can make money in this space if your business is set up right and your customers can get paid on time every time if the company running that contest is well organized. The pay-to-play model and the high-stakes model isn't going away no matter what happens to WCOFF.

Think about how far this space has come in less than 10 years. Lenny and Emil started the WCOFF in 2002 and got 552 teams to compete that year at $1,250 each. They likely generated $750,000+ in revenue that first year and had expenses that were more than total revenue. Still, within two years, the NFBC and NFFC had entered the space and combined with WCOFF total revenue had grown to almost $2 million. Both of our companies were profitable by 2005 and growth continued with more and more competitors entering the space each year. Last year total revenue in the high-stakes fantasy sports market topped $7 million from just the three main contests. There's not a faster growing area of the pay model in fantasy sports than high-stakes.

Unfortunately, where there's rapid growth there's often problems. Many companies have tried to strike it rich quickly in this space and that's why you're seeing bad business plans falling apart. I'm not sure FFOC was the right model with the right prize structure at the right time. I'm not sure Rapid Draft ever had the following to guarantee a $100,000 grand prize. I'm not sure Fantasy Jungle or AFFL ever could have reigned in expenses enough to grow the way they wanted to. I'm not sure WCOFF could continue to guarantee a $300,000 grand prize and a baseball plan that admittedly loses a lot of money each year without some consequences. That being said, all prize money should have been set aside by all of these owners to make sure the first bill being paid was prize money. But of course that didn't happen and now we're asking if this space should just go away.

The answer is an emphatic NO. If WCOFF's winners don't get paid there will be a LOT of people affected and that will definitely hurt the landscape. Newbies may not trust this space at all and rightfully so. But there are reputable companies with good track records still left and consumers will have to do their due diligence to make sure they never get taken again. I know, there are never any guarantees of that happening for consumers, but consumers must know the owners and the contests they are playing with inside and out before committing to any game going forward.

I think our track record in baseball, football and basketball since 2004 speaks for itself, but having a major company backing our games in STATS speaks volumes as well. We are not privately funded by me and Tom; we are owned and operated by a major national company. We're set up for the long haul and our expenses are minimized by owning our own stats, draft software and back-end software. We'll be around for a long, long time and I trust we'll have competition in each sport for a long time. Whether that includes WCOFF or not depends on Dustin's announcement soon.

It's not a fun time right now Gambler, but this space has proven to be successful for operators and players alike for 10 years now thanks to the vision Lenny and Emil had in 2002. They saw what consumers wanted and delivered the best product they could. I admire everything they did during those early years. Now let's hope their "baby" doesn't hurt the industry right now. But either way, the contests will go on and consumers will gain trust in those competitors who have learned from the past mistakes. The show will go on.

Tom Kessenich · Post by **Tom Kessenich** » Tue Jun 07, 2011 4:53 am

Originally posted by Greg Ambrosius:
But there are reputable companies with good track records still left and consumers will have to do their due diligence to make sure they never get taken again. I know, there are never any guarantees of that happening for consumers, but consumers must know the owners and the contests they are playing with inside and out before committing to any game going forward.

[The linked thread below should be required reading for everyone looking to either continue playing in the high-stakes arena or looking to join it for the first time:

http://nffcboards.stats.com/cgi-bin/ult ... 1;t=006385

King of Queens · Post by **King of Queens** » Tue Jun 07, 2011 6:18 am

Going forward, every customer should do the following before entering ANY high-stakes fantasy contest:

1) Perform due diligence on the contest and look for any warning signs. Read the rules thoroughly, and know the positives and negatives of each contest.

2) Research and understand the exact ownership structure of the contest. Sometimes the "face" of the contest isn't the person actually calling the shots.

3) Use common sense. Greg has mentioned this several times, but it bears repeating (with added emphasis):

IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS

Tom Kessenich · Post by **Tom Kessenich** » Tue Jun 07, 2011 7:09 am

All good points Glenn. As Greg has said, the high-stakes area of our industry has been booming and prospering in terms of participation. Intelligent business plans will enable the area to continue to grow as customers play in games they enjoy and the owners of these events continue to generate positive revenue. It's when events begin or stray from having intelligent business models that things tend to run into trouble. As you said, it's up to the customer to educate themselves on the games.

We are in a great position with STATS to ensure continued prize payouts for all of our events (NFBC, NFFC and NFBBC) going forward and as the industry moves forward this will become even more critical in the decision-making process. It's always been very important obviously but the more information consumers have to make their decisions, the better educated their choices will be and they'll be able to continue enjoying this great hobby with companies that will enable them to rest comfortably with the knowledge whatever prizes they win will be paid without issue.

[ June 07, 2011, 01:11 PM: Message edited by: Tom Kessenich ]

BillyWaz · Post by **BillyWaz** » Tue Jun 07, 2011 7:34 am

What Gambler doesn't get (and I can't post on WCOFF at work, but NFFC is fine!

) is that both the NFFC and FFPC have the COMMON SENSE to lower their prize structure if they don't get the required numbers.

As you know Greg, in 2004 the NFFC advertised a $200,000 grand prize. When it was obvious that you weren't going to hit that mark, you lowered it to $100,000 and still took a small loss.

FFPC is doing the same, as they have a right to lower their $200,000 grand prize by July 1st if they feel they won't hit their numbers.

That is just SMART business, and people appreciate honesty. It doesn't matter if it is their dentist, mechanic, waitress, etc. if someone is honest, then they can be trusted.

KNOWING you are going to fall well short of paying people and HOPING the money tree in the back yard will grow in time is BAD business.

I feel bad for the football owners who have yet to get paid, but feel just as bad for those currently playing baseball, because unless they are somehow acquiring a lot of extra funds, those people are most likely going to be in the same boat come October.

Take it from someone who has been hosed by Fantasy Jungle and AFFL.....it is FAR worse to win money and never receive it than to have a bad season and move on.

DoubleG · Post by **DoubleG** » Tue Jun 07, 2011 7:49 am

If a HSFF contest was using a ponzi-type business model, what are some warning signs we would expect to see…

*Prize payouts > money being taken in
*Provide incentives for customers to “prepay” for the upcoming season (only if the prepayment date is prior to the date they need to issue prize checks to last year’s winners)
*Delay payments as much as possible
*Allow customers to “roll over” money
*Allow customers to win “credits”
*Provide non-committal answers to questions posed on message board

Have you noticed any of these as it pertains to HSFF contests?

Greg Ambrosius · Post by **Greg Ambrosius** » Tue Jun 07, 2011 8:02 am

Originally posted by BillyWaz:
What Gambler doesn't get (and I can't post on WCOFF at work, but NFFC is fine!

) is that both the NFFC and FFPC have the COMMON SENSE to lower their prize structure if they don't get the required numbers.

As you know Greg, in 2004 the NFFC advertised a $200,000 grand prize. When it was obvious that you weren't going to hit that mark, you lowered it to $100,000 and still took a small loss.

FFPC is doing the same, as they have a right to lower their $200,000 grand prize by July 1st if they feel they won't hit their numbers.

That is just SMART business, and people appreciate honesty. It doesn't matter if it is their dentist, mechanic, waitress, etc. if someone is honest, then they can be trusted.

KNOWING you are going to fall well short of paying people and HOPING the money tree in the back yard will grow in time is BAD business.

I feel bad for the football owners who have yet to get paid, but feel just as bad for those currently playing baseball, because unless they are somehow acquiring a lot of extra funds, those people are most likely going to be in the same boat come October.

Take it from someone who has been hosed by Fantasy Jungle and AFFL.....it is FAR worse to win money and never receive it than to have a bad season and move on. The Anti-Internet Gambling bill has fantasy carveout language that is very specific in how you can run a legal fantasy sports game. You MUST advertise your grand prize and stick to it. If you decide to change your grand prize, you need to offer a refund to your customers and have them agree to the new prize pool. Simple enough and fair for everyone, right?

What we did in 2004 was come out with a plan that advertised a $200,000 grand prize and 600 teams. I felt we could compete with WCOFF in a 14-team format and BOY WAS I WRONG!!! Two weeks before Draft Day we were sitting with 166 paid teams and I knew I had to make the tough decision of cancelling our event and offering a prize pool with the same league prizes, same overall prizes, but one grand prize $100,000 less. It was the right thing to do and all of our customers understood what we were doing. We lost two teams who asked for their money back and finished with 224 teams on a plan based on 350 teams. Yes, we lost money that year, but we lived for another day and broke even in 2005 and continued to make money every year after that.

The FFPC can certainly change their prize pool in July like we did, but it appears that the $200,000 carrot has been put out there for a reason. I think it's a direct call to WCOFF owners and I'd be surprised at this point if they pulled it back. But you are right, smart decisions have to be made by all of us during this lockout.

We all know that TRUST is key in this area of the industry. Some people lost trust in us when we were acquired by Fanball and it was impossible to change their minds. We hope we have that trust back now that we're part of the STATS team and I don't plan on ever losing that trust again. There's little room for error in this space and absolutely NO ROOM FOR ERROR when it comes to people's money.

It's time for honest answers and some direction from the management team at WCOFF. There's no reason to wait until Friday to give some hint of what is coming for those players owed money. Give them the lifeline now if there is one.

[ June 07, 2011, 02:05 PM: Message edited by: Greg Ambrosius ]