Introduction
In Part 5 of this article series, we discussed the qualities you should seek in a fantasy football commissioner. In this article, we will cover various options for generating fantasy football league revenue. Most fantasy football leagues offer some type of awards (either monetary or otherwise) to the best teams each year. In order to finance these yearly awards, you’ll need to find a way to raise a few bucks.
No single form of fund raising works for all fantasy leagues, but there are few standard practices that are well-accepted in the fantasy football community. These are tried and true systems for revenue generation and we’re certain that one of more of these methods will help you raise the desired funds to finance your league prizes.
Entry-Fees
One-time league entry-fees are far and away the best method for generating fantasy football league revenue. Most owners favor this method because it is a definite, known amount that they can plan for. Commissioners also favor this method because it requires the least amount of effort as he only has to collect one lump-sum payment from each fantasy owner.
The league entry fee can be any value, but most serious leagues charge at least $100 per team. I think this is a reasonable entry fee when you consider that this includes 16 weeks of fun-filled fantasy football enjoyment. Most commissioners do not pocket any of the entry fees (they should be running the league out of the goodness of their heart) and the funds are generally used to pay for league hosting and/or any prizes to be awarded at the end of the fantasy season.
In addition to being the most manageable system for generating league revenue, entry fees also help to eliminate unreliable fantasy owner prospects. If someone is unwilling to front $100 for the entire fantasy season, then chances are they're not interested enough to stay involved for the entire fantasy season. The more money you charge for a league entry fee, the greater chances you have for eliminating disinterested prospects, but be careful because you also don't want to make the league unaffordable for those who are generally interested.
Yet another plus for entry-fees is that they encourage league participation throughout the entire fantasy football season. By collecting money at the beginning of the season, there is an available prize pool starting at week 1. One of the things we’ll discuss in a later installment is the idea of awarding weekly cash prizes to the team with the highest point total. The idea of winning a weekly cash prize helps to ensure that all teams will remain engaged throughout the entire NFL season, even if they have been eliminated from the fantasy playoffs.
There is a natural tendency for owners to slack-off if they know they have no chance at playing for the championship. In the worst-case scenario, this could lead to their opponents getting an easy victory late in the season (a situation which would not be fair to other teams vying for a playoff spot). By awarding a weekly prize during each week of the regular season, you will encourage all teams to remain active and put their best foot forward. This will have the desired, secondary effect of ensuring that the competition remains high throughout the entire fantasy season.
Transaction-Based Fees
Some leagues implement a fund-raising system whereby fees are accrued based on user-initiated transactions such as waiver-wire pick-ups or player trades. For instance, a league may attach a $0.25 fee for each player that is pulled from the waiver-wire and/or attach a $5.00 fee to any team that participates in a player trade. These types of fees are designed to build up the cash prize awarded to the playoffs teams and league champion. While these may seem like small, insignificant charges, over the course of an entire fantasy season they can result in a very sizable pot.
I generally advise against transaction-based fees unless your league is well-established and everyone is in favor of this type of system. Collecting entry fees from participants before the season begins can be nerve-wracking in itself, even in a well-run league. However, collecting transaction-based fees at the end of a season (you generally have no other choice in this type of system since transactions occur throughout the season) is nearly impossible. The last thing you want as fantasy commissioner is to chase people around after the season has ended for money in order to pay out the league prizes. To avoid finding yourself in this precarious position, charge a fair but sizable entry-fee at the beginning of the season and avoid transaction-based fees. The end-result is largely the same and you can focus your attention on running the league and not chasing people around for money.
Passive Administration
Even in leagues where the members know each other well, many commissioners frequently have problems collecting league entry fees in a reasonable amount of time. However, there is a well-tested strategy for addressing late payment that will encourage people to pay in a timely manner: Instead of establishing a payment deadline for league-entry fees (normally Week 1 of the fantasy season), allow your owners to pay at their leisure, as long as payment is made before the league playoffs began. The catch is that any weekly prize won by an owner who has not paid their entry-fee is forfeited by that owner and added to the pot for the league champion. This accomplishes several goals:
* It punishes the delinquent owner for paying late (i.e. he gives up a weekly prize that otherwise would have been his) and hopefully serves as motivation pay as soon as possible.
* The commissioner can focus on administering the league and not chasing people around for money.
* It allows teams to pay their league fee at their leisure and 4 months is plenty of time to scrape up a few bucks.
* The champion is awarded with a larger pot at the expense of the procrastinators.
You may be wondering how you handle the situation where a team does not pay his money by the time the playoffs start. Well, if you chose your players wisely you should never run into this situation because all of your owners should be reliable. In the most extreme circumstances the last option is to kick out the delinquent owner and replace them with someone else. If they cannot pay their league entry fee by season’s end it is probably wise to replace them anyway. I have used this system in my own leagues and it has worked flawlessly with very few payments coming after week 1.
