How much is your fantasy team worth?

It’s the last week of the season. Are you fighting for first place in a money league? If you are, how much percentage of your winnings would you give to lock up first place?

Maybe the answer holds some clues toward how we should begin to approach fantasy team valuations.

In past decade, there’s been tremendous advancements in sabermetrics, forecasting services like PECOTA, and player evaluation punditry. We’re even getting close to figuring out the worth of individual players to fantasy teams using value-above-replacement metrics or the parallax method that THT’s John Burnson described this month.

But how about a fantasy team? How much is your team worth?

If you play in a money league, obviously it’s not worth the same as it was the first day of the season. If you invested $100 in a 12-team team league and you’re close to winning $1000, maybe your team is worth several multiples of what you first invested. Conversely, if you invested $100 and your team is languishing in last place, maybe it’s worth nothing.

Allow me to get fanciful for a moment.

Imagine a derivatives market where buyers and sellers of fantasy teams got together during the course of a season to sell futures contracts. Successful teams might look to hedge against unpredictable bad luck and injuries by selling a stake in their team. Unsuccessful teams might look to recover any investment by selling a share in their sinking team to speculators.

Maybe just as importantly, during the course of a season, a team’s fluctuating share price could be an indication of whether a fantasy owner needs to become more active making moves or sit back and let luck normalize.

Who knows whether an idea like this is actually feasible. Would there be enough liquidity in the market to actually get it off the ground? What sorts of information would an owner need to report about his teams so that others could properly analyze the team’s financial prospects?

Those are just some questions:

But it’s an idea we think holds potential. Hell, if someone can offer fantasy sports insurance, a derivative market can’t be that far away.

We’re curious to hear any innovation you’d like to see in the fantasy sports marketplace. Leave them in the comments section below.

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  1. Brian M said...

    One thing I’d like to implement is creating a fantasy league with a more business/management-like setup or pay structure. I’ve mentioned this when you discussed incentives for and against dumping in keeper leagues, but I think building a payout model that rewards wins throughout the regular season, as well as in the playoffs in H2H leagues is the next step in the fantasy experience. It’s really something I haven’t seen done anywhere (but that doesn’t mean no one has thought of it before me). I developed a set of rules with a league structure similar to that of my 20-team H2H 8×8 keeper league. Essentially, you actually pay your payroll which goes into an escrow-type account as the money pool, there can be a cap or a luxury tax, and you have to calculate your marginal revenue based on the expected wins from the regular season, along with an entry fee for the tournament style playoffs. Not only does it enhance the keeper incentive situation, but it also makes things more realistic in evaluating payoffs and costs.

    I’ve written up some rules on my site and discuss how the league could be set up. The payouts could be linear or non-linear, caps can be changed, etc. It’s all open. Anyway, here’s the 3-part post I have on the rules (start at the last post and go up): Rules

    Just a warning: the rules are quite long. I’ve tried to anticipate any problems that may arise, but would love to hear opinions on improvements. While this is a slight change over how leagues are run, I think it’s an extra nerdy way to improve involvement throughout the season. In fact, it would even enhance the ‘value’ estimations in your derivatives market and make them realistic in terms of expected cash flows!

  2. Brian M. said...

    Okay…sorry about the link.  If you go to the site it’s under the “League Rules” keyword.  Just click that and the 3 posts should come up (assuming anyone cares).

  3. Josh said...

    2- or 3-sport integrated fantasy leagues. Imagine trading Albert Pujols for Adrian Peterson or LeBron James. We need some ambitious fella or lady to figure this out.

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