Last Week's Question: What's a reasonable
administrative fee for running a Survivor Pool?
Matthew Schiff has contributed his Survivor Pool picks to this column
for almost as long as Q&A has been around. Over the years, he
has received numerous questions from readers about the administration
of Survivor Pools. This year, he became involved in an especially
detailed correspondence with a reader named Ed about the administrative
fees associated with such pools.
Since so many other readers of this column have written Matthew
with questions similar to Ed's, Matthew thought it might be beneficial
to let the world eavesdrop on the conversation that he had with
Ed during the course of the 2014 season.
As his first note to Matthew makes clear, Ed's suspicions were aroused
when he noticed just how much of the purse the administrator of
his Survivor Pool was keeping:
I am seeking a general consensus as to what % is fair for the "administrator"
of the survivor pool to keep for himself. I am in a pool that started
with 900+ entries and is down to 9. [Our administrator] has never
stated what his fee is. He just emailed us an offer from one of
the 9 to split the pot, and the net leaves him with approx 16%.
This seems higher than prior years even though the pool has grown
a lot over the past 3-5 years.
I'll let Matthew's response speak for itself before I chime in:
Thanks for your question. As someone who has
run these survival pools for a very long time, it is now so easy
to keep track of these picks that the fee should really be no more
than a free admission to the pool. Even $100 seems too much for
this pool. But then again, I’ve always been about the money
going to the participants and me enjoying the league with everyone.
Just my two cents.
I share Matthew's sense that Survivor Pools are so easy to run that
it would be reasonable for the administrator in Ed's example to
be content with a waiver of the fee for his own entry into the pool.
Of course, this assumes that the administrator is not sinking very
much personal time into the management of the pool. You don't need
to know very much about Excel to make a spreadsheet that will track
winners and losers (and who got eliminated when) over the course
of a season. In larger leagues, it's important to set up an interactive
model (so that survivors can enter their own selections each week).
In smaller pools (say those that begin with fewer than 50 participants),
it may not even be necessary to automate the selection process.
"What?" you ask. "Do you seriously expect administrators
to enter 50 selections by hand each week for the entire football
season? Do you think I have time for that?"
No, I don't. Just remember that Survivor Pools tend to weed out
participants in bunches each week. If you start by entering fifty
selections by hand in Week 1, you should probably expect to be entering
fewer than 20 selections by Week 4.
Obviously, an automated system is preferable to one that requires
data entry on the part of the administrator. And the larger a Survivor
Pool becomes, the more essential it is to automate as much of the
data entry as possible. Administrators who have designed especially
sleek and intuitive interfaces for the folks in their pools may
feel entitled to some compensation. But how much compensation are
such administrators entitled to?
Ed isn't sure, but he thinks that more than 15% of a pool with hundreds
of entries at $50/head is too much:
I was one of 20 survivors in 2012 from 791 entries.
Just went back and figured that [the administrator] took about $5,500
or 14%.
For 2014, it looks like he will take about $7,500 or 15.5%.
Unfortunately, we have all allowed this guy to be far from transparent
up front. I guess I have no leverage at this point since he HAS
ALL THE MONEY and all I have is an email address and a PO Box.
As Ed indicates, it's too bad that he didn't investigate this pool
(and the administrator's practices) before becoming involved. But
I have to applaud him for understanding that there is precious little
he can do about it now. At least he's being realistic.
Of course, Matthew and I have no way of knowing what kinds of expenses
the administrator of the pool has incurred in setting it up. Maybe
he flies all over the country passing out pamphlets to promote his
pool at sports bars. (Probably not, though.) Here's Matthew's response:
How did the pool get to be the size that it
is? Did the administrator incur any personal costs to get the 1000
entries? If so, he is entitled to cover those expenses. But I hardly
think that they would be $7500, or even the $5500 reported for 2012.
When Matthew shared this correspondence with me, the first benchmark
for a comparison that sprang to my mind was the 10% rake that we
now see all over the internet for daily fantasy sports wagering.
(10% is actually an overestimation, as there are incentives that
will allow most daily participants to cut the rake down closer to
7%. See
this article for details.)
Think for a moment about the complexity of managing a Survivor Pool
relative to the complexity of running a daily fantasy sports website.
For the Survivor Pool, all you need to track is a grand total of
32 NFL teams--at most! as the number is smaller during bye weeks--and
whether they won or lost. For daily fantasy sports, on the other
hand, you need to track specific clusters of players vs. different
clusters of players. You need to know whether/how those players
scored, how much yardage they ran for, how many passes they caught,
how often they fumbled, etc.
In terms of complexity regarding data management, there is simply
no comparison between a Survivor Pool and the average daily fantasy
sports contest.
I can't imagine that Ed's administrator could actually claim (with
a straight face) that the data management of a Survivor Pool is
grueling enough to warrant a 15% rake when you can't turn over a
virtual rock on the shoulder of the information superhighway without
discovering some daily fantasy sports outfit looking to charge a
10% rake for something that is infinitely more complex.
So maybe the rake is less about managing the data than it is about
handling the money. Maybe the fee is about processing all those
checks and other payments (which definitely takes time and isn't
any fun). If that's the case, then maybe Ed's administrator is billing
the pool for the time he spends processing payments. An hourly charge
for processing the entry fees could also account for why Ed's administrator
is charging more for handling 900+ entrants than he charged when
there were only 791 entries.
Even so, $7500 for sifting through roughly one thousand $50 checks
amounts to one heck of an hourly fee. If you can only process 10
checks an hour (that's six full minutes per check), that's a pretty
satisfactory wage of $75/hour.
It's true that managing a Survivor Pool takes time and energy, but
it's not hard to find pools with significantly lower administrative
fees than Ed has encountered. I certainly wouldn't consider getting
involved in any Survivor Pool with an administrative fee greater
than 10% of the purse. And at that price, I would expect a smooth-as-silk
interface and a huge pool of participants. I would much rather see
the administrator deducting a flat fee for time spent managing the
data and the money. (And if it takes him six minutes to record the
deposit for a single check, I think he has probably stumbled into
the wrong hobby!)
Here's Matthew's parting advice for readers like Ed:
As for next year’s pool, I suggest that
you find one that you have friends in or know the setup better from
the beginning--unless of course, you can get over the fact that
the [administrator] is making money off doing this.
Matthew and Ed have my thanks for sharing their correspondence with
the readers of this column. If anyone out there wants to take issue
with any of the points I've made about administrative fees, I'll
be happy to include your feedback in my column for Week 17.
This Week's Question: Another hybrid
teaser as a prelude to Week 17
As I announced last week,
the column for Week 17 will feature some of the more interesting
H2H variations that readers have shared with me this season. Some
readers may recall that way back in Week 3, I featured a "King
of the Hill" system designed by a reader named Peter to help
good teams overcome the bad luck in the schedule that sometimes
keeps them from reaching the postseason.
For details concerning Peter's system, please refer to that earlier
column. For now, I simply want to update readers about the progress
Peter is making with regard to having his league implement his proposed
model.
For weeks after he first floated the idea, his league was mostly
unresponsive. Nevertheless, he has sent out weekly updates (such
as the one featured below) to let his fellow owners know how things
would have played out according to his KOTH rules if those rules
had been adopted.
Week 15 Recap – Huge drama in the 1st-2nd game as Bright Obvious
loses to The Bomb Squad 139.5 to 111.0. Both teams are at 10-5 after
15 weeks with the tie-breaker of ‘Points For’ going
to BO with a 1853.2 to 1530.4 advantage over BS. They play again
for the KOTH Championship with the winner taking the 2014 KOTH crown!
This was BO’s first loss of the playoff season. The Bomb Squad,
also with only one playoff loss, can claim first overall with a
second win over Bright Obvious. Good luck to both!
In the 3rd-4th game, Evil Empire won their matchup versus Real Football
to hold onto 3rd place at 9-5-1 and sending RF to 5th at 8-7. An
EE win will push them to 2nd overall at 10-5-1, better than the
loser of the championship game at 10-6.
In the 5th-6th game, The Abusement Park won their matchup versus
NY Goodfellas. TAP moves to 4th place with an 8-6-1 record and NYG
moves to 6th at 8-7. They are a single point (!) for the season
out of 5th behind RF, who they play in week 16 KOTH. The Abusement
Park plays Evil Empire in the 3rd-4th place game. . . .
Peter's write-up continues with details concerning three other matchups,
but the section excerpted above demonstrates how vivid the hypothetical
mumbo-jumbo about untested playoff models becomes when it's applied
to a live, functioning league.
Now that he's able to show the other owners in his league how his
proposed model would work, he is starting to pique their interest.
They may not end up adopting his model exactly as he proposed it,
but at least he is getting the ball rolling towards a league-wide
discussion of tweaking an H2H model that too often rewards teams
for being lucky rather than good.
I share this story from Peter's league as a way of reminding readers
that if they have scoring or policy changes they want to see implemented
in their fantasy leagues, right now is the best time to push for
them. As fewer and fewer teams are left in contention for fantasy
championships, this is a great time for owners to think dispassionately
about modifications they might like to see. And since the football
season is still going strong, any theories can be harmlessly/hypothetically
put to the test as the season winds down.
Survivor Picks - Week 16 (Courtesy of
Matthew Schiff)
#3: Jacksonville over Tennessee (13-2: PIT,
NO, CIN, SF, CLE, SD, NE, KC, SEA, DEN, GB, PHI, STL, DET, TB)
Last week I went out on a limb with my number three pick, and it
almost paid off. This week, I think I’ve just plain lost it.
In a game that will prompt Tennessee fans to yawn and Jacksonville
fans (whose stadium is usually half empty anyway) to shrug, why
would I choose the Jags? Because someone has to win it, right? (Maybe
not – just ask Cincinnati and Carolina.) But if Blake Bortles
plays, then Jacksonville should win this exercise in futility as
the home team favorite. Understand that statistically speaking,
these teams are almost identical. But it is the quality play of
the quarterback and wide receivers in Jacksonville that should tip
the scales in favor of the home team this week. So if you like to
live on the “wild side,” then this game is for you.
Best of luck.
#2: Philadelphia over Washington (10-5: CHI,
Sea, NO, TB, DET, Den, CLE, MIA, KC, BAL, SF, GB, HOU, MN, IND)
If you haven’t used Philadelphia by this week, now is the
time. The Eagles relinquished control of their own destiny with
a heartbreaking loss to their only divisional rival with a pulse,
the Dallas Cowboys. The Eagles overcame a 21-point first half deficit,
only to lose 38-27. Now for Coach KELLY to DRIVE his Eagles to the
playoffs (Philadelphians will catch the reference to a certain street
on the Schuylkill), Philly must win out in the hope that Dallas
will lose one of its last two games. Without a win, though, the
Eagles are as good as done. So forget that it is a division game.
Forget that DeSean Jackson is welcoming his former teammates to
his new home and he wants to play well against them. And definitely
forget that the last time they played, it was 27-27 at the end of
the 3rd quarter – as these teams are definitely going in different
directions. The Eagles must win or their season is over. It’s
that simple. Win, or go home. Is that reason enough? I think so.
#1: Buffalo over Oakland (12-3: PHI, DEN,
NE, SD, GB, SEA, BAL, DAL, CIN, AZ, WAS, IND, DET, NO, NYG)
The Bills still have a slim chance of getting into the playoffs,
but this week they have to face an Oakland team that is much more
dangerous than it was before Tony Sparano took over. The Raiders
are 2-0 at home in recent weeks against quality opponents (the 49ers
and Chiefs). But Kyle Orton has his Bills believing that they still
have a shot. With a balanced attack from Fred Jackson and Sammy
Watkins, as well as another stellar effort out of the Bills defense
that stymied Aaron Rodgers last week, Bills fans may just be looking
at their first playoff appearance in 14 years. To do that, they
also have to win out and hope for help. In a week where your other
choices include the Dolphins over the Vikings, Jacksonville over
Tennessee, or St. Louis over the Giants, it’s smarter to take
the games that still mean something to the players on the field.
For the first time in a long time, these Bills are playing for something
in Week 16.
Mike Davis has been writing about fantasy football since 1999.
As a landlocked Oklahoman who longs for the sound of ocean waves,
he also writes about ocean colonization under the pen name Studio
Dongo. The latest installment in his science fiction series can
be found here.
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