Most fantasy football leagues offer some type of awards (either monetary or some type of fantasy prize 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.
In this article, we will cover various options for establishing fantasy football league fees for the purpose of generating league revenue. this revenue can then be used to reward the best teams, increase engagement, and keep your owners happy.
Fantasy football league fee structures
No single form of fund raising works for all types of fantasy football leagues, but there are two well-established fee structures which are common in the fantasy football community: One-time Entry Fees and Transaction-Based fees.
These two methods are tried and true approaches to generating league revenue that should help you raise the desired funds to finance your league prizes.
One-time league entry fees are a must
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 things like their draft and their prizes around.
Commissioners generally favor this method because it requires the least amount of effort as one only has to collect one lump-sum payment from each fantasy owner.
Pricing the league entry fee
The league entry fee can be any value but most serious leagues charge around $100 per team. I think this is a reasonable entry fee when you consider that this includes many weeks of fun-filled fantasy football enjoyment.
League fees are usually used to pay for league hosting and/or any prizes to be awarded at the end of the fantasy season. As such, it is always to collect the league entry fee as early in the season as possible.
To save money you could opt for a perpetual trophy (a multi-year fantasy football trophy). But if you want to purchase a significant fantasy prize like a fantasy championship belt, it's best to have those league funds available as soon as possible.
I review some of the best fantasy football championship belts here.
Some league even award the worst team with a funny loser trophy. These trophies aren't expensive, but you'll still need to budget for them to ensure you have enough cash-flow.
A league entry fee can keep out the riff raff
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 too expensive for those who are generally interested. Find the balance that works best for you and your vision of the league.
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Having money early means awarding prizes earlier
Yet another plus for entry-fees is that they can indirectly help you to encourage league participation throughout the entire fantasy football season. By collecting money at the beginning of the season, there is a prize pool available starting at Week 1.
For instance, if you have collected all of the league entry fees early, you could begin awarding weekly cash prizes to the teams with the highest point total. These types of weekly fantasy football award ideas help to ensure that all teams will remain engaged throughout the entire fantasy season, even if they have been eliminated from the playoffs.
Transaction-based fees are pay-for-play
Some leagues implement a fundraising system whereby fees are accrued based on user-initiated player 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 an approved player trade.
This fee structure is defined to gradually build up a pot dedicated to year-end prizes.
So, rather than making ever owner pay a flat fee at the beginning of the season, each owner's fees will depend on the number and type of their player transactions. While transaction fees may seem small, over the course of an entire fantasy season they can result in a very sizable pot.
Transaction-based scoring systems are risky
I generally advise against transaction-based fees unless your league is well-established and everyone is in favor of this type of system. They require more hands-on management and can lead to other problems.
Collecting entry fees from participants before the season begins can be a nerve-wracking endeavor, even in a well-run league. Collecting transaction-based fees at the end of a season can be 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. Most owners will have no incentive to pay their fees once the season is over, so your entire league is running on the honor system. Even if 90% of your owners are honorable, that other 10% will cause your league some serious headaches.
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 chase people around for money.
One way to avoid collecting fantasy dues altogether is to transition your private league to a platform that hosts big money fantasy football leagues. They handle all of the money so you can focus entirely on running your own team.
How to collect fantasy football dues
Even in leagues where the members know each other well, commissioners frequently have problems collecting league entry fees from owners. However, there are things you can do to minimize your chance of getting burned while still giving owners some flexibility when paying their bills.
How you handle delinquent or dead-beat owners depends largely on your managerial style. Here are some options for dealing with problem owners.
Immediately expel owners who don't pay before the draft
Some leagues handle the delinquent owners problem by not dealing with delinquent owners at all. Instead, they immediately expel any owners who do not pay by the predefined deadline.
If your deadline is before the fantasy draft, be sure that you leave yourself enough time to find a replacement owner. I know some commissioners that always have a back-up owner or two on standby in case one of their owners doesn't pay before the draft.
If your payment deadline is right before the playoffs, be sure you have a plan for how the league will absorb any revenue lost by expelling a team. For instance, you can define your prize payouts according to a percentage of the pot (in your league constitution) rather than the expected value.
Reward players that pay early
Instead of punishing the delinquent owners, how about heaping rewards onto the players that pay early? Let everyone know when you start collecting entry fees and determine your draft order by the order in which owners pay.
In this way, paying league fees early becomes a draft strategy of sorts. You can also start a draft lottery where the owners who pay earliest get the most entries into the drawing.
Speaking of draft strategies, I wrote a review highlighting some of the best fantasy sports books on the market. These books can help you develop a solid draft game plan and start the season on the right foot.
Institute an additional late payment fee
If you're confident that you can eventually recover the fees, you can always charge a late fee to owners who do not pay on time. No one likes late fees so this can be an additional motivating factor to get owners to pay on time.
You may ask why someone would pay a late fee if they won't even pay the standard league fee. And that would be a valid question. That's why I wouldn't institute a late fee in any of my leagues.
Instead, I prefer to put rules in place to limit a delinquent owner's ability to win prizes. That's what I'll discuss next.
Limit prize payouts to delinquent owners
There is another well-tested approach for addressing late payments that will encourage people to pay in a timely manner. I use this approach for my own league and it is very effective.
Instead of establishing a payment deadline for league-entry fees, allow your owners to pay at their leisure during the fantasy season (as long as payment is made before the league playoffs began). The catch is that any weekly prize won by a delinquent owner is forfeited by that owner and added to the pot for the league champion.
This approach accomplishes several different goals:
- 1It punishes the delinquent owner for paying late (i.e. he/she gives up a weekly prize that they otherwise would have won).
- 2It serves as a motivating factor for all owners to pay their league fee before the season starts.
- 3The commissioner can focus on administering the league and not chasing people around for money before the fantasy draft.
- 4It allows owners extra time to pay their league fees if they have a financial hardship. A few months is more than enough time to scrape-up a league fee.
- 5The champion is awarded 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. In these extreme circumstances, the last option is to kick out the delinquent owner and abort the lost revenue. If the deadbeat owner cannot pay their league entry fee by season’s end it is probably wise to replace them anyway.