As a fantasy commissioner, part of your job is to set the league’s prize payout structure. The payout structure defines what the award categories are and the payout amounts for each category.
In the last post, we covered how to select the right payout categories for your fantasy football league. Now that you’ve determined your award categories, we’ll discuss how to set the payout amounts for each category.
Below are some tips and guidelines for selecting your league’s payout amounts. These tips can also be used to set payout amounts for other fantasy sports.
Payout Amount Assumptions
First, this guide assumes that you’re not in a winner takes all league. You should be good to figure out the payouts for that one.
Next, it assumes that your league awards prizes for, at minimum, the first, second, and third place post season finishers. That’s the most common payout structure in fantasy football. If that’s not one of your award categories, most of these tips can still be helpful if you adjust them for your league’s situation.
You will also need to know what your league’s entry fee will be. This is needed to determine your available payout pool and helps for setting some of the payout amounts.
Calculating the League Payout Pool
The available payout pool is a function of your league’s size and the entry fee. If part of the entry fee goes to cover the draft party, then don’t include that amount in the prize pool. Also exclude any portion that’s used to buy trophies, pay for your league’s website (if using a premium service), or buy any other league supplies such as a draft board.
The payout pool formula is:
Payout Pool = League Size x (Entry Fee – League Costs Portion)
Now that you know your payout pool, we can start setting the payout amounts.
Tips to Select Your League’s Payout Amounts
Below are guidelines for setting up your league’s prize values. I always follow the first two when I’m the commissioner and recommend that you do, too. The rest are recommended but optional depending on your league’s size and award categories. Adjust them as needed for your preferences and league.
1. First place prize should be the largest payout amount. The league champion deserves the biggest prize.
2. Third place prize should at least cover the entry fee. Finishing in third place, especially in larger leagues, is worthy of winning your money back. I always set this payout equal to the entry fee.
3. Set the second place prize at half the first place prize and third place at half the second place prize. This is a quick, easy way to set payouts for first, second and third. You may need to adjust them from these amounts, but this will give you good numbers to start with.
4. Use multiples of the entry fee for prize amounts when possible. This is a personal preference, but it does help to get your initial amounts this way and adjust from there. I like to view any winnings as a return on investment and it’s fun to say that I made X times my money back this season.
5. Regular season points or record winner should get a payout comparable to 2nd place. This player basically won the regular season so the prize should be a good one. I set it equal to second place and have played in leagues where the season prize was higher.
6. Weekly prizes should be less than half of the entry fee (e.g. 1/4 of entry). Why? Most leagues have a 13 or 14 week regular season so the total payout amount for a weekly category adds up quickly.
7. Set other season level awards equal to the entry fee. This depends on how many season awards (e.g. biggest season blowout) there are. For leagues with more than one or two, you’ll need a lower payout amount.
8. Use whole dollar amounts. This keeps it simple and makes the payouts easier. Don’t set a weekly prize amount of $3.29, for example. Multiples of $5 or $10 work best.
How to Start Setting the Payout Amounts
The first prize amount you’ll want to set is for first place because it’s the largest. Once you set that prize, it’s easier to work through the rest in descending order.
In fantasy leagues without a weekly prize, first place payout is usually 40-50% of the payout pool. For leagues that pay a weekly prize, it’s usually 25-35% of the pool. Feel free to adjust the ranges if you want a larger or smaller championship prize.
Pick a number in that range then start filling in the other prize amounts using the guidelines above. You may go through a few iterations of this to get the numbers to work out the way you like. That’s normal. My first pick usually ends up too high and I’ll revise it at least once.
Alternatively, you can start by setting the third place payout equal to the entry fee, doubling it for second place, then doubling that to get your first place amount. Depending on your league size, this simpler way should get you close to the ranges above. You can adjust the numbers from there.
For an existing league that’s using the same payout structure, either reuse last year’s amounts or start with them and adjust as needed.
Example Payout Amounts
Here are two example fantasy football leagues to show the guidelines in action. The league sizes, entry fees and categories may be different than yours, but they’ll help give you ideas for setting your league’s payout amounts. Even if one of the examples matches your league exactly, you still might want different payouts than what I chose.
Example #1: 10 team league / $25 entry fee
Payout Pool = 10 x (25 – 0) = $250
This league has a 14 week regular season where the top 4 teams make playoffs. Prize categories are: First, second & third place (post season); highest regular season points; and highest score of the season.
|Highest Regular Season Points:||$50|
|Highest Score of the Season:||$25|
Example #1 is a simple case that follows all of the rules of thumb outlined above. Yes, it can be done.
Example #2: 14 team league / $50 entry fee ($10 goes to draft party expenses)
Payout Pool = 14 x (50 – 10) = $560
This league has a 13 week regular season where the top 8 teams advance to playoffs. Prize categories are: First, second & third place (post season); highest regular season points; weekly highest points; and biggest season blowout.
|Highest Regular Season Points:||$90|
|Weekly High Score:||$10 per week ($130 for 13 weeks)|
|Biggest Season Blowout:||$20|
Assigning payout amounts for this league is trickier because not all of the entry fee goes to the payout pool. Plus it has a weekly prize and two regular season prizes, so there’s a lot going on here. Most of the guidelines are followed with a few adjustments, namely that the second place prize is a little less than double third place and the season blowout prize is less than the entry fee.
Post Game Wrap-up
Remember that there’s not one perfect payout structure that fits all fantasy leagues. These guidelines are meant to help you determine the payout amounts that are right for your league. So pick and choose which tips work best for you and adjust them as you like to suit your league’s situation.
Whatever amounts you decide on, make sure to double and triple check your math before publishing the payout structure to the league.
Good luck and have a great season!
Image Credit: Ervins Strauhmanis used under Creative Commons.