That title is meant to produce a smile. I don’t actually think that fantasy sports can be a legitimate side-hustle for most people, but I was led to this topic based on my past few monthly budget reviews. In each of the past two months, I had entries for fantasy sports winnings. These were payouts collected from my two fantasy football leagues. The payouts also included pre-payment for each of my two fantasy baseball leagues that I am in. This observation made me recall a conversation I had with a good friend and constant reader Mark (shout out, M-).
When I first began the financial independence journey, I took it very seriously. I started to eliminate expenses that were unnecessary, and the momentum became very obvious and this process of questioning everything I spent money on because quite addictive. During this process we came upon the time of year when one of my fantasy seasons was about to kick off. Since the initial outlay for my leagues is somewhat sizable, it led me to question whether or not I should continue to play fantasy sports. When I broached the subject with Mark, the response was something along the lines of “… why would you quit, you keep winning…?” While this was an oversimplification and a generalization, it did lead to further discussion about the fact that over the past few years, I have managed to come out ahead on my overall fantasy sports leagues. For each sport that I play, at least one of the leagues has multiple avenues to earn money. It isn’t simply the person with the best record who takes home the loot. For example, in one league I am in, the top point scorer for each week wins a small prize. String together a few weekly winners and you can earn enough to pay your entry fee. There are additional prizes for overall leaders in points, playoff seed, best individual players and a few others. By keeping each of these prizes in mind, I have been able to manipulate my team to the point where I have managed to maximize my investment.
One example of this is in one of my fantasy baseball leagues. It is an auction style league with keepers. In this type of league, you bid on players and the winning bid becomes their “salary.” Then you can keep a certain number of players from year to year, but their salary has escalation clauses. About three years ago, my team was muddling along. I had a roster filled with veterans and they were not performing well. I came to this realization early enough in the season to understand that I was not going to vie for the playoffs. I decided at that point to start building for the future. I scoured the rosters of likely contenders and identified several young, cheap players that they would likely not be using much in the current year but who had tremendous upside. I then crafted a few trades that sent my few marketable players that would help them in their run to the playoffs and in exchange received a few players that I considered “scratch-off tickets.”
Since this is a personal finance blog, I won’t go too inside baseball here but in a nutshell I would up with a few very impressive young players that were very desirable to all players in the league. Once the season ends, there is generally a scramble to maximize the value of the number of keepers that are allowed. At the time of this anecdote, we were able to keep up to 7 players. I used some of these young studs as the anchors in trades that landed me several superstar players while keeping my overall team salary at a reasonable level. This approach has allowed me to put together a team that has scored several weekly points prizes, made the playoffs each year since those deals and be among the league leaders in total points each year.
So, just to bring things back to personal finance and perhaps answer the question asked in the title, below are the details of the most recent season in one of my fantasy football leagues (I chose football since the data is the freshest).
Entry Fee: ($175)
Weekly Top Points (2 weekly wins): $40
#1 Seed in Playoffs: $150
#2 in Overall Points: $130
League Champ: $280
Total Net Winnings: $425
Love this topic. As a side note, there is an inclination to think this is a game of chance, and to some degree that is true. There is chance involved in the total amount that is won, and a good chunk of sample size volatility involved. Over the long term, the more skilled players will consistently create a positive return for themselves. To me, this qualifies as a side hustle, and a good one, because it is seeped in enjoyment of the activity.