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Phenoms FF site plans to declare bankruptcy


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Anybody play in any leagues there?

 

The article said they burned through players' money to pay web development costs and don't have enough $ left to pay the league winners.

 

http://thebiglead.com/2014/12/17/phenoms-fantasy-football-site-unable-to-meet-full-prize-obligations-plans-to-declare-bankruptcy/

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It is inexcusable and illegal. They entered into a contract with every player and broke the conditions they themselves set forth. The web development problem is 100% theirs for accepting cost overruns 3X what they initially thought. No one realizes right at the end of the year that "hey, we can only pay out 20% of our obligations".

 

At best poor business.

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It is inexcusable and illegal. They entered into a contract with every player and broke the conditions they themselves set forth. The web development problem is 100% theirs for accepting cost overruns 3X what they initially thought. No one realizes right at the end of the year that "hey, we can only pay out 20% of our obligations".

 

At best poor business.

 

Agree, just like a fantasy league commissioner that would take the money and spend it on bills or other stuff and then not pay out the winners, this is inexcusable, and should be illegal if it isn't.

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My guess is they used flowery and wholly unrealistic revenue projections to "allow" them to take on the large scale web development project. An unfortunate issue a lot of startup businesses fall victim to...and that's just a phrase, not calling them victims by any means. The methodology by which firms project ROI is flawed, IMO, by allowing the analysis of numbers to be done in a linear fashion; of which the real world of business does not and never has performed...slow and steady just isn't in fashion when growing a business

 

I hate this because all it does is give more fuel to the fire of those who opposed online gaming/gambling...instead of policing it from essentially an outright illegal standpoint, we should be regulating it; hell, derivative trading is freaking legal and regulated, and if that isn't straight up gambling I don't know what is

 

But I'm on my 5th cup of coffee and 3 hrs of sleep, can't stay focused on the primary topic: this sucks hardcore for those involved

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It is inexcusable and illegal. They entered into a contract with every player and broke the conditions they themselves set forth. The web development problem is 100% theirs for accepting cost overruns 3X what they initially thought. No one realizes right at the end of the year that "hey, we can only pay out 20% of our obligations".

 

At best poor business.

 

 

I've been a contestant that was screwed before. The worst part was that they accepted transaction fees right up to the final week before disappearing afterwards.

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I know that there is a huge thread on this topic over at FBG, with a lot of chatter about what's going to happen and such. My question is this... What's the appeal to joining a league like this? In other words, I'm not that familiar with Phenoms. Are these leagues common simply because people (ironically) don't trust joining leagues with random people on the internet (like BOTH leagues), so they join something like Phenoms because it has (or had) a good reputation?

 

My understanding is that he created a platform and a bunch of leagues, but also acted as commissioner of those leagues. So, it would be like the equivalent of MFL collecting dues, and running all of their leagues, but on a smaller scale, no? Seems like a bit too much of putting all of your eggs in one basket, so to speak. Leave the IT guys in charge of the platform, and the commish/treasurer/LeagueSafe, etc. in charge of holding the money, but don't leave the IT guy (who also happens to be the commish) in charge of holding the money.

 

Again, I don't know much about Phenoms, so maybe I'm not understanding it correctly. It just seems weird to me that this guy was not only collecting $$ for so many leagues, but also running them (or at least many of them) as well. Or, maybe he wasn't running them, per se, but just involved to make sure the platform worked correctly?

 

Regardless, it sucks. Sounds like it was well over $1 million, and many participants had several hundred (or more) dollars invested in multiple leagues, including deposits for future years (in dynasty leagues). Losing the $$ is bad enough, but they lost the time spent on those leagues, as well, potentially.

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Nope... Never heard of them either. After wcoff, I quit even thinking of those types of leagues.

 

 

FFPC was started by guys who got burnt by WCOFF. They put all prize money in escrow and have paid out promptly every year (I already have my regular season prize money while competing for the grand playoff prize). Top notch customer service and focus on the customer at every juncture. I'll continue to put my trust in those guys.

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You can never be 100% safe unfortunately, but I will say I know guys at the FFPC and they have all been absolutely top notch and above board to me. It was made by a group of FF players who just wanted a good contest, not just some guys looking to cash in.

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Pheonoms had me build a custom myfantasyleague.com skin for them a few years ago

I only charged them $150

Their website could only cost $2500 max

Server cost maybe $150/month

 

I highly doubt they burned through the money on the items stated

 

I would say they mismanaged funds , took too much revenue for themselves or simply stole the money and are hiding behind a bankruptcy.

 

I am stumped why anyone would join any of these services to begin with. You can host your own leagues collect funds via league safe , payout 100% of fees and protect your league and members from these small time crooks.

Edited by theeohiostate
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Ok just read the article linked in initial post

 

I see Pheonoms was going to develop their own own hosting service so they were paying for development at a estimate of $200k but costs arose to over 600k

 

Well that's all I needed to read to call BS on that claim

i have been researching this very thing for the past year with a few other developers and investors

 

With monthly data costs from stats.com / server costs and development cost (mostly done by ourselves) the total cost would be less then 50% of their claims.

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Pheonoms had me build a custom myfantasyleague.com skin for them a few years ago

I only charged them $150

Their website could only cost $2500 max

Server cost maybe $150/month

 

I highly doubt they burned through the money on the items stated

 

I would say they mismanaged funds , took too much revenue for themselves or simply stole the money and are hiding behind a bankruptcy.

 

I am stumped why anyone would join any of these services to begin with. You can host your own leagues collect funds via league safe , payout 100% of fees and protect your league and members from these small time crooks.

 

That's what I don't get. Why go through a site/provider that takes like 20% (give or take), right off the top? I guess people think it's more safe (because it's bigger)? But, this isn't the first time something like this has happened, as others have mentioned... Antsports, WCOFF, and others have folded/failed as well.

 

Lot of rumors/speculation regarding Phenoms. It's not so much "they" as it is one guy (Michael Zangrilli). My understanding is that he was the man behind the scenes for Phenoms, literally facilitating all of their drafts, etc. Those who follow(ed) his twitter account seem to think he had a gambling problem, from what I have read.

 

At least LeagueSafe only takes a very small cut, in exchange for holding (and paying out) dues/payouts. I'm not 100% pro-LeagueSafe (there are some risks there as well), but the more things like this take place, the more it makes sense to use something like that. The only other real alternative is to just participate in leagues with people you can trust, which is hard to do online (through message boards, etc.).

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