Football Index taking stock of player performances

No doubt inspired by the brief popularity around Celebdaq and Popex 10 years ago, new venture Football Index plans to bring real money betting into predicting the value of football players based on performances and column inches. Scott Longley explains.

The philosophical links between gambling and playing the stock market are well-known and stretch way beyond the accusations about casino banking prevalent ever since the 2008 financial crisis. The same concept lies behind both – making money from a combination of knowledge and hunches.

The latest variant that hopes to capture the considerable audience that straddles the two is Football Index, a player trading game that combines a love of football, a clever algorithm and the basics of buying and selling common to all exchanges from the London Stock Exchange through to Betfair.

The company was formed by Adam Cole, a serial entrepreneur, who originally conceived of a celebrity-driven concept. However, figuring that football was an easier sell to his audience, Cole and his advisors switched the concept to concentrate of football only for launch.

Keith McDonnell, well-known gaming industry consultant and previously managing director at Bodog and head of online at Totesport, is among the early-stage investors who to date have invested £500,000 of seed round cash. He points out that by switching to football, it allows for a more obvious link to sports-betting, albeit that you are buying into an individual players fortunes both on and off the pitch.

“A player’s value within the index can be affected by a number of things, including his performance but also rumours about transfers, anticipation of the weekend fixtures ahead, international call-ups,” says McDonnell. “I think the focus on football is a smaller step away from sports-betting, and therefore easier to understand than going into celebrity.”

As with stock investing, the aim of Football Index is that it can be a long-term proposition; you are effectively buying into the future of players not just how they perform on in any given match. This is measured via an in-house algorithm that has been tested and approved by both the UK Gambling Commission and its equivalent in Jersey.

The algorithm is attuned to taking into account publicity, but McDonnell is quick to suggest that human intervention will prevent a player’s value on the exchange being affected by adverse publicity. “We’re about good PR – we’re not a dead pool book,” he says.

From that point, as with all stock market exchanges, it is up to the market to decide the value of each player and the investment in them. But again as with investment, research and knowledge can give players the edge. “If anyone sits down and studies the form – or watches Sky Sports News all day every day as I tend to do – and can anticipate upcoming fixtures and events, then they might be able to foresee rises in the value of the players,” says McDonnell. “There is the potential every day of the week for information that might drive the share price – it can make reading the papers every day more interesting.”

Aside from pushing up the sales of The Sun and The Mirror (or the Times and the Telegraph if your interest in football is more cerebral), Football Index will be hoping to tap into the general buzz around the Premier League in the UK. The company has already launched its offer to friends and family and McDonnell says the interest and take up has been impressive so far. “Every day has been out best day so far, which is what you would hope for,” he says.

The next stage will be an additional funding round, to help with the marketing push. McDonnell points out that the company will be hoping to prove enough growth potential to get investors excited. “We need to paint a positive picture,” he suggests. “I’ve been in the industry for 16 years and it’s not very often that something so easy to understand comes along that hasn’t been done before. It’s encouraging. Also what is going on with daily fantasy sports and eSports – maybe some people are looking at that and thinking whether there is something else they can consider.”

As suggested by the aforementioned licensing details, Football Index is taking a wholly regulated markets approach and McDonnell believes this “opens the net” of who the company can speak to in terms of investment. “If you talk grey markets, then some investors will say no,” he says.

But he says the company is realistic about the difficulties is faces when it comes to the crowded UK market and it has kept expectations to a minimum. He points out that if the company can get to the stage of proving the concept then it puts it in good shape to go for scale in the UK and opens up the potential to look at further markets and other variations, including looking at the original celebrity index.