Fan Plan has an innovative way to give access to the College Football Playoff national championship game to the average fan.
With mortgages, families, and the other incidental costs of living, the ability of many fans of college football’s best teams to attend the College Football Playoff national championship game can be limited. On top of the game tickets, which can start around $4,000 for a pair, there’s the cost of a hotel room, travel and food which can easily make it the equivalent of buying a used car. That barrier to entry is exactly what Fan Plan has found a way to address.
Former Super Bowl-winning fullback Daryl Johnston and renowned sports executive Terry Leiweke are two of the people behind Fan Plan, and Leiweke’s involvement came about because of the opportunity to make events like the national championship game affordable.
“I had a product in Las Vegas called ‘The Linemakers’,” Leiweke said. “We had a show on Discovery’s Velocity channel and we had a partnership with The Sporting News. It was sports book operators and basically every week we told you how we made the numbers on a game. These guys are characters, very interesting. When my brother Tod went to the NFL, the FBI does a background check on your whole family so up pops The Linemakers and so I got out of the way, sold my shares back to The Sporting News and I’m sitting in New York where I have a home and I get this call from my wife, ‘get out of here you’re a pain if you’re not working,’ so I flew to Dallas and I was intrigued by the concept and this kind of good guy stuff where you can actually help people get an affordable opportunity to go to the best sporting events in the world.”
How it works
Fans of any college football team which is eligible to participate in the College Football Playoff national championship game can purchase a “plan.” If the corresponding team qualifies as one of the two teams who will play in January’s game, all customers who purchased plans will receive vouchers worth $1,000 that they can use on things like game tickets, travel, and a hotel room.
Right now, plans start as low as $20 and range all the way up to $264.96 for a plan tied to the University of Alabama Crimson Tide. Those prices are set by a ranking that Fan Plan generates itself, called the Fan Plan Championship Index (FPCI).
“The championship index has at a minimum 16 different derivatives that we feed into a program that has been developed by quantitative analyst out of Virginia,” Leiweke explained. “Those derivatives are one piece of a formula to set pricing which is probability of a team getting to the championship event times the face value of a plan times a factor. The factor is a risk pool. The risk pool pays the plan redemption process. The risk pool can vary from a .5 to a 2.5. We built an engine and spent the bulk of our initial capital raise developing a risk mitigation and management engine so with that when we do derivatives we plug that probability right in, it’s an API (application programming interface) which goes into the engine and runs through a calculation formula and basically spits out the price. When we first looked at that, we were like this is really cool because ours is considerably different than for example the Las Vegas lines. Las Vegas is based on who is going to win a game, ours is based on who is going to play in a game. In Dallas, we are across the street from the college football playoff guys, we understand exactly how their formula works from their committee and we adjust a lot of the same kind of information. The championship index is an interesting piece of work because it’s a probability factor of who is going to play in a game.”
Fans can purchase multiple vouchers to increase their possibility of being able to afford everything that going to the game would entail. Even considering the most likely outcome according to the current FPCI, which is Alabama playing in the game, a couple of vouchers would cost a fan $529.92 but give that fan $2,000 to spend if Alabama does make good on that prediction. For fans thinking there has to be a catch, there absolutely is.
If the team which corresponds to the plan purchased doesn’t advance to the national championship game, Fan Plan keeps that money as its revenue. For fans who are worried about the legality of purchasing a plan because of existing laws against gambling on sports, those fears can be put to rest. The product was reviewed by the Attorney General’s office in the state of Texas. That office declared it a prize indemnity package, which is legal.
The concept of buying a prize indemnity package to be able to attend a sporting event is a great one and one that can easily translate to many more high-profile events.
“That’s the whole business plan,” Leiweke commented. “We’re a startup, we go slow, we chose the CFB playoff game for a number of reasons. One it’s an independent game and the tickets were starting to get up over $1,500-$,1700 and they have rabid fan bases. If you look out into the future a little bit, this year they are playing in Atlanta but next year they go to Santa Clara, California so that seemed to us to be a natural starting point. We also understood that while there’s maybe 30 teams in college football who think at the beginning of the year that they can make a run in fact it’s really a much smaller number. In the past few years in college football only once has a team that was outside of the top five gotten in and that was Clemson. You understand that at the top end of college football is where your risk is but you know the trick to our business is to sell them over the whole platform of college football teams. That’s a perfect starting point for us but inevitably there are about 30 events that you can run Fan Plan prize indemnity packages on.”
In addition to the voucher product, the FPCI itself has generated some interest. The index, which is updated every Monday, has taken on a life of its own.
“It’s very interesting in a startup business,” Leiweke elaborated. “You can identify some of your revenue streams but you really don’t understand what all of your revenue streams can be. The championship index is akin to posting lines from services fed out of Las Vegas primarily and it all works hand in hand. You have to understand why is there an index? Because there’s an adjoining piece called Fan Plan. Where am I using this information? If you get lines and point spreads, you know where to go with that. If you get a championship Fan Plan index, where do I go with that? It all works in step with each other, but we think the index is a signature for us for sure. It’s totally unique, no one else has a reason to do it except for us, no one else does it except for us.”
Next: 10 Games That Would Make College Football Exponentially Better
The world’s top-tier sporting events like the College Football Playoff national championship game can be more expensive than most fans can afford. Fortunately, Fan Plan has a plan.