Issue 006 | In-Play Dividends & the Double Deposit Dilemma

These fortnights are getting shorter and shorter……is that just part of aging? I could have sworn the last one was a few days ago! This time next blog, we’ll be talking about the share split announcement! Exciting times. As usual, I’m joined by both co-authors, Liam and FI Trader!

In-Play Dividends

FI Trader

There is much talk of various increases to dividends with the share split, including In Play.

We can tie ourselves in knots with this. I have had a go myself on my blog working out the likely impact of increases and where they may fall. But at the end of the day, anything you see on social media is a guess.

I think we can reasonably expect at least a modest dividend increase (my basic maths voodoo says 6–12%) based on what Adam Cole has said at the last trader meet. But where they will fall we do not know.

I don’t think it will be as simple as rounding up the numbers or saying “if In Play dividends gave this much before, then if you split them by X you actually get an increase” etc. Actually, what FI seem to be doing is using this as an opportunity to reshape dividends in accordance with what makes for a fun and engaging platform.

Basically, I don’t think it will be a case of taking what we have and then dividing it by 4 and rounding it up a bit.

So I think we will see some redistribution to ensure that wins are meaningful (i.e nobody wants a half a penny payout, it will become a joke). And maybe they will make a tweak or two in favour of “fun”. In my view, that means favouring attacking play and goals which is what they have always done.

I am of the view that In Play is actually a pretty fun and attractive addition to the platform and I think it has probably ticked the box FI intended. I hope it does not grow further because it is not FI’s core proposition but I am basically fine with what it adds to the game. FI needs to attract all sorts of personalities. And even for an analyst like me, it’s fun to watch the In Play Dividends drop in each week (and as they happen, in future, hopefully).

I know FIG thinks differently and I think he half expects them to be scrapped. I don’t. But I’m also not too bothered either way.

What I want to see is performance as a whole being pushed forward because it is this, not media, that has really captured imaginations and pushed FI to where it is today.

We are also hitting a point where yields really are pitiful. If FI is going to survive and mature the focus does need to come more back towards dividends rather than pure hype. If it doesn’t, FI will eat itself.

But I am not worried, I think Adam Cole knows that and they will be well aware they need to start sharing some more of the profits with the users. Nobody has had cause to complain so far certainly! But going forward, dividends are going to have to start backing up these sky high prices. It isn’t really FI’s fault that buying has outstripped the dividends on offer so quickly. In fact, it is a sign of success.

This announcement is an opportunity for them to make prices and dividends look halfway sensible again and set FI up for another good year. But that will take more than a 6–12% increase. If they don’t go all the way there now they will need to finish that job at some point before the new Season.

Liam

In play dividends, the third dividend type to be added to football index and at first the most unpopular! But after some time everyone has kind of realised getting paid extra money isn’t all that bad.

With the share split coming up, we’ve seen lots of theories thrown around regarding dividend increases and one popular one seems to be that IPD’s will be increased relatively more than anything else, a theory that I myself had said was possible in an article a few weeks ago which prompted a few people to message me on both sides of the fence and its become an interesting debate, making it a good topic for this newsletter so we can throw our cap in the ring and see what others think.

Now, let’s start with the obvious incentive here. In play dividends are only available to win with shares you’ve owned less than 30 days. Thus, to win them, you need to be actively trading, and if you’re actively trading, you’re moving prices more, you’re more active and you’re giving football index more in commission. Makes sense. But, there is a few catches to this that mean it may not be the greatest idea in the world.

I do still see it as a possibility, but if they were to do it then I think they need to be 100% certain it’s the best move and that the gain in commission is going to offset the extra dividends paid out at the very least because one thing is for sure if they increased it, then tried to take it away a few months, after people would go into meltdown. People want stability and that would not be it, because really IPD’s bring value to lots of players and if they were bought off the back of an increase, then the dividends get reduced again you’re getting double fisted (for want of a better phrase).

The big problem for them is that right now they’re paying out more from it ( you have to imagine) than the incremental increase in commission it is causing. What I mean by that is the commission they’re earning strictly because people are trading to win IPD’s. It’s just not moving markets like young players or whatever everyone wants to buy, and that’s not necessarily anyone’s fault (maybe the onboarding process?) but it’s just the way people see these dividends. It also doesn’t seem to help that once someone bangs in 4 goals and goes up in price a spread miraculously gets slapped on them.

Yet despite not many people trading for them, they’re still paying out a lot, I for one haven’t really tried too hard to win them. Yet when I’ve added them up I’ve had over £500 in the last 2 months and that’s from hardly trading on a medium sized portfolio. A caveat to that though is it would be interesting to see how much of these dividends are withdrawn, because I know not many withdraw dividends anyway but since these don’t count towards the “dividend” total on your portfolio and they come into your account once a week it’s easy to forget about them, I’ve done it a few times. Then your balance just gets topped up and it’s spent again, which is slightly less painful for football Index, but still you have to imagine paying out 2pps that’s been bought in the last 30days on EVERY PLAYER That’s scored in the top five leagues is somewhat a liability, and with a share split reducing prices you’d expect people to buy more shares which would presumably impact their payments a lot, although again, it is worth noting that the fact people’s shares will be split and they will own more won’t actually impact this payment after the first thirty days anyway because it’s only eligible for players bought in the last thirty days.

So overall, yes I think it would be possible, but I’m not sure how beneficial it would be for them compared to the increased costs. We’ll have to wait and see.

FIG

So, I’ve gone back and forth on this subject quite a lot. At first, I was unsure about the add-on. I saw it initially as a cash cow for FI (which by all means is fine) that had very little benefit to a vast majority of players if you consider the commission & spreads. I then flipped slightly, I even made a video trying to explain why IPD give lots of players value, and how we can see it as discount when buying more expensive players. You can watch that video here, and see what my thoughts where a month or so ago. I also saw it as a good marketing ploy, to attract new users.

My narrative has slightly changed, and that’s simply due to the amount of new users FI have had to onboard. Football Index is a really complex product, without even beginning to explain IPD. This creates a double problem. On one side, those who have been acquired via a normal FB ad that uses Capp appreciation as an example of profit, are probably learning the original rules. On the other hand, you have people acquired by the attraction of IPD, and then go on to learn the original rules. I’ve spoken to 1000’s of FI traders during my time in making the ‘FIG’ brand. That’s not an exaggeration, in my twitter DMs alone I’m answering queries daily. I’ve had people who either a) don’t know what IPD is or b) only know what IPD is…..in my opinion, this is a hindrance to on-boarding traders properly. I’m also unsure whether or not this is actually making FI much money anymore. Obviously this is a shot in the dark, but have a look at the price graphs of some GKs and FWDs who were privy to big rises due to IPD…..is there much volume there anymore? If it’s not making FI much money, and it’s complicating on-boarding & the overall trader experience…..is it time we shelf this idea? People need to remember that IPD is still a trial, it’s (according to T’s and C’s) only here until July 1st 2019 before it’s reviewed. I think traders do need to be prepared for the possibility that IPD may not be here past July. This isn’t the same as changing the matrix, or any other game rules- this is an add-on FI clearly communicated to us would be here until July.

My worry on the other hand is whether or not those newer traders know it’s here until then! Lastly, I’d like to speak a bit on what FI is and the values it’s been built on. The notion of a ‘3 year bet’ and your bet not ‘being over after 90 mins’ slightly fly out the window with IPD, especially if you consider FI are using it as an acquisition tool. Removing IPD would not only simplify the product, but also allow FI to go back to basics and really strengthen the underlying proposition that has made them such a massive success up until now.

Double Deposit Dilemma

FI Trader

I guess some users may have been surprised to see double the amount they thought they had deposited in their FI accounts! Hopefully, they noticed that this was real money taken from their bank account rather than a “bonus” before spending.

You can argue that users shouldn’t try this on if they know it is a mistake (same as if your bank accidentally sends you money you have to report it) but really it’s on FI to make sure this sort of thing cannot happen.

We are handing over thousands of pounds to FI and the whole operation relies on trust and confidence.

Mistakes happen, I get that. When they do, they’ve really got to get out ahead of it and just be clear and honest rather than hope it won’t become a big issue. That means telling everyone not just people who follow Twitter, it’s a fraction of the user base.

Worse affected will be those may now be in overdraft or have gambled more than they can really afford due to this. Whilst some will make up a problem to try to wheedle some cash out of FI, there will be genuine difficulties caused by this for some. It’s FI’s fault and I think they are going to have to suck this up and reimburse/compensate people for any reasonable loss suffered.

It might cost a bit of money, but it will cost less than a hit to FI’s reputation which is priceless.

Liam

Even though this hasn’t happened before it feels a bit like deja vu. To be fair, they’re not the first company to have a payment issue, and sometimes these things can’t be helped, but again, it comes down to communication. Luckily, I wasn’t depositing at this point so I wasn’t impacted but from those I spoke to it was a pain, and to have three times the amount you want go out of your bank, especially considering the size of some of these deposits, it’s pretty bad. Again, I can’t comment on how well it was dealt with for those that it happened to, but the fact it was never actually communicated as an issue by football index is shocking.

They’re happy enough spamming my notification when someone’s up 25% or for other “good looking” pieces of info, so I don’t see why one couldn’t be sent here, or even, if it was that bad, suspend deposits. At least that way it would incentivise those that are fixing it even more so to get it sorted, but letting people continually be done by it isn’t right.

For a company that’s had to do a lot to prove it’s not a scam, this was a poor move, because I, as many of you, will know it’s not a scam but if you’re a new user and that happens to you, you ain’t coming back. Hopefully a learning curve and something that won’t happen again, but they can’t hide behind “let me off I’m a small start up” forever!

FIG

I think the sooner FI roll out their new tech stack, with a fresh website and app build the better. There seems to be constant issues whenever an update happens. Now, I don’t think this is due to lack of testing or anything like that- more so old, legacy tech that FI are building layers on top of. The double deposit thing is a real worry. Discussed on the latest pod, I wonder how panicked new users (who were on the fence with FI to begin with) felt when they saw double, triple or quadruple the amount of money they’d allocated to their punting fly into FI. I think this panic would be far greater than the panic one feels when a player they own is falling. There’s also the comms side. There’s two situations here. 1) FI genuinely thought this was an isolated or semi-isolated incident, where not that many traders were affected. 2) They knew it was an issue when releasing the new app into the wild, and just didn’t communicate that a solution was being found. I think it was probably situation 2), and that traders being vocal on social media maybe forced their hand. I think maybe they feel that if they don’t communicate it, less people will know it’s an issue and they can kind of, sweep it under the rug whilst they find a solution.

I think in this day and age, the way digital companies market themselves, particularly from a customer services stand point- is to own your issues. If you mess up, own it- and tell us how a solution is being found. I can guarantee that 90% of traders will be over the moon with a shift in this direction. 1) Find the issue, 2) issue comms that you know it’s there, and how you’re planning to deal with it and 3) Fix the issue!

Research, Resources, Tools & Tips:

Audio Content:

• FigCast Ep 71: Buzzing Paul rejoined me, and it was an excellent show. Conflicting opinions galore, and some very numbery sections….what more did you expect with Paul joining haha?
• FigCast Ep 72: I really am being spoilt for choice with guests these days. I was joined by FPL Addict (Chris) who I met at the last trader meet. It was a really, really enjoyable chat!
• On my other podcast, the State of Play- we spoke about Monchi going to Arsenal potentially, the future of Juventus and Allegri, whether or not Ramsey is good value for money for Juve and finally we profiled rising Burnley star Dwight McNeil.

Video Content

• I’ve kept up my reasonable weekly streak of videos going….I made a video about In-Play trading- check it out! It goes through my top 5 tips for trading in play.
• Q&A Episode 2: Thanks for all your questions! I discuss Market Cycles, Missing the Football Index Boat & Being Rational
• If you need the share split explained, go no further. A few weeks back when it was announced I made a video describing what it is and how it works! Watch here

Articles, Reading & More:

• As mentioned last time FI Trader launched a members area to his site just a couple of weeks ago. The first reviews are in and you can check out what members are saying and more details on the site here. Check the reviews out
• IBWM reviewed 100 players
• Great thread by the awesome Zach Lowy on his top 60 breakout stars this season
• Our very own FI trader did a written Q&A here, hosted on my podcast website
• Liam had a great conversation with Ryan P about using and the success of a transfer strategy, check it out here

Have a great couple weeks trading. (next time you read this we’ll know what the SS announcement is!!)