01:06

I will have to leave it there as I am getting tired after a long and no doubt emotional night for many. 

Options will be limited tomorrow. Most of us will have little choice but to hold what we have or sell for absolute rock bottom.

The thinking behind Leagues is a mystery. It feels like an act of vandalism. “Designed to drive maximum engagement and enjoyment for our traders”. It maybe true for new users and if someone rolled up to FI’s shop front a week from now they might find themselves a very attractive value proposition. 

But will they trust a company that is being endlessly beaten up by unhappy former traders wherever they set up their stall online or in reality? 

One of the strongest assets FI had was a really passionate trader base who loved the product. Smashing 75% or more off the rational value of their most popular assets… how do you possibly justify that, I would love to have that conversation with them.

Sigh. We soldier on. I shall be back on Sunday as usual. I will also be here tomorrow if anything happens that is worth posting about etc – though I suspect it will be a day of watching rather than action. 

Best wishes to all. Thank you very much for all the messages of support tonight, if this helped just one person make sense of this at all it was worth the time.

All the best,

Adam.

01:01

Now when we get to our unpopular players that are undervalued and actually, like a Tchouemeni or Badiashile at Monaco. Immobile. Belotti. Or Odegaard. Morata. Depay. Olmo. Just a few examples here of players that in all likelihood actually benefit from this new system.

They won’t be put in the shade by the big hitters anymore – they can win, and win more regularly and keep gaining some traction all be it slowly and much less explosively than we are used to. 

(I will have to cover the impact on match day trading another time but how the hell is anyone chasing a winner now when there are up to 36 of them!? Good grief). 

There is a bit more hope for those of us holding this sort of player. Rock bottom prices are not news in this area of the market. It will be less shocking, and if there is an area of the market I think will fare the best in the weeks ahead, it is probably this one. 

So, I still don’t expect to be able to sell anything including in this area tomorrow. But I feel slightly better about holding them knowing they are under a rational price even in the new structure. 

00:46

So. What can we expect at market open tomorrow and what can we actually do, if anything?

It will be a bloodbath, almost certainly. The only way I could imagine it not being so is if FI had big market maker money lined up to prop up the market and leave traders pleasantly surprised. But I would not count on it. 

Obviously lots of people will want to sell but the reality is almost nobody would be buying and even if anyone bullish was left out there I would say why would you go in tomorrow? Better to let things settle after this earthquake.

So people will make desperately low Offers on the Blue Button, dragging those prices down, but they aren’t going to be matched, certainly not in the numbers to force them upwards again. 

We will not be seeing all but the lowest red button Instant Sell prices. Not unless there is some heavy intervention from FI which I doubt.

So should you even bother trying to sell?

We could give it a go but with a premium like Bruno or Sancho the demand for selling is going to be so high. If we take the £3-4 price ceiling I have suggested as a rational level… well. That may be true but it won’t matter tomorrow. People are not going to be rational.

At least, provided of course, you think FI will recover from this (And Leagues and this spread dividend structure gives me doubt in a way none of the other shenanigans really have) then at least you can batten down the hatches, collect some dividends, and wait for better times.

If you have totally lost faith with FI and just want out… you can try but are unlikely to be getting that wish unfortunately. Not unless you take absolute rock bottom prices. And that may not be worth doing because of course FI may recover and ride again. 

So you have to work out how that feels for you and it is a personal decision. Let’s say that in order to sell Bruno tomorrow you have to do it for £1? Do you do it?

15% or so of your current £7 is better than 0%. But then if FI recovers you know he might return to £3-4 and you’ll take dividends on the way. And I guess the answer to that comes down to how much you need the money. 

If saving your 15% is important and you need it for rent etc then you’d probably think maybe I can’t afford to bet on a recovery and you have to take what you can. Really tough decisions and I am no financial adviser, I am just offering my opinion.


00:37

NASDAQ. I don’t really care about this at this stage. It is a nice, glitzy marketing thing but all traders really want is a backend that works and a frontend that functions. As far as we know, a new platform is under development that probably takes care of much of the practical issues. 

Media Monitor. Again, just not a major issue. It is far from perfect but FI ticked by just fine with a far from perfect media system for many years. Not a priority.

Liquidity. They are trying to get Market Makers. We knew that. This is probably the first admission that they are finding it hard to get people to fill that role but that is nothing new we guessed as much. 

Traders will now be able to bid and offer on the same footballer. Yep. Fine. Minor increase in liquidity but no game changer. A tool for savvy traders to play both sides of a market. Next.

Market making policy. This might be helpful. “A solution that is realistic and sustainable”. So, we can read – don’t expect massive intervention but there might be something. They have “set an object for their primary market maker to trial a bottom up approach…”. 

I would take this to mean what the market maker should always obviously have been doing from day 1 – placing bids, not artificially pumping blue button prices only for that to be frittered away into nothing. 

A good market maker needs to be competent to support the prices of players that deserve supporting. If this language is a hint at that, it is a good thing. 

Offer ceiling. This is just frustrating. Allowing traders to set unrealistically high offers will simply serve to pump the Average All Offers price which has already become wildly inaccurate. This undermines any trust in the AAO and makes it a worthless number. This is not an improvement, it is a mildly irritating detriment.

00:27

Dividend reduction. Yeah. Never popular – I think if handled in a not utterly incompetent manner a rational person could be convinced why this was sensible if it meant stability, etc etc. The claims of having it under review and hope to increase them again… well. Not worth a great deal to anyone right now.

Introducing Leagues. Interesting player pose and expression – it’s almost like they anticipated my reaction to this news which was VERY similar:

This is the one that just mystifies me. It flips the whole platform on it’s head to the detriment of almost all existing users. Shows absolutely no respect for those who have stuck with them, to be honest. 

And the only possible explanation is that they are burning it down in some kind of “creative destruction” so that new users can come along one day and take it forward, perhaps from the UK (if people think the product is now more simple as they can just play in the EPL) and maybe abroad too.

But I ask thee FI. Are you going to get the oxygen to do that if you have turned your once loyal traders into people who want your blood and will hound you across the internet and beyond? 

Highly. Highly questionable decision. Without doubt, the worst decision from FI I have ever witnessed.

00:16

What’s next? I am going to go through the announcement one more time and see if there is anything relevant of note to discuss tonight. Then I’ll finish with some thoughts on what to do when the market reopens tomorrow, though I cannot promise to have many great options.

00:11

This is really good from @BobsYourUncleFI

This obviously paints the picture at the premium and high performing end – the more you can win from the old system – the more you have to lose. 

So these reductions across the board will be right assuming you replicate last season exactly – as we know there is a lot of luck involved in who wins on any given day). 

But what we should also include is that the dividends are now spread over a wider pool – so whilst these elite players are losing out… it’s a little bit like a forest getting it’s biggest, most dominant trees being chopped back – there will be more light for the smaller trees under them who were previously dividend starved.

So, there will be plenty of players who will benefit from this change, along the lines of those I mentioned below. Particularly where they are better than most people really know about. So, there are lots of these in Scouting at the moment, and ironically, it is these “unpopular, underrated and underpriced” players for want of a better term that come out of this the best.

Not that this is good at all! But It is well worth being aware of what kinds of players may not be badly off under this new system.

23:39

To sum up our run through some player examples then.

Premiums. It’s bad. They had the most to lose because expectations were highest, and without huge payouts it is really hard for any one player to distinguish themselves to an extent where they can command the £7 or £10 price tags of before. 

Just not going to happen, not in this dividend structure. Maybe one day, if conditions improve as per the Q+A they will look to bump things up again. They probably have that intent but it remains to be seen whether they will get there.

I think the rational range is £3-4 at the upper end but bear in mind that people will be far from rational in moments like this – in a panic the price could go lower.

For our middle of the pack, decent and currently popular player like Kroos or Mount… it’s a hit for sure but not a catastrophy. I would fully expect people to just want to sell anything and everything rationality be damned. But if holding a player like this the price eventually settling in that £1.50 area would be reasonable.

Where it gets a bit more hopeful is the decent but currently unpopular crowd, there are many of these. And indeed, targetting this kind of unpopular value as been a focus of the site for sometime (I am sure you noticed). Goretzka is one example as below.

But I would also highlight someone like Tchouameni, or Badiashile from Monaco from recent Scouting. Or some of value Leverkusen players like Bailey, Amiri, Diaby, Paulinho. Andre Silva at Frankfurt.  Olmo at RB Leipzig. The Scouting area is full of these sorts of examples who are significantly undervalued even now as many prices were already at rock bottom.

The Leagues system will indeed reward a bit more knowledge of some of the more hidden gems like this. As FI say in the Q+A… you could choose to focus on one league and ignore the existance of others… but obviously that will be far from optimal. 

So, with these sorts of players, they will get more opportunities to win and win more often, generating momentum and interest.

If there are winners from this absolute toxic waste zone of a day, it is in this area they are to be found.

23:28

So we come to the last example I picked out. Goretzka.

He is a bit different because he is unpopular but I would actually expect a similar level of output to Mount based on current form. He is flying the flag for the decent yet unpopular players here – of which there are many.

He is a little older at 26, but no so old that you have to be really savage with price reductions, he is going to be around for 3-4 years to come most likely.

The main difference for Goretzka is the price was savaged already. Which is why I have used him as an example.

He’s a good player but has had injuries, a little bad luck, was left doing the dirty work when Kimmich was out injured, and generally has just not made it to the top of the leaderboard too often. But in terms of his underlying numbers, he’s a solid player and I fully expect him to improve and get a bit more credit as time goes on.

So with a similar output for Mount, but without his bit of media, I’d suggest a reasonable price for Goretzka might be £1.25 or maybe even a little higher.

And this is an interesting example as in contrast to the others – he is already well under this, significantly so.

So there is some hope here, for anyone who is despairing.

23:15

Alright back to Mount. 

He obviously isn’t quite on the level of Bruno or Kroos but as he has proven to most recently he has been improving and is by now a regular contender. 

Probably unlucky, actually, not to score higher more often than he has. If he maintained current form, maybe 10-15 competitive scores a season, perhaps netting him 15-25p? We can rationally give him a smattering of media being a young English attacking player in the EPL. Let’s call that 5p a season.

He’s not doing as well as Kroos for racking up the dividends but he has the advantage of youth. And also people can reasonably believe he can get better, too.

Given that, somewhere around £1.50 would seem reasonable for Mount if he maintains current performance level.

Not great, but no disaster here.

23:07

Actually I’m not done with that last question.

I think a dividend decrease we could have dealt with pretty well, in the end. Obviously it wouldn’t be popular but a sensible person would get why that is the case.

It is the Leagues thing that really offends and just drives an absolute coach and horses through the whole fabric of the product. I really, really struggle to understand why you would see EPL and Ligue 1 players etc competing as the issue that is holding your product back. It isn’t.

And they have just made restoring FI’s feel good factor about 15x harder with that change. I don’t really know what to say about that. Unless they have enough German users lined up ready to step into the gap left by upset UK users?! But I strongly suspect they do not.

22:57

I said I’d take some member questions but I have neglected to do so with all there has been to cover. 

Here is one:

Q: “I’m still in shock after the announcement so excuse the simple question: ‘do you think FI management have any idea how their product works?’
 
I ask because having stopped IPDs (sensibly) to narrow the spread of winning players on the platform and focus PB (FI’s alleged ‘core focus’) on a smaller number of players, with leagues they have just blown it wide open again.”
 
A: Yes, me too a bit. And I quite agree – the removal of IPD was a great step that I had been calling for for exactly this reason – if you want liquidity, and that has been the main issue, you need a market that is narrow rather than wide. If people have too many choices the liquidity is spread too thinly.
 
So you think you have a direction of travel from them. But maybe we just assumed they came to that answer for the right reasons? Maybe they just came to it for a reason of their own?
 
There *is* an argument here that with Leagues players do not need quite so much individual support and are capable of existing perfectly happily at lower prices (though existing holders will not agree). 
 
So whilst we now again have a wider pool of players I would still say 1) the big hitters are still going to dominate and 2) individual players no longer need quite so much money to support their rational value as your average “decent” player is no longer expected to pull in 50-70p per season but rather 20p might be considered a very good haul.
 
If you were to strip away the obvious nuclear meltdown of negativity from current users. If you were a new user walking into the platform tomorrow, and hadn’t heard existing users complaints, you would probably be spotting some extreme value and not see all that much of a problem.

However. The question for FI is… can they reach that point where they can get enough new users interested whilst the old users are so dispirited and will dog them at every turn?

22:45

So Kroos stands to lose less right off the bat than a premium – because nobody expects him to win media anyway. So the media reduction is not relevant here.

Kroos has hauled £1.34 in dividends so far this season. Which is crazy, and probably an overperformance, much as I rate him. As a player who can really crank up the numbers he benefits a lot from Star Player. So this sort of explosive player loses out a lot from the massive reduction of Star and the spreading of that dividend pool across a wider group.

Where he does benefit is that his odds of winning in La Liga are very, very high. He may well win 12-15 times. So similar to Bruno, we might expect something like 30-40p over a season for him now in this new system. I wouldn’t say that is directly comparable to his current haul of £1.34 already – I think this is a particularly good season for him.

A big reduction. Long story short.

Yet, he is still racking up some decent dividends. So you could get to around £2 to £2.50 HOWEVER as an older player this must be factored in.

Older players are going to now be under more pressure to return more in the time they have left, and that will reduce the price you can rationally pay.

I tend to apply a 40% reduction for 28-31 year old players as opposed to those under 25. So, we may not want to pay more than £1.30 to £1.70 or so for Kroos now at most times.

Obviously, that can spike up or down depending on what is going on. If he has a good run of games including a CL quarter final he is likely to win it might exceed that because people might get excited.

But as a sort of middle of the road ballpark value, £1.30 to £1.70 would be a reasonable range or just £1.50 for simplicity. Assuming of course you think he has 2-3 years at the top left in him.

And in all these numbers – I am not saying he is therefore great value or the best value amongst anything you can pick – just that you wouldn’t be raving mad to be holding him at that price.

22:35

Alright. That said. Let’s move beyond the Premium’s who will certainly be hit the hardest and see what happens with different types of players. 

i.e our currently reasonably popular performance player that people know are good, let’s use Mason Mount and Toni Kroos. 

Then we could look at some value performance players who are showing strength but most haven’t realised – we could go for Leon Goretzka and Chiesa.

22:17

So. I felt I needed to get that £3-4 marker in the sand before I could start making sense of this market again. But back out of the numbers for a while and to the big picture.

I’ll try to focus as always on what we can actually do here and leave the understandable venting to Twitter. But this is just disastrous news for a wavering group of traders and there is no way to sugar that pill. 

To throw us with possibly the biggest change to the way FI operates I can remember under the guise of a simple, harmless Q+A… just suggests that they have been scrambling hard for the last week and this was not exactly planned, more a reaction to recent events. 

Whilst I have to work hard for the rest of the night to try to get some kind of handle on what prices should be going forward and what value even looks like now… these are just details. 

There is little doubt that most will be trying to sell hard in the morning if they can and I don’t think any amount of rationalising between now and then will change that. 

We may be able to very usefully figure out some things – what should be sold as priorities, what can actually be kept as decent value going forward. And it will be very helpful if we can get there tonight.

But like I say – these are just details for now and I fully expect any rational discussion of value to be overridden by the anger and disappointment.

 

22:06

Obviously, that’s bad. Certainly not the £12 target a rational human could have before.

But £3-4 ain’t nothing. He currently floats around £7. 

£3-4 is low but for a while there I thought I might end up lower. 

We are also looking at one of the players who has the absolute most to lose from these changes.

There will be other players, further down the food chain, that will come out of this much better in terms of rational value.

Whilst dividends have been reduced and this new League format makes payouts more frequent yet much smaller – as we know – many prices were way, way below where they rationally should have been.

So, not all players will be taking the haircut that Bruno and the rest of the premium crowd will.

 

22:05

£3-4 for Bruno. Rationally speaking. And not just for him, this is probably fairly reflective of what the upper end of the market can really expect to be. Or it is as close to the number I can get working very quickly.

I am not sure how I feel about that number.

 

21:59

So, at the end of all that, and I apologise for how slow I am tonight because I am now operating in a world that just got tipped on it’s head… 

A rational human could actually get to a reasonable price for Bruno of around £3-4.

21:54

Bruno pulled 93p in media dividends this season to date. We might expect him to get… 20p for that exact same output in this new structure?

So. Stack expected performance on top of expected media so far and we get close to 50p for the season to date in terms of expected dividends. And there is a third of the season to run (and it is the best third of the season with UCL/EL knockouts ahead etc). So you can optimistcally make that 80p perhaps assuming a decent run in the Europa. Not including Euro 2020. 

 

21:31

Based on his scores this season, which has been a good season, Bruno might have won 12-15 times already in the new League only system (combination of 1st and 2nd places). But he’s only generating 1-3p each time. So thus far this season, an acheivable range for performance dividends for him might be 20-36p or so, probably more like 28p.

In the existing system? He won £1.06 in performance dividends so far this season. A massive total he could not hope to get near now. He could reasonably expected to haul a quarter of them. This might not be so bad when we look at some other players – as we are looking at a player who has had a brilliant season and dropped on some very big wins. 

So it won’t be that bad across a wide range of players. But a reduction in output of around 75% in performance dividends for Bruno is not a good headline to start with.

Media might save him a bit but then media dividends have been hammered here, an absolute fraction of what they were. Which is just terrible news for premiums in general. 

21:31

Sorry, bear with. Having to do some nightmare maths here to try to get to some kind of rational price for Bruno and I don’t want to get it wrong.

21:21

Based on what we know about average winning scores on old Bronze and Silver Days, a winning total in midfield in a League on a Bronze or Silver Day is likely to be around 180-210. Defence and Forwards very slightly lower, perhaps 170-200. 

So I would suggest that we now take 180-190 as a very rough winning bar for now on a new Bronze or Silver Day. We’ll be able to adjust it for leagues later (it’s going to be a higher bar in Ligue 1 I suspect and  lower bar in the EPL most likely). New Gold Day’s, whenever they arrive, might be somewhere around 220-230 in midfield or 210-220 in defence/forward. 

Winning star player should be just as hard as it is now, but for a much smaller reward (brilliant. Which makes owning the big outright winner less valuable).

21:06

One thing that really messes up the “Leagues” system, or maybe doesn’t if you are FI, is the fixture calendars this season. They are very disjointed so are going to result in a lot of Silver and Bronze days. And maybe not that many Golds.

In a normal season we likely see more games on the same day. 

So going back to our Bruno example, he obviously has an incredible chance of winning on a day with just 1-7 games in the EPL. But it will be the 2p and 1p range rather than 3p. 

So, a job for a little later is to do the math on that and work out how much a player can really be worth, and try to re-establish some kind of rational price ceiling for a player in this new dividend structure.

20:56

It strikes me that the plan here is to just to give a short, sharp shock in a way that will set FI up for the direction they want to go – i.e more countries eligible and apparently more attractive to UK customers who may feel they don’t need to understand Ligue 1 or whatever.

I get that logic in isolation.

But I would seriously question whether they will get away with that.

You have to carry your existing customer base with you and if you don’t, such ambitions may be buried under relentless social media negativity from unhappy users. Many of which stuck with them throughout some very difficult times.

 

20:56

It strikes me that the plan here is to just to give a short, sharp shock in a way that will set FI up for the direction they want to go – i.e more countries eligible and apparently more attractive to UK customers who may feel they don’t need to understand Ligue 1 or whatever.

I get that logic in isolation.

But I would seriously question whether they will get away with that.

You have to carry your existing customer base with you and if you don’t, such ambitions may be buried under relentless social media negativity from unhappy users. Many of which stuck with them throughout some very difficult times.

 

20:49

… will current users care?

Particularly if you bought an elite player at a price where you thought you might win a 28p dividend next weekend and now, best case, it will be 5p!

My mind is still boggling here at the implications of this.

We have a world now where all I said about the need to concentrate liquidity in a smaller number of players in order to facilitate trading has just been tossed right out of the window.

This does the opposite – spreading liquidity thinner amongst a wider pool.

Yet. At the same time. Players don’t actually need that big of a price to be value. 

I am sure we will be able to look at a lot of players and call them rational value. 

I am less sure that anyone with a current portfolio is going to care. And people are going to be really, really angry and upset.

 

20:47

Continuing on the Bruno example. I was just looking at the number of times he might have won in isolation in the EPL.

Y’know. Obviously I need more time to really process this but my instinct is it may actually not be too bad as a value proposition. The better players are still going to be the better players, and should dominate their leagues.

Yes, that random mid-table player will have his big day. But we should still live in a world where the better players are hoovering up dividends on the regular.

This much is positive. But…

20:39

We need to do some serious maths to evaluate the impact of this properly.

Let’s take Bruno as our test case. 

In the previous system he can have a rational value of £12 or even £16 based on his ability to win the overall dividends across all 5 leagues often enough. Plus his media.

Now? He will undoubtedly win a lot more often because he is only competing in one league. And because there is a second place now too. That’s a plus for the holder.

But this time, he will only be winning 3p or 1p on a Gold Day, rather than 14p before. So it is just as well he will be winning more often because he will need to win 5-6 times to cover the 1 win he had before. 

20:32

Earlier this month I advocated removing Team of the Month and Match Day Extra. In favour of a tiered 2nd/3rd place payout. 

I got my wish. Yay? In normal circumstances this would be cause for celebration yet there are so many moving parts here it is hard to know what to make of it straight away. I suspect I’ll be here a good few hours.

 

20:27

If I have to guess the thinking behind this – they are trying to clear the decks to make the product attractive to markets outside of the UK – and also possibly more attractive to some UK punters who are turned off by the need for knowledge of foreign leagues.

20:22

This should in theory lead to a market that is much wider than it is now in terms of the number of viable picks. More players should have value. 

Yet, the very best of those picks cannot achieve the sorts of prices we are familiar with in that £7 to £10 and even £15 range. They just can’t.

20:20

Leagues is a really, really, left field move that is going to take absolutely everyone by surprise. 

Initial impression. Obviously – it makes a lot more players more relevant as with so much less competition, much, much weaker scores are going to win. 

So, those “IPD strikers” or Rodrigo style high baseline players? Well back in contention.

This does however hit the elites. I can’t see how some of the premium or elite performance players can really maintain the values we are used to seeing them at when they cannot dominate all 5 leagues and hoover up the dividends – it will all be parceled out across a very wide group of players with literally dozens of winners on a match day.

20:16

Lots to take in. Dividend reduction is a headline no traders have ever seen and whilst you can see how that has come about it is not something I thought would happen unless FI really, really needed to do it.

That headline alone, regardless of how we tot up the details later tonight and maybe even decide that it isn’t too harsh (or maybe we will) is just not good and will obviously breed negativity.

That however is probably temporary and in any case current prices are so low in many cases that the dividend payout is likely to remain pretty good at least from a rational stand point. The bigger change is actually Leagues and that is what I will focus on first. 

20:06

Huge changes here. Bear with whilst I go through it all. 

19:39

I’m still here. This is a very strange lead up to news and a later delivery than I have ever seen. Very strange because it just cranks up the hype and the pressure to pull something out of the bag so much more.

That would lead you to believe they have something worth waiting for. In my experience of Mike Bohan and FI in general… one thing they do know how to do is build up hype for an announcement. So I would suspect this is deliberate rather than incompetent.

I hope I am right.

18:48

18:38

Any minute now… I feel like a cricket commentator in that awkward 2 hours when absolutely nothing happens.

18:28

Alrighty well it looks like this week we will see some Q+A action and with that very long market suspension that has certainly upped the stakes! 

We are expecting something big now. Or…

17:08

Welcome to the Live Blog as we pick over the juicy bits from FI CEO Mike Bohan’s Q+A. Hopefully. It has to start soon. Right?

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