What is a good payout ratio for a fantasy football league?

Well 100% is the best you can probably hope for and this is where every dollar that comes in from entry fees goes out in winnings to players. This is more than likely a local league that uses a free website like Yahoo or ESPN, has its own software for conducting the draft live or does the draft online and has a traveling trophy or no trophy to award. In this case, all of the money can go to payouts. 12 team league with $20 entry fee and the winnings should equal $240 (12 x $20).

Be leery of any payout over 100% because that company/league is losing money. That cannot happen forever.

Reality is a little different. Even in a local league, most buy a draft board/kit ($30), trophy ($30) and some pay for league management services ($60+) at different websites. So that same $20 12-team league now only has half of its entry fees for payouts $240-$120=$120). Thus it has a payout ratio of only 50%. Arg!

Many online "Money" leagues have a 80% payout ratio or more. The more you pay to enter, generally the higher the return or payout percentage because the company running the show can deduct their expenses from the larger pot without hurting the percentages as much.

Example, 12-team $125 entry league
Entry fees $1,500
Company costs: Management software for league ($100), ad costs ($50), salaries ($100)=Total $250
This leaves $1,250 for prizes or 83.333% of entry fees after cost.

Now use a $500 entry league, $6,000 entry fees minus $250= 95.8% payout. Again in reality more like 88%. The really big money leagues payout 90+%.

Rules of Thumb:
-The more you pay to play,  the higher the payout percentage should be
-80% is a good industry standard for leagues that pay winners only and do not contribute to a overall prize
-Watch how the payout is distributed.
Is it cash? (Some offer cash in lieu of entry fees for more leagues next year)
Is it vouchers for more entry fees in same league next year? (Not as good a cash IMO).
Does it all go to the one winner (Winner-take-all) who won due to a single game championship?

See 2012 rankings in Fantasy Football Almanac 2012!

Fantasy Football Guidebook (2nd Edition): Your Comprehensive Guide to Playing Fantasy Football ($19.95) http://www.amazon.com/dp/0982428650

Fantasy Football Tips: 201 Ways to Win through Player Rankings, Cheat Sheets and Better Drafting ($10.95) www.amazon.com/dp/0982428669

Fantasy Football Basics: The Ultimate "How to" Guide for Beginners available ($10.95) at Amazon http://www.amazon.com/dp/0982428634

Fantasy Baseball for Beginners: The Ultimate "How-to" Guide ($10.95) www.amazon.com/dp/0982428693

Fantasy Football (Soccer to Yanks): The Ultimate "How-to" Guide for Fantasy Football/Fantasy Soccer ($14.95) http://www.amazon.com/dp/1936635011

Fantasy Hockey: The Ultimate "How-to" Guide for Fantasy Hockey Players ($14.95) www.amazon.com/dp/1936635100