Sport Stock Market Business Plan Orpster 737 Comstock Avenue Syracuse NY 13210 (413) 244 8495 Prepared by Rehan Hussain and Austin Williams This document contains confidential information. It is disclosed to you for information purposes only. Its contents shall remain the property ofOrpster and shall be returned to Orpster when requested. This is a business plan and does not imply an offering of securities
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The stock market will open one week prior to the first scheduled game of the NFL
season and end at the conclusion of the Super Bowl.
User interaction will be facilitated through downloaded real-time software as well as the
mobile application. Stocks will be rising and falling in front of the users eye based on all
of the metrics. For example if a quarterback throws an incomplete pass, you see theincomplete pass as well as the share drop via the software. Through this, players stock
values will reflect their current in-game performances providing users the ability to buy
and sell league players throughout the course of the live games.
At the conclusion of the final game of the week, all shares will be converted into a
monetary amount that will then be credited to the users account. The stock of each
player will then be reset to the original algorithm plus the last games performance.
The user will then have the choice to buy new shares based on their speculation for next
weeks games, or cash out from the market pool if they please.
Each user will be able to deposit real money into their account and buy any shares of athletes.
This stock market will create a large monetary circulation. The users whose speculations
were correct will take money away from the market. The losers money will be put back
into the market and it will be circulated. Orpster never takes money out of the market
The Following figures show how the market and user will interact as well as how capital
Through intensive research Orpster has come to the conclusion that our target market
will be males age 18-34. Our shares will be aimed to attract the college student. The
shares will be valued at an attractable price so that the typical consumer can try to
make a few hundred dollars on weekly basis. Millions of college students participate in
fantasy sports competitively. Our research also shows that over 500 million college
students gamble on sports annually. This could be a new incentive to use their skills andspeculations to make educated investments instead of gambling.
b. Market Analysis
While fantasy sports games have existed in the UK since the early 1990s, it is in America
that the product has become an enormous business. The United States fantasy football
market is already an immense one. The games are extremely sticky, combining the
competitive pay-to-play and reward tournament provision of rich sports and related
content.
In the United States alone, over 29 million people currently play fantasy sports. Theleading operators such as Yahoo, ESPN, and CBS experience millions of users per month
visiting their websites, spending an average 30 minutes per user session. The average
person spends around $300.00 a year on fantasy football according to the Fantasy
Sports Trade Association. This clearly proves that the average user is willing to invest
their capital based on their knowledge of pro athletes.
In the United States, NFL draws the biggest fantasy sports audience, followed by the
NBA and MLB. The importance of the fantasy football product such as this innovative
sports market is that it turns sports fans into even bigger sports fans. Much of the value
of the fantasy sports product is that it is highly content driven. The major fantasy sports
operators provide daily news and stats updates as well as providing in game and historicresearch tools. This depth of up-to-date information is extremely valuable to the sports
enthusiast and drives further information. Now imagine if the typical user could put
their knowledge against the market to make money. Orpsters uniqueness is something
that has not been seen before, it eliminates all economic factors. There are only two
factors, the users knowledge and the players performance. This has the potential to
attract millions of users as an incentive to make money.
c. Demographics
The typical fantasy football user is anywhere from 12-48 years old. The strongestdemographics are users from 18-35 years old. 93 percent of users are males and 91
percent are white. Our intensive research shows that there are over 29 million fantasy
football participant. This makes up around 11 percent of the US population. Also there
has been a 69 percent growth rate since 2003. Orpsters target is the primary fantasy
users which are from 18-25 which is composed of college students.
Fantasy football participants spend about 3-4 hours per week managing their teams.
That is around 30 minutes per day managing their teams. This is all predominately done
over the internet. We took a survey of 200 respondents and these are the results.
y Only 15% of respondents said they would not use our service
y 90 percent think they know just as much if not more about fantasy football
than anyone in their league
y 60 percent spend anywhere from 30 to 60 plus minutes playing fantasy football
y 85 percent play fantasy football for money
y 25 percent spend more than 60 minutes a week
y 80 percent would spend anywhere from 30 to 60 dollars a week on Orpsters
services
d. Company Strengths
Orpster has positioned itself in many ways against competitors. There is no real time
software or apps for the iPhone or Android devices similar to an E-Trade or Scott Trade
for the sports stock market. The software will be the core of our firm. Again it will show
all of the NFL Players stats real-time while the game is going on, and their share rising
or falling respectively to their performance.
Also unlike the others, Orpster incorporates no economic factors in the trade. We have
simplified this to the fantasy user. The stock rises and falls strictly based on performance.
There are also only two options to simplify this, the user can either buy from the market
or sell back to the market.
Orpster also believes we have a very good marketing strategy as of right now. The
Orpster team has very good networking at this point and we strongly believe we can
market this to its highest potential.
III. Competition
a. Direct Competitors
Starstreet is the primary competitor with the most similarities. The issue with Starstreet
is that this firm incorporates too many economic factors that push away the fantasycrowd. They limit the amount of shares which incorporates supply and demand. This
causes the share to rise and falls based on economic aspects as opposed to strictly
performance. The problem with StarStreet is that they do not understand that the
fantasy user is much different than the day trader and they try to combine both. This is
a huge mistake because the typical fantasy user most likely does not know about IPOs,
supply and demand, selling short or going long, and other economical aspects of their
site.
b. Competitive Advantages
Orpster has numerous advantages over these competitors. Orpster will create real time
software and application for the iPhone and Android devices unlike any other
competitor out there. This software will provide real time statistics as well as scores of
the current games. If our user does not happen to be near a computer they can access
our product through an iPhone or Android platform regardless of their location. The
share will drop or rise in real time before the users eye depending on the players
performance. There are also no economic factors that affect the share of a player.
Orpster strongly believes that when factors other than strictly performance affect a
share, it pushes the fantasy user away .
Our interface will also be very simple for the consumer to use unlike some of thesewebsites. It will be geared towards the fantasy user not the day trader which is a vital
mistake competitors have made.
On Orpster there will be a large amount of capital spent to get the market started which
will be the core of the monetary circulation.
IV. Marketing Outline & Sales Strategy
a. Company Logo
b. Marketing Strategy
The Product
Orpsters product will be the ability to purchase virtual shares of players that the user
thinks will do well on a weekly basis. Orpsters marketing program will be implemented
in conjunction with the beginning of the NFL Season in 2011. A variety of marketing
tools and programs will be used to reach Orpsters primary customers, college students
and just graduated men. Described below are Orpsters initial marketing tools, positions,
etc.
Social Media- Social media has become one of the most powerful ways to get your
message out there. Utilizing Facebook, Twitter, and other social media tools are a very
effective and inexpensive way to market any product. Creating a business Twitter andFacebook page with updates and upcoming events will create a lot of conversation.
Print/Online Ad Space- We plan to publish on the inside cover of Fantasy Football Index
Magazine. This is the largest fantasy sports publication in the nation and will cost our
firm $1800.00.
We also plan to utilize banner advertising on popular websites that may attract our
market such as barstoolsports.com, bleacherreport.com, and various sports related
websites and blogs.
Campus Representatives- Having a physical presence on some large campuses to
perform duties such as marketing materials distribution is very important to us. Theywill be distributing free marketing tools such as t-shirts, shot glasses, etc.
Networking and Word of Mouth- Each member of the Orpster team has been
participating in fantasy football for over 10 years. Whether it has been with family,
friends, or coworkers we have all utilized fantasy football. Each one of us is also the
demographic we are aiming to attract, meaning our networking and word of mouth of
Orpster is also going to be a large determinant of its success.
Travel/Promotion-Orpster will purchase various products and distribute them for free
such as T-Shirts and hats at popular locations such as bars and sporting events. Orpster
will start with appearances in the northeast in large cities such NYC, Boston,Philadelphia, Hartford, and many others.
First 500 Incentive- Also as a marketing tool, Orpster is campaigning that the first 500
Users will receive a free 20 dollars to try our software out. We believe that once those
users make money off of the market, word of mouth will spread and it will attract that
many more users.
Pricing
There is one primary component that will go into the pricing of the shares. The
performance of the player based on the previous 2 years will determine their prices.Again this market is geared towards the college student and it is essential that the
pricing is attractive to them. Therefore, as of now, the shares will vary from $5.00-
$25.00. The better the player is the higher the share will be.
As of right now Orpster needs to fulfill several positions
y Marketing Team/Campus Reps
y Web Designer
VII. Milestones
a. Goals
Our goal at Orpster is to create a new market for the fantasy sports world. We want to
take all 29 million users and reward them for their knowledge and speculation. We want
to take fantasy sports to a level that it has never gone to before. As college students theOrpster team knows how hard it is to make money in any way shape or form. It is tough
to get a job while taking 18 credits in Finance. So we thought lets create an opportunity
for the average college student to make money on Sunday game day. Using their
knowledge correctly they can make themselves good money weekly.
Total Expenses $280,000 $595,000 $940,000 $1,540,000 $1,790,000
Net Income $316,000 $1,265,000 $2,780,000 $5,900,000 $10,610,000
*Orpsters business model is based solely on the expenses listed in the income
statement. All projected revenues are reflected by net income.
c. Expected Growth
Orpsters growth could be extremely larger than the numbers shown above. Orpster is
expected to grow at a very fast pace. We believe that the fantasy market is a very
addictive one. Adding incentive to make money off of it just made it more addicting.
Again there are 29 million fantasy users. If by year five Orpster can tap into even 1/29th
of them, there will be average revenue of $24,800,000 million dollars yearly in revenue.
IX. Exit Strategy
The investors that provide the capital that is the subject of this document will have
several exit opportunities available to them if Orpster does not succeed. Although, it isimportant to know that the ultimate goal of Orpster is to stay private and create
maximum profitability. Orpster hopes to see a great amount of profitability and success.
We see the potential for great cash flows and the ultimate goal is not to exit. It is the
owners' intention to run this business until they are ready to retire or have decided to