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Online sports market turns athletes into stocks

New Internet venture could make fantasy sports a whole new ballgame

SAN FRANCISCO - Sports fans already invest considerable emotion and angst in professional athletes. Now they can take that obsession a step further, trading on the pros’ performance in an online electronic market.

If the new Internet venture succeeds, it’ll be a whole new ballgame for the gambling-driven pastime of fantasy sports, which already has up to 20 million players.

Launching Monday, ProTrade will treat professional athletes like stocks to be bought and sold, initially in a theoretical currency. Cash prizes will be awarded to the most successful investors.

The value of a blue-chip quarterback such as Peyton Manning of the Indianapolis Colts will be determined by a community of traders competing to identify players most likely to contribute to the success of their real-life teams.

In this bottom-line approach to sports, teams are known as investment portfolios and the real-life athletes get their own ticker symbols. Manning’s symbol is PMANN.

“It’s going to take fans to a whole new level of fantasy,” predicts Bill Walsh, the former San Francisco 49ers coach and a member of ProTrade’s advisory board.

ProTrade initially will be confined to trading NFL players, but the San Mateo-based company expects to add the NBA and major league baseball after working out licensing agreements.

“Our mission is to change the way people think about sports,” said Mike Kerns, a ProTrade co-founder and former understudy to venture capitalists and sports agents.

The endeavor drew its inspiration from the 2003 Michael Lewis best seller “Moneyball,” which dissects the statistical analysis Oakland Athletics general manager Billy Beane used to obtain players he considered undervalued by the rest of the baseball market.

At the outset, basically for the first half of the NFL season, no actual money will be exchanged in Protrade’s market; each participant will get a virtual stake of 25,000 coins to invest.

But capitalism will fuel the market’s activity, with weekly prizes awarded to the portfolios with the best investment returns. Later this year, traders will be allowed to create their own competitive leagues and set their own entry fees, with a $5 minimum per entrant.

ProTrade will hold all the entry fees in escrow and then distribute jackpots, minus a 2 percent to 3 percent commission, to league participants who generate the best investment return. ProTrade hopes to make money from those commissions and advertising on the site.

The potential target audience is huge. About 15 million to 20 million people already compete in traditional fantasy sports leagues, including myriad competitions waged through such Web sites as Yahoo.com.

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These fantasy leagues, which steadily have grown during the past 20 years, usually consist of several friends or co-workers who ante up an entry fee before drafting the premier players in a sport. Points then are accumulated based on the statistical performance of the athletes on one’s roster.

In an NFL fantasy competition, points typically are based on yards gained, with bonuses for touchdowns and field goals. At season’s end, the jackpot goes to the fantasy team owner with the most points.

Statistics are important in ProTrade, too, but the system tries to provide more context by analyzing the situation in which a play occurs. As an example, a 3-yard run on fourth-and-2 would be worth more than a 3-yard run in a third-and-20 situation.


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