The Basics
Number of people. You can play with as little as 3 or as many as 12 (or more) in your league. March Madness has more teams (than pro sports) so it can handle more owners. For football, I'd recommend a maximum of eight owners, but it's flexible.
The starting amount. You can play with a fixed starting amount or variable starting amount. Since the payouts are based on percentage of the total pot, either will work. I prefer the strategy of the fixed starting amount and find it simpler for beginners. So I consider fixed the standard. See more on this here. The amount you put in the pot is the amount that you have to bid on teams. I've always played with a $20 entry, but that's up to your league.
The Auction
Logistics. You can hold your auction in person, or online in a old-school group text chat in a program like Skype. You need to pick an order (it doesn't really matter) for nominating teams (putting them on the auction block). And one of you needs to be the commissioner to run the auction and update the spreadsheet.
Bidding. When someone nominates a team, that person places a minimum starting bid. That same value is the minimum increment to out bid them. For football and other pro sports, this value is $.10. For March Madness, it varies by seeds:
1-2 seeds: $.50
3-4 seeds: $.25
5-8 seeds: $.10
9-16 seeds: $.05
Examples. Steve nominates Texas. In this hypothetical example, Texas is a 5-seed. Therefore, when Steve puts Texas on the block, he must do so for at least ten cents. He could start the bidding by saying, "Texas, 1.50." But he can't say "Texas, five cents." Rick ends up buying Texas for 3.80.
Then Jerry nominates a 1-seed Duke. He does so for the minimum of fifty cents. Steve's shouts out 1.00, the next valid bid. Rick jumps from 1.00 to 4.90. If Jerry wants to bid on them, the next valid bid would be 5.40.
Going, gone. A team is off the auction block when no one else wants to bid on them. Online, when it seems like the bidding has dried up, the moderator should say "Going", wait about 10 seconds, and then say "Gone."
A March Madness-specific rule. The 14-15-16 seeds rarely win a single game, and thus have little value. But they still should be owned. To speed up your auction, I recommend bundling those three teams by region. So someone could buy the Southwest 14-16 for a nickel and would own all three teams. Payout values would treat them as individual teams.
The Payouts
All payouts are determined by percentages of the total pot.
March Madness Payout Schedule
1 Champion = 26%
1 team that loses in Championship Game = 14%
2 teams that only reach the Final Four = 8% each
4 teams that only reach the Elite Eight = 4% each
8 teams that only reach the Sweet Sixteen = 2% each
16 teams that only win one game = 0.75% each
If you had 5 people that each put in and bid with $20, the pot would be $100. If Texas wins it all, that person that bought Texas would receive $26 for them.
If you had 8 people that each put in $40, the pot would be $320. If Texas wins two games and then loses in the Sweet Sixteen, the person that bought texas would receive 2% of the pot, $6.40.
Football Payout Schedule
My football structure includes the regular season and the playoffs. Since you never know how many teams will win a certain number of games, there's a variable remainder that goes to the team that wins it all.
Regular Season Payouts
4-6 wins = 0.5% each
7-9 wins = 1% each
10-12 wins = 2.5% each
13-16 wins = 4% each
Playoff Bonuses
4 teams that lose at the wild card round = 1% each
4 teams that lose at the divisional round = 2% each
2 teams that lose at the conference round = 5% each
1 team that loses in the championship = 9%
1 team that wins the championship = 15% + remainder
That's it. It might seem complicated at first, but it's really simple once you've done your first one.
The Files
I use a custom excel document to do all the math.
Click here to get my blank March Madness spreadsheet.
Click here to get my blank Football spreadsheet.
There are tabs at the bottom of the spreadsheet to show the payouts, record your draft, and a sample result.
[Disclaimer: Like any fantasy sports game with a salary cap, each players starts by bidding on teams with dollar amounts, and then receiving payouts based on that teams performance. Calcutta can be played for fun with imaginary dollars, and doesn't require gambling.]
