Do You Do a Calcutta Auction for the NCAA Tournament?

Discussion in 'The Mainboard' started by allothersnsused, Mar 16, 2016.

  1. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    A group of 10 or so friends and I have been doing this the past 3 years for the NCAA Tournament and it is vastly superior to filling out a bracket. I'm posting this here instead of the gambling board because no one reads the gambling board and its March Madness. Here are the basic rules:

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    A Calcutta is an auction-based way of picking winners in the NCAA tournament. Individuals or funds buy 100% ownership rights to teams in an un-capped auction format with these “investments” returning a certain % of the total pot. The payouts percentages are determined by how far teams progress in the tournament. Every team from the NCAA tournament is put up for auction in random order. (Although I suggest combining 13-16 seeds in each region to make the process slightly simpler — no one really wants to pay for North Carolina A&T.) The highest bidder gets ownership rights of that team. This is the best part of the process. If you like a team, they're yours if you want them. You, and no one else, ride or die based on their performance.

    Depending on whether you're doing this among friends or coworkers, you may decide to go at this alone or form a group to pool your money and buy a portfolio of teams. It's probably best not to have more than 10 entries into the Calcutta. The finance gurus out there might want to look into developing some type of model to predict the relative value of each team — i.e. North Carolina is worth $10, but Duke is worth $20. But most of the fun comes in not being completely sure what the total pot will be, so you'll have to estimate other owners' spends to figure out what each team is worth. There's also the possibility to trade all or part of your team in a secondary market after the initial auction wraps up.

    The truest way of doing a Calcutta is to make spending unlimited. The market regulates itself because payouts are a percentage of the total pot. If one guy wants to go out there and spend enormous sums of money on high seeds, but no one else is bidding that high, then that's up to him. That person puts more risk on themselves. If they're the only one putting the majority of money into the pot, they're only getting their own money when the payouts come back, so there's no return. If upsets happen, that person is really screwed.

    For those faint of heart, you can put in a couple restrictions to spending if that's too much for you to handle. I'd suggest a salary cap or luxury tax at $200. (For tax purposes, it would be $1 for every $1 spent over $200. If you spend $250 in the auction, it'll really be $300 because that extra $50 will be taxed $50 for each dollar spent.)

    A suggested payout structure would look something like this: (Payouts are a percentage of the total pot – play-in games don’t count)


    · 0.50% for exactly 1 win (16 teams)
    · 1.75% for exactly 2 wins (8 teams)
    · 4.25% for exactly 3 wins (4 teams)
    · 12% for exactly 4 wins (Final Four losers — 2 teams)
    · 15% for exactly 5 wins (National runner-up — 1 team)
    · 22% for exactly 6 wins (National Champion — 1 team)

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    I have heard of people doing these for golf and other tournaments as well. It's really a blast and I would highly recommend it. Anyone else for some chatter in here or am I going to be talking to myself?
     
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  2. IrishLAX2

    IrishLAX2 Dude's car got a little dinged up
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    For handicapped golf tournaments it's awesome, because technically every player/team is supposed to have the same exact chances of winning.

    I don't see how this would be as fun when there's literally only 10 teams each year that have a legitimate shot to win it all.
     
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  3. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Its mostly about estimating the pot and determining what each team's value is based on how far you think they'll advance. Sure, you're not going to spend $200 on Stephen F. Austin. But if you spend $2 on them, the pot ends up being $3000 and they steal a first round game, you return $13 on your $2. They become a Sweet 16 cinderella and you're sitting on $48.

    One of our biggest winners in the past was a guy who bought UConn for like $9 the year they won it all. Sure, that's rare, but even a second-weekend run with a team you bought for pennies can return you some good money.
     
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  4. tandin

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    have done it for fishing tournaments.
     
  5. * J Y *

    * J Y * TEXAS
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    Another fraternity started doing one for the masters in college that they would invite everyone to. Really fun and it's continued every year since then. Now people get their offices involved and stuff and it's blown up to where it's less fun. You have to get a big group together and all pony up just to get one middle of the road golfer. State wide I would guess the pot will easily be half a million bucks this year.
     
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  6. Fran Tarkenton

    Fran Tarkenton Well-Known Member
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    only ever do calcuttas for The Masters

    but I could see a Final 4 being fun
     
  7. Tiffin

    Tiffin Florida is a penis.
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    The one time I did it for the NCAA tournament I won. Lot of fun, gave me some random rooting interests.
     
  8. HOOSINSC

    HOOSINSC You're with me leather
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    I didn't even know handicapped golf was a thing
     
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  9. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    The cap & luxury tax has been useful to us in the past at keeping it reasonable and keeping everyone involved. We removed the cap this year, though, and it was more fun because it was tougher to estimate the pot. Capping gives you a reasonable estimate at what the pot will be and makes it easier for the finance/math bros to come up with pretty perfect values for each team. Uncapping leads to chaos.
     
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  10. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    We do one. 5% of the pot and all of the bar who hosts the auction's take goes to a children's charity. The pot is between $80k and $90k each year.
     
  11. Corky Bucek

    Corky Bucek Fan of: Batting .750 on JC QB Transfers Since 2010
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    Doing one for the first time this year. Invested a small amount, so it should be fun to follow our teams.

    There are a couple of other categories that are used like biggest upset in the tourney, biggest blowout, best performance from a 15/16 seed, etc. Seems like those help build the overall pot and make things interesting.
     
  12. Corky Bucek

    Corky Bucek Fan of: Batting .750 on JC QB Transfers Since 2010
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    When I was in Atlanta I knew a group that did a Calcutta for CFB. Basically broke the preseason rankings into pods of 6 or 8. Highest ranked teams at the end of the season in each pod won a certain percent of the pot, national champion, and biggest mover on the final rankings. I could be missing a category or two. Seemed pretty fun and if you picked the right team you could make some serious cash. 2010 Auburn cleaned up on every category they were in.
     
  13. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    I think we had thrown around these ideas before as well. Tough to balance that with making sure the tourney winner gets his though.
     
  14. IrishLAX2

    IrishLAX2 Dude's car got a little dinged up
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    It's basically how every private golf club in the country handles their member/guest calcuttas
     
  15. Corky Bucek

    Corky Bucek Fan of: Batting .750 on JC QB Transfers Since 2010
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    I think if you make it a low enough percent where it is worth it to buy teams and be paid off and also adds extra money to the pot.
     
  16. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    One of our payouts is 25% to seeds 5-16 who make the sweet sixteen. We own 3/6. Wisconsin cost us $1,950 (and possibly more, because we also owned Xavier who would have paid out in the elite 8).

    Still, :fratzy:
     
    #16 wes tegg, Mar 21, 2016
    Last edited: Mar 21, 2016
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  17. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    See, e.g.:

    The way it pans out, you often end up getting more money on 15/16 seeds than you do on the 13/14's, but there's still value at every level. It's a damned good time.
     
  18. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Teams I bought who lost on buzzer beaters:

    Texas
    Cincy
    S.F. Austin

    I did not do well this year. Need deep runs from Oklahoma and Villanova to recover any kind of profit.
     
  19. beist

    beist Hyperbolist
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    I think this was a joke. It probably should have been finished with something like Don't their wheelchairs damage the greens?
     
  20. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Trying to set up a Masters pool. Anyone have good payout systems? Preferably some good payouts for bottom players as well.
     
  21. tmbrules

    tmbrules Make America Great Again!
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    My friend and I used to participate in one of these and it was a ton of fun. We had a pretty complex spreadsheet that was linked up to point spread predictions etc so that you could get a "value" for every team. The key to getting the best values was estimating the total pot (which inevitably grew each year). We stopped doing it about a year ago because the sums of money (pot was $1mm+) got too large and someone welched on a pretty large sum of money which caused a shitty ripple effect for those counting on collecting.

    If you want to check out the spreadsheet for next year PM me and ill pass it along.
     
  22. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Bump. Draft tonight.
     
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  23. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    Ours, too.
     
  24. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Based on Kenpom, most overseeded teams (and thus probably most overvalued) are Maryland, Seton Hall, Minnesota, Arizona and Butler
    Underseeded (likely undervalued) are Witchita St., Oklahoma St., Kansas St., St. Mary and Wake Forest.
     
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  25. Corky Bucek

    Corky Bucek Fan of: Batting .750 on JC QB Transfers Since 2010
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  26. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    UNO/Mt. St. Mary's
    MTSU
    SMU
    FSU
    Vermont
    Iowa St.

    We spent $9,700. The total pot was $95k.
     
  27. Corky Bucek

    Corky Bucek Fan of: Batting .750 on JC QB Transfers Since 2010
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    Nice. Those are some teams I'm hoping our group is able to land.
     
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  28. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    Apparently everyone in ours saw this, because their sale prices were the exact opposite.
     
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  29. TLAU

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    tried to get one of these going in the office. people too boring to do it.

    did talk some people into doing an 8 person fantasy snake draft of teams that's also a fun change up from standard brackets
     
  30. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Spending was way way down this year, about 3/5 of what it normally is. Group I do it with every year is going to Vegas this weekend so I'm sure that had a chilling effect knowing we'd be dropping money there. Still, a lot of the early bids were WAY too high because people estimated the pot to be about what it was the past couple years. My teams:

    Gonzaga
    Purdue
    Arkansas
    Dayton
    Northwestern
    Vandy
    VCU
    UNCW

    I also got Wisconsin and sold them this morning on the aftermarket for a good profit.

    I'm not all that happy with my bracket. 3 of my 8 are in the same subregional, but I got Vandy for cheap to hedge my large Gonzaga investment. Northwestern was going for next to nothing so I scooped them too. I bid a lot on the Zags early and then once I realized spending was going down, I kind of sat on my hands and only bid small amounts on teams I could cash with if they won one game. Definitely saving most of my bigger gambling for Vegas this weekend.
     
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  31. allothersnsused

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    I realized that I didn't pay enough attention to the bracket going in and focused more on a crude Kenpom "value" metric I put together than potential opponents. That meant that most of the teams I wanted were in the West, but you can't get good value out of buying all of Gonzaga, WVU, St. Mary's, FSU, and Arizona.

    I wish I had been more aggressive for Louisville, who I think went for a good price. It was really hard to justify spending up on much of anyone outside the top 2 seeds in each region. Our payouts have a huge jump in value between Sweet 16 and Elite 8 and I think the gap between 1-2 seeds and 3-4 seeds is pretty big this year.
     
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  32. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    Buying both sides of a first round game is a bold move unless your payout is a lot different than ours.
     
  33. tmbrules

    tmbrules Make America Great Again!
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    How much did the pot grow from the previous year?
     
  34. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    I would never ordinarily do it but I got Northwestern for $2 which is absurd for an 8 seed. No one wanted them. I had spent $11 on Vandy earlier (before I realized the pot was shrinking) so it was a $2 bid to secure a second round payout, coupled with a hedge on my Gonzaga bet. It was insurance, not designed to grow my earnings.

    Our pot is much much smaller than yours. There are 10 of us and we all enter as individuals. Pot usually ends up around $3000 but was under $2000 this year.
     
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  35. wes tegg

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    It was right around $80k last year, I think. It was a little over $90k the year before.
     
  36. Arkadin

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    Is it 10 groups or so spending about the same as what you spent?
     
  37. wes tegg

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    I think there were about 20 teams total. We were probably the median in spending.
     
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  38. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    For those who do this with a team, how much time do you have to make picks? It seems like a really difficult thing to do with a group of people to come to a consensus on how teams should be valued.

    We draft online and the clock resets to 15 seconds with every bid.
     
  39. tmbrules

    tmbrules Make America Great Again!
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    In ours we noticed that the pot would increase by 10-25% each year. We found it advantageous to base our valuations on that total pot which would often lead us to getting some good deals earlier in the auction. Advice would be to go after the top seeds and most undervalued teams early in the auction if you think the pot will be more than what other people are estimating. Estimating the total pot is half the battle.
     
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  40. tmbrules

    tmbrules Make America Great Again!
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    All the teams go in a hat. The auction starts by pulling a team out. The auction is held for that team. Rinse and repeat until all teams are auctioned off.
     
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  41. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    Yeah, we have a massive spreadsheet that includes past years so we were able to tell mid-auction how far ahead/below the previous pace we were. All about the data.
     
  42. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    This has been the case every year until this year for us. Prices for good teams increase as quality teams become more scarce and people get a sense of the pot size. In the past, people have gotten ridiculous deals on 1-2 seeds when they came up in the first couple picks. It was interesting to see how this changed this year when the pot actually shrunk.
     
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  43. wes tegg

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    We don't really have to have a consensus. We send out the data earlier in the day, plan a strategy, and then have one guy who holds the paddle. Some of our investors don't even come to the auction.
     
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  44. allothersnsused

    allothersnsused D'usse taste like Kool Aid for the analysts
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    Got it. I figure you have to do a lot of planning beforehand and basically trust one person to be the ultimate decision maker. Trying to confer/come to consensus during the auction would be impossible.
     
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  45. tmbrules

    tmbrules Make America Great Again!
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    We always had one person in charge and then basically investors like wes tegg said. Also, like he said, we had a spreadsheet that would model the teams values for us and the instructions to the person in charge were to follow the model. The hardest part for us was estimating the total pot size.
     
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  46. wes tegg

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    We give input and everything, but it's mostly just trusting the guy with the paddle. We've overpaid before, but it's really all in good fun. It's a live auction where they're trying to get the pot as high as they can, so there's often a lot of "going once, going twice, it's for the kids, come on!" going on.
     
  47. allothersnsused

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    I got stuck with a couple teams where I was just trying to inflate the pot. We have one guy who it's a running joke that he gets Dayton every year. I tried to bump the pot up on him and he dropped out.
     
  48. Corky Bucek

    Corky Bucek Fan of: Batting .750 on JC QB Transfers Since 2010
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    Princeton
    Arky
    Iowa State
    West Virginia
    Duke

    Pretty good with that group.
     
  49. bertwing

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    That's fucking solid
     
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  50. allothersnsused

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    Bumping this again to post my lot this year. Kind of hate it but this year seemed like we were all working off the same info. I was hesitant to bid too much on teams because the bracket actually feels very balanced this year. Villanova was maybe the only team that I felt really comfortable would get out of the Sweet 16 and they went for way too much for a team who routinely loses in the first weekend. I really liked Michigan State and Duke but couldn't justify spending too much on them with the risk of a S16 loss.

    Purdue
    Gonzaga
    Virginia Tech
    Houston
    NC State
    Davidson
    Providence

    Our pot has been wildly fluctuating over the past couple years, there are only 10 of us and major life events like buying a house or a wedding can really put the cap on peoples' spending so it could be really tough to estimate. I need a Final 4 from Purdue or Gonzaga (just barely), a S16 from Houston, and just one win for the rest. I misjudged the pot by about 20% this year and had priced Purdue and Gonzaga on an Elite 8 appearance.

    Btw, we've been using auctionpro.co the past couple years and this year the guy who runs the site emailed me asking for feedback. Really good product and seemed like a good dude, definitely check out the site.
     
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