Home / Play / CME Group’s partnership with FutureSports creates new hedging possibilities for investors in sports entertainment

CME Group’s partnership with FutureSports creates new hedging possibilities for investors in sports entertainment

Derek Helling

Legal Writer

Publish Date: Jul 31, 2026

Fact checked by: Matt Moreno

Key Points

FutureSports is creating futures contracts that convert athlete and team performances into commodities
CME Group could provide the means of executing these contracts for a litany of potential investors
Availability of futures contracts based on performance may push investors closer to desired goal of greater guaranteed and reliable profits

There is just one reason why professional sport leagues like MLB and the WNBA have been expanding postseason structures and adding tournaments during the regular season. Doing so gives more of the investors in the leagues enhanced access to the revenue that these events bring in.

Even these expansions don’t completely eliminate risk, though. These investors have deliberately engaged in a business that is full of risk including athlete injury and poor performance during competitions.

{Photo by Sean M. Haffey/Getty Images)

In some other industries, investors can use certain futures contracts to hedge their main investments and reduce their overall risk. Because of a deal between The CME Group and FutureSports, the sports entertainment industry could soon join that fray.

While people without stakes in the performance of sports entertainment entities would be able to participate in the market for these futures contracts if regulators approve, these contracts will be primarily designed for investors that can trade in significant amounts on the margins. Regulation adjustments could have a significant impact on whether the result is a net gain or loss for fans.

CME Group, FutureSports announce partnership

The CME Group and FutureSports jointly announced their collaboration on Wednesday. The CME Group called the deal with FutureSports the “world’s first futures on sports indexes.”

The FutureSports release stated that the “futures will begin trading this summer, pending regulatory review, with details to be announced in the coming weeks.”

If regulators approve, the prices for the futures contracts will move according to the FutureSports Performance Indexes (FSPI). That is FutureSports’ proprietary index in which sports teams’ prices move according to performance.

While exactly how much losing or winning a game will move a contract value is a trade secret in the FSPI, the futures themselves will follow the standard playbook.

How trading futures contracts works

Futures contracts are essentially an agreement between two parties to buy or sell a certain amount of a specified commodity on a future date. These financial instruments got their start using commodities like agricultural crops and oil.

The several uses of futures contracts include speculation. In that instance, a person or organization gets into the contract hoping to realize a profit from the movement of the market price for the commodity.

Another use for futures contracts is hedging investors’ stakes in the commodity the contract is based upon. For example, a person who makes their livelihood from growing and selling corn may hedge their investment in that crop by getting into a futures contract reflecting an index for corn prices.

That hedging possibility is an intriguing one for people and organizations that have a stake in the sports entertainment industry.

CME Group, FutureSports already see FSPI as hedging tool

The hedging possibility is not theoretical in The CME Group’s view. The July 29 press release explicitly mentions “new hedging and risk transfer capabilities for the sports ecosystem.”

In the statement, FutureSports Co-Founder Leigh Taylforth called out a “a broad range of potential participants, from stadium owners and operators, to sports sponsors and endorsers, insurers, sports apparel manufacturers and league broadcasting partners” as potential users. The release denotes “monthly and quarterly cash-settled FSPI futures,” allowing investors to take short-term and long-term positions.

That flexibility will be pivotal to FSPI futures’ practicality as hedging instruments for the parties that Taylforth mentioned. A couple of the entities that Taylforth suggested comprise strong examples of FSPI futures as hedging devices.

Example 1: Fanatics uses FSPI futures to hedge apparel sales

Fanatics has deals with over 900 sports properties to not only provide athlete uniforms but also sell apparel and other merchandise to the general public.

As one example, Fanatics has an exclusive contract with the New York Yankees to distribute game-used collectibles. Securing those rights represents a significant cost for Fanatics and profiting off those rights is heavily dependent on consumer demand for the collectibles.

Consumer demand can fluctuate significantly based on the Yankees’ performance during games. For that reason, Fanatics might buy a short position on the Yankees.

Doing so would allow Fanatics to hedge against the Yankees performing poorly and demand for game-used collectibles accordingly failing to meet Fanatics’ projections. The FSPI futures will allow Fanatics to take advantage of diminished volatility because of the short timeframe for the contract settlement while still preserving a small amount of upside should the Yankees perform well during that period.

Example 2: Redbird Capital hedges against playoff exclusion

College sports enterprises have started to welcome private equity investments as a new revenue source. The highest-profile of these deals to date has been Redbird Capital’s investment in the Big 12 conference.

In college sports, one of the biggest revenue-capture opportunities is inclusion in the annual College Football Playoff. The more of the Big 12’s teams that participate in the playoff, the more revenue that its investors and members stand to collect.

The Big 12 gets one guaranteed spot for the team that it deems its conference champion under the current structure. However, there is an opportunity to get additional teams into the tournament through as many as seven at-large bids that a committee distributes.

Redbird’s return on its investment in the Big 12 thus falls and rises with College Football Playoff participation. In this case, longer-term positions on the performances of the Big 12 football teams most likely to contend for playoff bids could represent a legitimate hedge.

The contract price would reflect the on-field performance of the team(s), which is objective and not subject to the decisions of the playoff committee. If a team has a highly successful season but nonetheless does not qualify for the playoff, Redbird would still be able to realize more of the financial benefit of that successful regular season.

Both Fanatics and Redbird would likely be able to trade on the margins (put up just a small amount of the contracts’ value as security) because of their substantial assets, making these futures more appealing. For fans, though, the premise raises an issue.

“Guaranteed” revenue isn’t an ideal situation for fans

The expansion of playoffs and tournaments along with the proliferation of sports entertainment entities into adjacent amenities like gambling and restaurants have a clear objective. That objective is to reduce risk for investors and produce more revenue channels that are not heavily dependent on performance in the field of play.

Yet, for most fans, performance in the field of play is the main point of interest. That creates a widening gulf between investors who are working to make their interests increasingly detached from the on-field product and a fan base that still holds that product as the only reason to engage.

The argument could be made that hedging based on athletic performances actually increases the reason for stakeholders to genuinely care about how the team performs. That may be logical in simple theory, but the situation isn’t that simple.

FSPI futures could be another element of a multi-pronged strategy to realize substantial profits from teams that perform poorly in terms of losses and statistics. With another avenue to more reliable revenue based on the team merely existing, the motivation to invest in a winning product diminishes.

There will be other impacts of the rise of FSPI futures and similar products, but these implications for investors and fans are clear. FSPI futures represent the utmost commodification of sports outcomes that exists to date.

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