Hypothetical Educational Example (FSPI Historical Simulation, 2025-26 Season)

Commercial firms with revenues directly tied to professional sports team performance, such as regional sports networks, local concessionaires, ticketing platforms, merchandise retailers or corporate sponsors may carry financial exposure to on-ice performance fluctuations. 

In this case study, a commercial firm uses CME FSPI NHL Index futures to mitigate revenue volatility for the month of November. 

• Baseline index level: Following the final October games, the CME FSPI NHL Dallas Stars Index (NHLDAL) closed at 7,413.50, establishing the last official starting benchmark before November play begins.

• Market implied expectation: The November futures price of 7,600 reflects a market expectation of an 186.50-point increase in the index over the course of a month (representing the 7,600 contract price minus the October 31 spot close of 7,413.50).

• Revenue sensitivity: The firm estimates its revenue fluctuates by approximately $100 per index point above or below plan.

• Hedge structure: To eliminate downside variance and lock in the planned budget, the firm sells 10 standard CME FSPI (DALH) contracts at 7,600 ($10 multiplier per point × 10 contracts = $100-per-point sensitivity).

Note:  At the start of every season, all team indexes reset to 7,500 (Rule 2601; Methodology §3.C). View the full FSPI index methodology.

1. Establish the baseline: Buyers and sellers on Globex express their expectations for where the Dallas index will finish, discovering a November futures price of 7,600.
2. Execute the trade: A hypothetical commercial firm with Dallas Stars linked November revenue wants to lock in the planned month. To hedge this risk, the firm sells 10 standard November futures at 7,600 to establish a short position.
3. Secure the transaction: Globex instantly matches the seller with a buyer, and CME Clearing steps in as a central counterparty to guarantee financial performance for both sides.
4. Post the performance bond: The firm's futures commission merchant (FCM) holds the initial margin as collateral. This remains the firm's asset, to be returned when the position closes.
5. Mark-to-market daily: To prevent risk accumulation, gains and losses are calculated and settled in cash daily.
6. Cash-settle at expiry: When the contract month ends, the position cash-settles to the official index close.

Margin is collateral: A good-faith performance bond held while the position is open and returned when it closes. It remains the account holder's asset throughout.

• Revenue sensitivity (illustrative): Approximately $100 per index point
• Plan anchor: The 7,600 expected path
• Hedge position: Sell 10 DALH November contracts at 7,600
• Hedge sensitivity: $10 × 10 contracts = $100 per index point
• Hedge objective: Exchange performance upside for protection when revenue falls short of plan, sized at $100 per index point

During November, the Dallas Stars delivered an exceptionally strong month, scoring 62 goals (1st in the NHL) and securing the monthly most goals milestone bonus (+125.00 points).

• Final settlement (9:00 a.m. CT): 8,161.65
• Futures entry price (day 0): 7,600

• Official index outcome (7,413.50 → 8,161.65): Games +623.15 x Milestone +125.00 = +748.15
• Already priced in at entry (→ 7,600): +186.50
• Performance beyond priced-in expectation: +561.65

Futures leg loss: The index settled at 8,161.65 (+561.65 points beyond expectation). The short futures hedge incurred a cash loss of -$56,165.00 (-561.65 points × $10 × 10 contracts). 

Business revenue surplus: With the team outperforming its baseline plan, team-linked business operations generated roughly +$56,165.00 over budgeted revenue. 

Net-locked outcome: The operational gain fully offset the futures liability. The commercial firm successfully exchanged performance upside for revenue certainty, realizing its planned November budget. 

* November 15: The margin balance fell to $159,500, below the $170,000 maintenance level. The firm restored the initial margin with a $30,500 payment from free cash.

Regular season, calendar month; requires 100+ league-wide games (225 played). Ties pay in full to every tied team (§3.E).

• Market expectations: The futures price is the market's expectation of final settlement.
• Hedge offset: By selling index futures at the market expectation level, the firm traded conditional top-line upside for downside protection.
• Cash Flow Timing: Margin calls reflect cash-flow timing—the hedge calls for cash in months the business outperforms and pays cash in months it falls short.
• Basis Risk: A hedge and the underlying exposure are rarely perfect substitutes. Effectiveness depends on how closely revenue tracks the index.
• Rules-Based Benchmarks: FSPI CME Sports Indexes are rules-based reference benchmarks administered under a published methodology designed to align with the IOSCO Principles for Financial Benchmarks.