FutureSports Introduces MLB Indexes, Avalanche of ETF Filings Follows

FutureSports, the index provider developing gauges tied to the performances of college and professional athletes and teams, today announced it inked a deal with Major League Baseball (MLB) to launch indexes based on the performances of the league’s 30 franchises.

As part of the accord, MLB will supply FutureSports with official league data “that the company will use to create new broad-based CME FutureSports Performance Indexes (FSPI)” on each MLB team. Financal terms of the agreement weren’t disclosed. CME Group (NASDAQ: CME) and the index provider announced a partnership in July. With the MLB deal in place, the exchange operator will offer derivatives based on the baseball indexes.

Launch dates for the MLB team futures contracts weren’t revealed, but spring training for the 2027 season commences on Friday, Feb. 19, according to the league schedule.

ETFs, Of Course

The original batch of FSPIs are tied to NHL performance gauges and that was met with a spate of filings from exchange-traded fund (ETF) issuers looking to launch futures-based funds on each professional hockey team. One issuer even filed plans to introduce leveraged ETFs based on the NHL FSPIs.

A similar scenario is playing out on the back of the MLB index introduction. Both LeagueShares and RexShares filed plans for ETFs tied to the FutureSports MLB indexes. If approved, the funds would hold baskets of the CME-traded derivatives. LeagueShares went a step further by adding a filing for 2x leveraged MLB futures funds.

As of yet, the Securities and Exchange Commission (SEC) hasn’t approved the aforementioned NHL futures ETFs.

Not Quite Betting, Not Quite Prediction Markets

For the right audience, likely professional traders and sophisticated retail investors, the CME futures on FutureSports indexes could amount to “Goldilocks” offerings because the derivatives aren’t standard sports bets nor are they carbon copies of the event contracts traded on prediction markets.

The MLB and NHL futures contracts could be deployed by big-money bettors as hedges on various team exposures over the course of those leagues’ seasons.

As for the regulatory outlooks for the ETFs, the SEC hasn’t publicly commented on the NHL funds’ fates and it’s too early to tell what will come of the MLB filings, but there are hundreds of futures-based ETFs on the market today. That may be a sign that pro sports futures ETFs could avoid the “novel” label that’s been a hindrance in bringing other ETFs to market.