We reported last week about Chicago Fantasy Sports being sued in Illinois court by its AFFL grand-prize winner over troubles paying out. FSB.com has learned that the company sent a letter to prize winners in February to say that payments would be delayed.

The letter, carrying the names of CFS owners Wade J. Golab and Robert J. Smolarczyk, accompanied checks for partial winnings and apologized for the remaining funds not being currently available. The exact text read:

Dear AFFL Prize Winner,

Congratulations on your 2009 victory. We are sorry to have to inform you, and apologize in advance, that we are not able to send you your full winnings at this time. We have enclosed a check for one quarter of your winnings and will send the rest as soon as possible. Let me assure you, that we have the money necessary to complete the payouts this year and in the future, it is just not liquid right now. We have had two properties for sale since late September when we calculated that payouts would be short. As soon as one of them sells we will send you the rest of your winnings. We are hopeful that this will be sooner than later. We are truly sorry for this inconvenience and would again like to both apologize, and stress, that you will be paid your full winnings as soon as possible. If you would like to discuss this further or in more detail please do not hesitate to call.

Now, let’s at least give a little bit of credit to Golab and Smolarczyk for being honest (we have to assume) about the payment situation. It would have been easy for them to say something like, “Don’t worry, the rest of your money will be along shortly. Or you could apply as much of the remaining balance as you want to credits for use toward future entries.” Other occasions have met with silence on the part of the contest host. Being honest and open about the situation is always preferable.

That said, if you commit to host a contest — especially a big-money competition with significant buy-in prices — you should be prepared to handle the payouts at the end.

Golab and Smolarczyk seem to have delivered all of the 2008 winnings to begin rehabbing the AFFL’s image after the 2007 debacle that saw no one get paid and the previous owner flee. Had this been a new competition for 2008 and all other events since then been the same, the owners might end be afforded a bit more patience by the players. They knew, however, that acquiring the AFFL brought with it a shaken community of players that had just been burned.

For what it’s worth, Smolarczyk directly addressed concerns of a replay of 2007 on the AFFL.com message boards in February, reiterating the promise that 2009 prizes will eventually be paid out:

First things first. We are not like the previous owner. We are not looking for investors or looking to sell. We have the assets. We need to liquidate them to get the cash. We are giving partial payments to show that we are not like the other owner,(If I remember correctly he did not pay anyone). We tried to do the right thing and issue credits for all 07 prize winners and there should be hardly any credits left over from 07 winners going into 2010. All 2008 prize winners were paid and so will 2009 prize winners. So I strongly do apologize to anyone who has ill feelings towards us. We are not going anywhere! All winners will be paid!

Fair or not, the AFFL’s recent history will leave all interested parties awaiting proof.

Name: Dan and Kelly Grogan
Nickname: Dan and Kelly
Job title(s): TBD
Full-time in fantasy? Until recently leaving Athlon Sports (March 2010), had been full-time in fantasy football since 1995
Age: Dan 57; Kelly 53
Education: Dan — MBA, Univ. of Colorado; Kelly — B.S. Marketing, Colorado State University
Family status: Both married; each with 2 girls
Favorite fantasy sport to play: Unquestionably, football
Favorite sport to watch: NFL football
Favorite team (any sport): Dan — Broncos/Rockies/Nuggets; Kelly — Broncos/Rockies
All-time favorite athlete: Dan — Pete Maravich; Kelly — Willie Mays. Strange but true, neither one of us has a football hero — Steve Grogan comes close, though!
Years playing fantasy: Since 1985, so that would make it 25 years

We got our start in the fantasy industry when: We have a relatively unknown wide receiver named Paul Johns to thanks for our start in fantasy. We drafted Johns — a seemingly promising Seattle wide receiver — in our first fantasy league in 1985. For having played in just seven games in 1984, Johns had fairly impressive stats. I think he had four TDs. Well, we though we had drafted an “up and comer” only to learn when we announced the pick (I think we took him in the 4th round) that the reason Mr. Johns had played in just seven games the previous season was because he suffered a broken neck and had subsequently retired from the NFL. After the ridiculing from our fellow competitors died down, we vowed never to make the same mistake again.

We began compiling numbers and tracking players in preparation for the ‘86 draft, when a friend offered to buy our work. To make a long story short, that prompted us to start Grogan’s Fantasy Football, which we ran until 2006 before selling the company to Athlon.

Since then, my fantasy résumé includes: We operated Grogans from 1986 to 2005 then sold the company to Athlon Sports in 2006. We were both senior editors with Athlon from 2006 until 2010.

Three questions

1. Honestly, which brother knows more about football? Other sports?

As far as football goes, it’s pretty close as to who has the edge. Kelly holds a sizeable over me when it comes to golf, but I’ve got him by a mile when it comes to cycling!

2. What have been the pros and cons of being in business together?

Since we know each other so well, we instinctively know who should handle what. It’s rare that we have to delineate responsibilities for projects. I really can’t think of a negative in this relationship. Sure, we have our disagreements, but things always work out.

3. How much have you seen the print-media landscape change, and when did you begin to see a significant shift? What do you guys see for the future of fantasy magazines?

Dan: Having started in the print-publishing business in 1986, we’ve seen plenty of change most noticeably in the early to mid-’90s as people had greater access to and became more comfortable with the Internet. I used to think that the “convenience factor” and their portability would extend the life of printed magazines, but not so much now with devices like the iPad and Kindle. Costs (paper, distribution, etc.) have become horrendous for the print publishing business, and certainly advertisers have a lot more options these days. It’s tough to see the printed magazine business as a growth area. Fantasy sports has become a real time business and this doesn’t favor print either.

Kelly: I agree, it was in the mid-’90s when things started to shift more toward the Web. We began our website in 1991, but there were not a lot of people on the Web at that time. But, Dan and I knew it was important to have a website to be included as part of the magazine. Even though someone may have purchased the magazine months after it was written, our customers knew they could go to our site for free updated cheatsheets and revised articles. I think there will always be a demand for fantasy magazines as previews for the upcoming season, but the number may be dictated by the distributors and the bigger chains. The retail space for magazines is very competitive and will be even more so in the future.

Bonus: What’s the funniest publishable thing you can tell us about your brother that he probably wouldn’t want us to know?

Kelly: Well this may not be too funny now, but it was to us at the time. Early on when we were looking for outlets to distribute our magazine we would call on wholesalers, chains and the mom-and-pop bookstores to carry it (we didn’t realize how the distribution business worked). So I called the one store in San Francisco and left a message for the owner to call me back. When he did, I explained a little about fantasy football, but he was intrigued with the words “fantasy” and “football,” and he indicated that he was very anxious to see it and wanted to take 20 copies. I said great, but when he gave me the name of his store, I realized it was an adult bookstore. I never did send him the magazines. Probably wouldn’t have sold any anyway.

A roundup of items recently posted on the FSB News page.

- Craigslist is displaying an ad for a six-figure position to lead fantasy games development for a new company, apparently based in Manhattan. The startup is looking for someone with plenty of gaming experience to serve as “Chief Games Development Officer.”

- Tuesday marked 30 years since Daniel Okrent gathered a group of friends/colleagues in a French restaurant in New York and created Rotisserie baseball. To celebrate the anniversary, ESPN’s Nate Ravitz and Tristan Cockcroft put together a cool retrospective — with links to other material that’s part of the ‘Silly Little Game’ project.

- 14-year-old Matthew Berry = Napoleon Dynamite?

- Fantazzle has launched a salary-cap fantasy game for the NBA playoffs, which open on Saturday.

- The World Championship of Fantasy Football announced Monday that Chicago will join the list of locations hosting main-event drafts. The events will take place Sept. 10 and 11, with Atlantic City, Orlando and Las Vegas also playing host.

- Ever wondered how your favorite personal-finance bloggers might fare against each other in a fantasy baseball league? You haven’t? Oh, well, they’re taking each other on anyway, with $100 going to the chosen charity of the winner.

Send all of your news, job postings, stories and profile ideas to [email protected]. Follow us on Twitter (FSBcom).

The American Fantasy Football League has not been in good shape for several years now, and the contest’s failure to pay finally led to court action on Tuesday.

Jeff Gill, winner of the AFFL’s 2009 Gold-level championship, filed suit in Cook County court in Illinois on Tuesday in search of $69,000 in monetary damages (past-due winnings) and punitive damages of “at least” three times that ($207,000 in the complaint).

“Enough is enough !!!!” Gill apparently posted Wednesday morning in the AFFL forums, using the handle “Jeff5347.”

That sentiment likely refers to the payout issues that have dogged the AFFL for several years now. In 2007, the contest reportedly failed to deliver prizes to any of its winners, an episode that at least helped to lead to a change in ownership.

According to a thread from the forums on myffpc.com, current owners Wade Golab and Bob Smolarczyk took over before the 2008 season, paid 2007 winners in credits that could be put toward further AFFL entries and reportedly paid out all prizes to 2008 winners. Some payments have been made on 2009 winnings — including the aforementioned $5,900 to Gill — but the complaint accuses Golab and Smolarczyk of saying other funds necessary for completing payouts aren’t on hand.

Specifically, the suit alleges (in unyielding terms):

The Defendants, however, have failed and refused to pay Jeff Gill. In fact, they admit they cannot pay Jeff Gill his $69,000.00 and other awards. The truth is that the Defendants never had sufficient funds to pay cash prizes and awards to the Grand Prize winner, and to several other winners. Despite this fact, the Defendants falsely promised to the participant consumers that payment was “guaranteed,” deceptively accepted the consumers’ entry fees, and deceitfully failed to tell the unsuspecting participants before or during the contests that the Grand Prize was, in essence, a “fantasy” of their own fraudulent making.

The AFFL launched in 2004. FSB.com left voicemail messages for Golab and Smolarczyk and will update with any further information we encounter.