Fantasy for Football Business

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Football season is back, which means the billion-dollar fantasy football industry is also back in full swing. If you’re like me and the other 25.8 million Americans, you probably have at least one fantasy league matchup hanging in the balance of your inaugural week, awaiting resolution from the Monday Night Football games. Which also means your fantasy matchup is probably one of the incentives behind watching tonight’s NFL games. Fantasy football is making every week of the NFL a “must-watch,” making huge contributions to the skyrocketing premium for NFL TV deals, advertisements, sponsorships, and much more. Not only are people following their favorite teams, but fantasy football creates a unique opportunity that serves as motivation for fantasy managers to keep up with other teams around the league that they might not otherwise tune in to watch. For instance, the audience behind the week 2 matchup between Jacksonville and Oakland will probably comprise of only diehard fans, and the rest, people who have MJD, Cecil Shorts, and/or McFadden starting on their fantasy teams.

An attractive target for advertisers and marketers, the average fantasy football manager demographic is a 32-year-old white male, earning $92,750 annually, college educated, married, owns a home, and spends around $467 on fantasy sports a year, according to Fantasy Sports Trade Association. This disposable income and stable lifestyle proves to be a dream for potential sponsors, to the extent that Volkswagen and Snickers have already committed $3 million in fantasy football sponsorships with ESPN, CBS, or Yahoo, as stated by Ad Age Media. Thinking of these company partnerships with fantasy football, I can recall just a week ago the pictures I received via text from friends in a group chat. An individual sent a picture of his “Toyota Hall Of Fame – Best Draft” to the rest of us in the league, and proceeded smack talking about how he had the best team this season. I bet that kind of viral bragging is exactly what the sponsors had in mind when they made the partnership.

fantasy-football-players-bab8b964e036d36e_largeAlthough the average demographic tends to be middle-aged, President Paul Charchian of Fantasy Sports Trade Association (FSTA) describes the largest growth portion of customers by far come from the younger generation. With a growth rate of 7.6 percent annually, he explains this growth is occurring organically as families and friends recruit likeminded members to join their leagues. This can also be contributed to the growing integration technology has upon generation Y and how updates on fantasy stats can be accessed virtually anywhere. The addiction to watching the waiver wire and hanging on the edge of your seat in anticipation while calculating if that touchdown catch pulled you in the lead of your fantasy matchup can now be done on the go as well as at your home or work computer.

FSTA President Paul Charchian says, “NFL Redzone is like crack for fantasy managers.” It is a program specifically designed to target fantasy football managers. It shows viewers a live look of every aired game as soon as clutch moments happen or teams get inside the 20-yard line. They also showcase stat leaders by position all throughout the day. With this direct content, NFL Redzone is able to charge a carriage fee of 81 cents/month per subscriber, which has been ranked as the fourth most expensive national cable channel, according to Fox Business.

NFL teams are recognizing this trend and trying to curb fantasy managers’ desire to stay home and watch all the NFL games from the comfort of their own home instead of going into the stadiums for a real game day experience. A new tactic to battle the stay-at-home manager is Yahoo’s partnership with the San Francisco 49ers at Levi Stadium to build a fantasy football lounge. This lounge is a response to giving what the fans want. Other teams seem to be open to the idea, and the Jacksonville Jaguars have been rumored to be aiming at implementing a fantasy lounge of their own starting next season.

The fantasy sports industry has seen some interesting additions as it grows, as more and more small businesses enter the niche market attempting to capitalize on the growth and unique opportunity fantasy sports provide. For one, insurance has become a viable option. This fantasy sports insurance industry led by fantasysportsinsurance.com, works just like any other insurance company. The premium is usually 10% of the entry fee and customers pay this premium to protect them from a disastrous injury/event that might cause a manager to lose their entire investment. If an unfortunate event or a season-ending injury to a key early round draft pick occurs, the insurance company is obligated to refund the manager’s full amount of their entry fee. Another small business benefiting from this growth is FantasyDispute.com This company acts as an arbitrator, ensuring to resolve any fantasy sports disagreements for a fee of $14.95. They also make a promise to ensure the integrity of the league to the highest degree.

In addition to fantasy football serving the competitive nature of its participants, it has also become an activity for the risk-takers. By creating an entry fee and a winner’s payout distribution, gambling on fantasy football has become a very popular medium. The attractiveness of the possible payouts rights have caused some fantasy managers to take the football season as a true gambling opportunity comparable to other well-known table games in Vegas. Fantasy Football Players Championship (FFPC) provides a legal high-stakes gambling opportunity where managers can make large lumps of money with entry fees costing $1,650 and prize money of $250,000. “If I can double my money, I’m good. It’s not a game of luck, it’s a game of skill,” Mike Santos, one of the cult-like members of the FFPC explained. “It’s like poker, the same players are at the table every year… The return is greater—it’s a chance to win the best prize.”

This desire to win has caused fantasy managers to go to great lengths when looking for an edge on their competition; so much so, many managers pay for expert opinion, and in-depth subscription based news and analysis. According to Fantasy Sports Trade Association, managers use more than one site to gather information. In fact, only 7 percent of managers use just one site to gather research. Over 44 percent of managers use 4-5 different sites and 30 percent of managers use six sites or more.

Given the massive growth and the captive audience fantasy football provides, I can only see this industry growing and the money pouring into it continuing to balloon. Fantasy trackers will increasingly be implemented to a higher degree on every NFL broadcast and stadiums will continue to develop new game plans to cater to the in-game experience of fantasy managers. It will be interesting to see what new innovations emerge in order to satisfy the growing appetite for the fantasy football experience.

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