Fantasy football players and moguls reap millions as internet game gets real

Fantasy is variously described as imaginative power, a mental image or dream, an impractical idea or a genre of fiction. There is also a new definition, driven by millions of online game players, which is becoming more real by the week.

Consider these four facts:

1. The Fantasy Sports Trade Association (FSTA) indicates there are almost 37 million fantasy football players in the USA and Canada this year.

2. When San Francisco 49ers opened their new Levi’s Stadium this season, it included the first fantasy sports lounge, sponsored by Yahoo.

3. Pay-to-play website FanDuel.com pays out more than $10m in prize money every week.

4. The fantasy sports industry as a whole is worth more than $10bn annually, but more than 80% of that is devoted to football.

Fantasy football? How about fantastical football, or even further football, because it is most certainly what Football Did Next, and there are no signs of the growth abating anytime soon.

I first visited this phenomenon in August, in this feature about the ESPN Fantasy Football Convention in Orlando. It seems that was only the tip of the fantasy iceberg, a surface glimpse of the floating behemoth that threatens to shift the basic foundations of our understanding and appreciation of sports themselves.

Football is the prime mover in this landscape primarily because it is perfectly suited to the métier of fantasy calculations, an obvious like-for-like substitute that allows players to be owners, head coaches and general managers rolled into one. At its simplest level it’s an alternate way to watch the game itself, creating followers of individual players as well as teams, and stretching the product to a far wider audience than mere fans. Pro football’s short, 17-week season is also well suited to fantasy engagement, rather than the unwieldy 162 games of the baseball season or 82 in basketball.

The NFL is (finally) in love with fantasy football – for the broader demographic it involves, bringing in women as well as men, children as well as senior citizens. Yet there is more to fantasy sports than mere demographics. Much more.

A crowded, lucrative marketplace

The current big two in FF terms are ESPN and Yahoo, each with roughly 25% of the playing market (according to FSTA figures) and with the likes of CBS, the NFL itself, FoxSports and MyFantasyLeague.com a little further down the pecking order with anywhere from 7-14%.

But all that is changing, and quickly. If you spend any time on sports radio, websites or even with the TV on, you will notice commercials for sites like FanDuel.com, DraftKings and Masters Fantasy Football Leagues, sites that promote pay-to-play options and which offer significant payouts. FanDuel, for example, will stage its Fantasy Football Championship in Las Vegas in December, with a staggering $2m first prize and $1m for the runner-up.

All such competitions ae perfectly legal, avoiding the term “gambling” thanks to the 2006 Unlawful Internet Gaming Enforcement Act (UIGEA), which classifies fantasy sports as games of skill. They currently make up little more than 2% of the overall market, but they are growing fast and represent quite a challenge to the existing order.

At the same time, a whole industry has grown up alongside the existing playing formats, offering the most precious commodity of all – statistics and analysis. Sites like NumberFire, Fantasy Football Starters and Football Outsiders have mushroomed, offering subscription-fee advice and insight.

As such sites have grown, they have introduced the sports world to data mining, algorithmic analysis and other mathematical modelling, all in an attempt to provide this information to fantasy players. It would have been almost inconceivable barely five years ago but it is now an established part of the FF industry.

Nik Bonaddio founded NumberFire in 2010. He has since seen the site grow into arguably the premier fantasy analysis business. Bonaddio had a vision of an innovative analytical system; amazingly, he parlayed a $100,000 win on the TV game show Who Wants To Be A Millionaire into his brave new fantasy world – although that wasn’t quite the original intention. He explains:

I really just wanted to build a tool that would help me beat my friends and it’s turned into this large media company that works with ESPN and Sports Illustrated and all of these great brands.

“Our goal is to provide analytics to the widest audience possible, be it a casual fan or a serious player. As such, we don’t focus on one sport over another, instead we generally just follow demand. If more people are interested in our football content, we’ll produce more football content. Since we’re a data company, we’re constantly using engagement metrics and tracking to figure out what people are interested in, and then building our business to that.”

Daily dues

FanDuel believes it has opened up another new front with its high-profile approach to the explosive growth in one-day leagues. Its chief executive, Nigel Eccles, says: “FanDuel has seen five-times growth for NFL year over year, so we know this format is resonating with fantasy players and footballs fans.

“We have huge tournaments and events to further promote our product – last week we had our $2.5m Sunday Millions tournament, in which, for $25, you could enter and potentially win up to $500,000.

“We also expect that growth to continue and, ultimately, we expect daily fantasy to become as big as season-long fantasy sports and expect FanDuel to continue to be the dominant player in the daily market.

“The key differentiator is you can pick a team, play and win in one day. Unlike season-long leagues, the draft can be done in five minutes and you can enter as many leagues as you like. There is no commitment to the same team and, when you win, the prizes are paid out straight after the last game is played.

As far as our business is concerned, this year we’ve already blown away our internal expectations and are expecting to generate more than $50m in revenue. Next year we’re projecting to pay out more than a billion dollars to fantasy players, so we’re very excited about the future of this industry and our prospects in particular.

Yes, that was billion. The Fantasy Sports Trade Association is in full agreement with Eccles’ assessment. And so are ESPN, the NFL and just about every other FF organisation.

Fantasy sports pioneer and FSTA president Paul Charchian insists growth is still exponential. “We keep thinking it will level off but we have gained another four million players in the last year,” he says. “Realistically, it can’t sustain this growth but we are seeing the fastest-growing segment in the under-18s group, because they see their parents play and are either joining their parents or starting their own cafeteria leagues.”

“FanDuel and similar sites are also a quickly growing area but that’s only being played by 2-3% of fantasy sports players right now. So while we are excited about this relatively new development, it is probably only a fraction of the potential. We think it will grow dramatically in the next five to 10 years.

Daily sports also represent the fastest-growing area of the industry. Since July, FanDuel and DraftKings have brought in $110m in funding investment – that’s more money than in the history of our development prior to July.

The FSTA is not a regulatory body but it does demand consistent standards from its members. Charchian says: “We have had instances where we have had to tell members their model doesn’t fit what we are comfortable with, so, while we don’t police the industry as such, we certainly try to ensure we stay within the language of the UIGEA.”

ESPN is equally bullish about staying at the forefront of the fantasy sports wave, and trying to engage gamers in new and ever more tech-friendly ways. The company’s head of fantasy product is George Leimer, who says: “There remains an insatiable amount of interest … One of the challenges is helping users to wade through the reams of data and articles about players on their teams.

“It is also important to make sure your product is readily available and fully mobile, so users can activate their line-ups, make changes and see the latest info as they travel. And, first and foremost, it has to be fun. We commissioned a number of artists to come up with various fantasy logos that teams could adopt and these were picked up by the million, becoming one of the single most used and shared features this year.”

“Daily games have become complementary to the traditional fantasy product and I actually think we are still in the early innings of things overall. There are a lot of exciting innovations that we are working on and there is a huge social aspect to fantasy sports that continues to generate interest and growth.

“Certainly one of the most important aspects for me is to play with my friends, beat them – and then talk trash to them afterwards!”

‘Fans now care about every game’

The NFL itself, which didn’t join the fantasy ranks until 2010, is now sensing a whole new horizon of fan interaction and understanding. Daniel Shlossman, director of product for fantasy football and mobile games, explains: “We definitely see fantasy football as a fan-building tool across the board.

Fans still feel allegiance to their favourite team but now they care about every game on Thursday, Sunday and Monday. Each play impacts their fantasy team’s weekly performance, so they inherently care that much more about everything NFL.

“The new data analysis and metrics being introduced also definitely help fans’ appreciation of the game itself. We are always looking for a new statistic to feature or way to visualise data to make it easier for fans to comprehend player performances on the field and their ultimate impact in fantasy match-ups. Whereas fantasy football used to comprise mostly of ‘box score’ displays of tables of numbers, we now feature a graphical live chart showing each week’s match-up, complete with video highlights available on-demand of your match-up’s big plays.”

“Throughout the platform, key data and trends are visually represented, making it easier for fantasy players of all skill levels to comprehend the data and make the best decisions. We even offer the SAP Player Comparison Tool, exclusively inside of NFL.com Fantasy, where, with just a few clicks, fans can compare players heads-up across hundreds of statistics and data points with an easy-to-comprehend output providing advice as to which player has the advantage that week or in a trade.

“NFL player performances on the field are extraordinary, but our new-found ability to break down those accomplishments into measurable data is leading to increased focus on individual performances. While websites gave out fantasy awards annually to commemorate each season, we took it one step further a few years back in the creation of the NFL.com Fantasy Player of the Year award, which is now handed out annually at NFL Honors, the league’s annual awards show.

Players such as Calvin Johnson and Jamaal Charles have been honoured alongside the NFL MVP, rookies of the year and coach of the year.

If it all sounds like a whole new industry feeding off an existing one, that is because it is. Breakthroughs in online and mobile technology continue to fuel fantasy growth and you can be sure new companies will spring up to challenge NumberFire, FanDuel and the rest. And the NFL will keep gaining new fans.

Because, ultimately, this is a completely symbiotic relationship that profits both sides and enlarges the overall picture for all, in the fantasy world and the real one. More fantasy involvement means more viewers for the NFL; more league outreach creates more fantasy players.

Possibly the final word should go, though, to ESPN’s analyst and writer Matthew Berry, who has long been an advocate of fantasy sports, having founded aggregator website RotoPass.com and TalentedMrRoto.com, a highly-regarded site, a little more than 10 years ago.

“I’m not sure I ever saw it becoming this big, but I’m certainly not shocked,” he insists.

“I like pizza, Springsteen, superhero movies, sitting on a beach and relaxing and so on. I like the things everyone likes, and I love fantasy football. So when I was starting out, I knew if the other things I loved were insanely popular, that fantasy football wasn’t some weird outlier. That if I liked it, I knew as soon as I could get more people to discover it, they would realise what I did – that it’s insanely fun.”