Review by Jason Gannon in KIN 332 (section 2)
The Fantasy Football industry has become a highly successful industry generating over $1 billion in profits a year. Fantasy football initially started in 1962 and has been growing ever since. The widespread use of the Internet has really made the industry take off.
I’m personally avid fantasy sports player and especially fantasy football. I’m a culprit of checking my phone or computer periodically throughout the week searching for any potential way I can improve my roster or chances of winning. I believe the fantasy sports industry and more specifically fantasy football will only continue to grow. In a recent article from Fantasy Sports Trade Association estimated 75% of the 34 million participants in fantasy sports will be playing fantasy football. This stat shows that fantasy football is the most popular and participated fantasy-sport. Fantasy football isn’t limited to mid aged males who watch sports center everyday; there is a wide array of participants. Both males and females play, and there is essentially no age limit. President of the Fantasy Sports Trade Association Paul Charchian said, “A lot of fantasy football’s growth is coming from the younger generation,” said Charchian. “Parents are playing with their kids. The growth is happening organically. We’re not targeting a specific demographic; rather it’s what families want to happen in their living rooms on Sundays.” As more generations grow up playing fantasy football, the industry growth will continue. As access to the internet and technology continue to improve growth of fantasy football will too.
If fantasy football is free to play on sites like ESPN and Yahoo, then how are they making $1 billion a year? Sources of profit come from cable deals, advertisements, draft guides, buy-in fees and other forms of endorsements. Last month Cablevision agreed to a deal with the NFL network to carry their channel. It is said that NFL network charges 81 cents per subscriber, per month, making it the fourth most expensive cable channel to carry. Along with cable companies, other small businesses are finding ways to profit off the industry too. Fantasy Sports Insurance (FSI) offers fantasy football owners a disability coverage, which will financially protect you if one of your players were to suffer a “season changing” injury. FSI will reimburse members any money they spent on the league and calculate its costs at a 10% rate of the insured value plus fees. Another small business cashing in on fantasy football is FantasyDispute.com. This website will resolve fantasy sports disagreements for $14.95. This website pledges to “Keep the integrity of each fantasy league at the highest degree.” Another business that could arguably be benefiting the most from fantasy football is NFL RedZone. This channel only shows plays from live games where offensive teams are inside the opponent’s 20 yard line (the red zone). This channel shows you every scoring play live. Paul Charchian chairman of Fantasy Sports Trade said “[NFL RedZone] is crack for fantasy players,” said Charchian. “The NFL RedZone channel is specifically targeting us, the fantasy crowd. It’s a huge program.” All of these business and channels I just mentioned don’t just compliment fantasy football, but they spur its growth.
I think the fantasy football industry is an emerging market. The industry doesn't have a dominant firm or any standards on technology, all of which make it an attractive industry for businesses. The fantasy football industry is still evolving and realizing its potential. The marketing efforts behind fantasy football will be significantly more important in the future as competition grows. I believe we will see more efforts by hosting sites like ESPN and Yahoo to marketing their websites’ league. The importance of television networks offering channels like NFL RedZone or Sunday NFL Ticket will have to become standard in their package offerings. We may also see more fantasy football specific shows on television. The technology and apps that support fantasy owners will continue to improve as well. The fantasy sports industry and especially fantasy football are an attractive industry for business’ to compete in.
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