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Fantasy World
Chris Ballard
June 21, 2004
These three play. Your neighbor plays. Your boss plays. Everybody plays. Once the secret preserve of stats geeks, FANTASY SPORTS are now a billion-dollar business
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June 21, 2004

Fantasy World

These three play. Your neighbor plays. Your boss plays. Everybody plays. Once the secret preserve of stats geeks, FANTASY SPORTS are now a billion-dollar business

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The crowd could be delineated neatly into a) the many who were desperately trying to crack the fantasy market, a segment that included (somewhat surprisingly) USA Today and SI.com (which recently upgraded its fantasy engine but still trails the leaders); and b) the few from well-established sites, namely the big three of SportsLine.com, ESPN.com and Yahoo. Of that trio, SportsLine provides the most telling case study.

In 1996 SportsLine employed three people to run its fantasy operation; today 50 contribute to the site's fantasy portion, including an editorial staff of six (meaning six people are paid to ruminate upon whom you should pick up off the waiver wire). Of the company's $57.6 million in revenue in 2003, $15.9 million, or 28%, came from fantasy sports, a 34% increase over '02. SportsLine's NFL-partnered fantasy football attracted 1.3 million paid users last fall, according to a study done by Nielsen/Net-Ratings; that was more than the next four sites combined. As for what's driving the sports site's traffic, consider: Of the 2 million people who visited during the month of October, 1.32 million were fantasy players (who then stayed an average of one hour and 42 minutes, or long enough to see an awful lot of banner ads). Says Scott Engel, SportsLine's senior producer of fantasy sports, "I've seen our game 50 from having a minor cult following to being a major part of our success."

For its part Yahoo has built a reputation on its free games—more than a million people are playing free fantasy baseball this pear—and recently upgraded its editorial staff by hiring Brandon Funston away from ESPN.com. Not that such a move will really hurt ESPN. The company doesn't disclose its revenue numbers, but ESPN.com senior vice president of business operations and programming John Kosner estimates that fantasy accounts for 15% to 20% of the site's traffic, and he speaks in glowing terms of its future, touting the potential of "easy fantasy," week-to-week games that appeal to casual fans. ESPN's big advantage, of course, is synergy. Eric Karabell, a former Washington Post writer who is now the network's fantasy expert, appears regularly on ESPN News, has a column in ESPN the Magazine and a weekly hourlong radio show online. His televised commentary drives people to the games on the website, and those games drive people to ESPN to watch "their" players perform. It is a neat little cycle of consumption.

The scary part is, this is just the beginning. Fantasy cricket is huge in India; fantasy football (that is, soccer) has caught on in England, and fantasy thoroughbred racing is the rage in Hong Kong. The fastest-growing fantasy sport is NASCAR. (In what business isn't NASCAR the fastest-growing segment?)

Already, major consumer companies are trying to capitalize on fantasy sports. Best Buy, the home electronics chain, will unveil a fall marketing campaign centered on its own branded fantasy football game (to be powered by fanball.com and for which Best Buy will distribute more than $20,000 a week in prizes). The company's research found, not surprisingly, that men who bought high-definition TVs also played fantasy football. EA Sports, the video game maker that produces the Madden NFL series, is close to signing a deal with the NFL Players Association that includes a "fantasy license" under which future versions of Madden will potentially allow users to play with teams made up of their fantasy rosters. (The idea is as meta as they come: to play a virtual game based on a virtual game based on an actual game.) Given the trend, it's not all that unrealistic to imagine that 10 years from now a league—say, something like Arena football or a circuit based on a previously obscure sport—will be founded by a partnership between a multinational company such as McDonald's and a fantasy provider. McFantasy Frisbee: I'm Lovin' It.

The original games have now been around long enough that today's pro athletes grew up playing them. While with the Phillies, Curt Schilling started a football league and rented out a hotel suite for a catered draft that was announced by Phillies play-by-play man Harry Kalas. Red Sox pitcher Derek Lowe, who plays in a NASCAR league (and used to be in a foot-ball league), says.' "I can remember in 2001. when I was stinking as a reliever, people were yelling, 'You're killing me on my fantasy team!' I didn't understand it back then because I wasn't involved in this stuff yet, but now I do. I know I get pissed off when a guy on my football team is struggling or a NASCAR guy blows an engine." There's a French connection in a fantasy NBA league that includes Atlanta Hawks rookie reserve guard-forward Boris Diaw, San Antonio Spurs point guard Tony Parker and Gonzaga forward Ronny Turiaf (who played together on France's national team). Says Diaw, who averaged 4.5 points this season, "I chose to take myself—and I don't think it was a good choice."

No professional player has been accused of conflict of interest because of involvement in a fantasy league based on his own sport, and there are no rules about fantasy participation. The closest thing to a fantasy arrest came in 1991, when a firefighter in Florida was fired and charged with misdemeanor gambling for running a baseball league that had a $5,000 prize. (The charges were later dropped.) "The [main] legal issue is whether the games fall under lottery laws—games of chance—or whether they're games of skill, which are [not subject to regulation in most states]," says William Heberer, a lawyer with the New York City firm of Manatt, Phelps and Phillips who specializes in advising clients on sports gambling issues. "So far, they've always been considered games of skill, and there hasn't really been a challenge to that at all."

All this is fine—surely we will sleep better knowing that every Flyers fan with a cable modem can legally play in as many fantasy hockey leagues as he wants—but it doesn't address the larger question of whether fantasy sports are a good thing. It is a simple question with a complicated answer.

Fantasy sports might go against the nature of the true fan—that is, one who roots for a real-life team—but one could argue that they are merely a reflection of real sports in the age of free agency. When neither players nor owners feel any loyalty other than to their bank accounts, why should fans be any different? Maybe a fantasy team is the last vestige of control fans have, keeping them connected to a game in which a real team's players and uniforms change every season. Playing a fantasy game undeniably makes a fan more knowledgeable; pre-Rotisserie, there was little reason for anyone outside of Milwaukee or Adanta to care who batted sixth for the Brewers or to track the assists of the Hawks' backup point guard (and, in the case of Atlanta, one could argue that even those in the city had no reason to care). Rotisserie players also gain an appreciation for the inner workings of the sport; after all, Okrent formulated his seminal eight categories by using the Baseball Encyclopedia and studying 10 years of NL East stats to see which indicators best correlated to winning percentage. (That's why stolen bases were included instead of on-base percentage.)

Then there is the camaraderie. Fantasy leagues are similar to pickup basketball games; they bring people together. In fact, one could even think of all those hours spent hunched over box scores as an investment in brotherhood. In one long-running New York City fantasy basketball league, there is a father-and-two-sons team that has used the game as a means to repair a relationship strained by the father's divorce. In the same league another player routinely flies in from Cleveland just for the draft, allowing him to see old friends.

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