When the National Basketball Association tips off its 2008-09 regular season tomorrow, more than a million general managers will be making their final roster cuts, scouting their next opponent and working on potential trades.
No, the league hasn't undergone a massive team expansion over the summer. Instead, couch potatoes around the world will put their managing skills to the test in thousands of NBA-based fantasy sports leagues.
Once considered a cottage industry for avid, geek-like sports fans, the fantasy sports industry has blossomed into a $3 billion business supported by big multimedia companies like ESPN, CBS and Yahoo, and sponsored by blue-chip advertisers like Coca-Cola and Toyota.
Fantasy games are flourishing. Leagues cover just about every major sport, including pro baseball, football, basketball and hockey, as well as such obscure offerings as bass fishing.
But what's not obscure is the fantasy genre itself: More than 20 million consumers participate in fantasy sports leagues, from college friends trash talking each other in an free ESPN basketball league to hard-core fans playing for a $1 million prize in the Fantasy Football Open championship.
Cable sports networks are scoring as a result of the burgeoning fantasy sports business. Web sites such as ESPN.com are enjoying traffic growth as fantasy users frequently check their team lineups and search for updated information on players.
Fantasy leagues are even influencing programming decisions. On-air, national and regional sports networks now serve fantasy fanatics by adding more statistics and fantasy reporting in traditional sports news-and-highlights shows.
“At the very core of it, a lot of people have a dream of being a general manager for their favorite team,” says Raphael Poplock, vice president of games for ESPN, which offers fantasy games in several sports including NASCAR, college basketball and bass fishing. “It's very easy for sports fans to second guess the pros from their couches, so fantasy enables them an entrée to create their own team and manage it to the best of their abilities.”
Perhaps the most powerful draw of fantasy leagues for the mostly male fan base is that it allows them to manage all-star pros Kevin Garnett, Peyton Manning or Derek Jeter as part of a make-believe team. Typically 10 to 12 “owners” gather together at a draft to create teams by choosing from a pool of the top players in a particular sport.
If you have the first pick in a typical NBA fantasy draft for example, you can choose LeBron James to be on your “team.”
Throughout the regular season, these teams compete against each other via a scoring system based on the players' real stats.
In the late 1980s, a fantasy baseball sports-league “commissioner” had to meticulously collect every double, triple, home run and strikeout from every hitter and pitcher in baseball and assign points to each team based on those statistics.
But the advent of the Internet in the-mid 1990s allowed sites like CBS SportsLine, Yahoo! and ESPN.com to cull up-to-the-minute statistics and team standings for leagues — and that led to an explosion in fantasy play.
Fantasy Sports Association president Rick Wolf also said the Web allowed friends and family members to remain in buddy leagues even if they're spread out around the globe.
“When the ability to run your leagues online became easily available with CBS SportsLine in 1995, it jettisoned the ability for you to get together with your buddies even when you weren't in the same room,” he said. “A lot of leagues that would have ordinarily broken up stayed together.”
More than 80% of all fantasy sports games are based on the NFL. That's because pro football's weekly schedule makes it less time-consuming for players to set their lineups, compared with Major League Baseball, the NHL and the NBA, which play every day or several times a week. And apparently, armchair GMs spend a lot of time managing their teams from the office: research group Challenger, Gray & Christmas estimated that on-the-job research for fantasy football teams will cost U.S. employees $9.2 billion in lost work time.
According to a University of Mississippi study, 96% of all fantasy players are male with a surprisingly older median age of 41 years. Further, 67% of players are married and their average income is $79,000.
One big reason media companies such as ESPN like fantasy players is because they are constantly checking the Web for statistics and breaking news in an effort to get an edge on fellow team owners. ESPN's Poplock said fantasy sports players in 2007 spent more than 4.5 times the amount of time on ESPN.com as the average person.
For Yahoo! Sports, which has been offering fantasy sports games since 1996, it's an even bigger slice of the site's overall-usage pie. According to the FSA, 47% of all Yahoo! Sports traffic is driven by fantasy sports-related content.
Yahoo! Sports' more than 9 million fans playing more than six different fantasy games in 2007 spent more than one hour per day on the site on average, nearly double that of the typical user, according to Jimmy Pitaro, vice president of Yahoo! Sports & Entertainment.
The fantasy user is atypical in that he's a lot more engaged than the typical Yahoo! Sports fan,” he said. “That user is much more valuable to us … he's more likely to watch video on the site, to read our stories, our original content and to check out our sports blogging pages.”
That has translated into advertising and sponsorships for Yahoo! Sports for its fantasy product. Pitaro said the site has been able to attract Fortune 500 sponsors such as Toyota, Reebok, Coca-Cola and Chex Mix to sponsor parts of its fantasy offerings.
“It's a profitable business for us not only on the premium side but also on the advertiser side,” Pitaro said, although he would not reveal specific revenue numbers.
Originally developed to raise worldwide interest in fantasy sports, The Fantasy Sports Association is now committed to raising awareness on Madison Avenue for the category, according to Wolf. The association is in the process of conducting research to compare fantasy sports fans buying habits with that of mainstream sports fans and the general population in an effort to attract more advertisers to fantasy sports products.
These days most major sports television outlets and shows, such as ESPN's SportsCenter, devote on-air time to fantasy sports content.
“Fantasy has changed the way pregame shows and postgame shows and even the within-the-game [shows] report on the game,” said NFL senior vice president of digital media and media strategy Brian Rolapp. “They don't necessarily call it fantasy, but you will see it will be hard to find a situation where if someone is promoting the [game] score, you won't see detailed player statistics, whether on a bottom-screen ticker or an on-screen graphic. Producers know that people are looking for more than just the score of the game.”
While providing a nod to fantasy statistics during SportsCenter and in its other sports news-related content, ESPN is integrating fantasy-related video content on its ESPN.com fantasy sports landing pages.
For example, anyone connecting to ESPN.com's Fantasy Football front page will automatically see a two-minute segment from the Web-based daily Fantasy Focus show, according to Poplock. The move is a strategic change from offering 30-minute shows like its popular weekly Fantasy Insider, telecast on ESPNNews last year.
“While standalone shows are successful, we want to now bring some of those exclusive shows onto our digital-media properties, where our fans can navigate between those shows and their actual fantasy rosters and fantasy communities,” he said.
Yahoo! Sports has also developed exclusive video content for the Web to support its Fantasy Football game. The company's Sports Emmy-nominated Web series, Fantasy Football Live, provides players with the most up-to-date, timely fantasy information and allows consumers to call in or send e-mail to the show's hosts. Thus far, the show averages 200,000 streams per week, according to Pitaro.
Yahoo, in association with the NHL, is also providing video content as part of its NHL fantasy game — the first such collaboration between a pro league and a non-affiliated Website. Combined, the two companies drew around 1 million fantasy players in 2008.
Said Yahoo!'s Pitaro: “If you have [the Pittsburgh Penguins'] Sidney Crosby on your team and he scores a goal, pretty soon after he scores that goal, in your fantasy stat tracker you'll see a link to pop a [video] player to watch him score that goal. This is the first time that a fantasy provider is including player-specific highlights as part of the game.”
“We think the advertisers will follow,” said NHL senior vice president of sales and business development Larry Gelfand, who predicted the arrangement will net a minimum 40% jump in fantasy hockey users.
The NFL's Rolapp said the NHL-Yahoo deal represents the further expansion of fantasy from a text- and statistics-driven experience to more of a multimedia play for consumers. The league's own fantasy sports game on NFL.com is complimented with video highlights exclusive to the site.
“The integration of video is something that we think a lot about and will increasingly become a trend that we'll look at,” said Rolapp.
With competition at a premium for fantasy sports aficionados, network and league executives say new technological advances, such as increased statistical information and distribution-platform extensions, will continue to make fantasy content more appealing to consumers.
“Right now, on your fantasy page, you can see that Peyton Manning throws a pass to Marvin Harrison for 10 yards,” said Rolapp. “What you don't know in the data is the pattern Harrison ran. Did Harrison catch it for five yards and run for another five yards? How fast was he going? These are the types of stats that you can use to make a differentiated fantasy game and Internet site.”
Yahoo!'s Pitaro said the integration of technology solutions that will create more robust communication between league members — improving things like “smack-talking” between players, message boards and alert functionalities — has the potential to draw both hardcore and casual sports fans to the fantasy arena.
Also, the ability to reach fantasy players on alternative platforms like mobile phones will keep players engaged even if they're not in front of a computer. This year, Yahoo! Sports implemented a feature that allows users to edit their lineups on the phone in realtime.
The NFL and ESPN also offer mobile applications that gives viewers the ability to make trades, add or drop a player and trash talk opponents. The Disney-owned company recently launched a Web/mobile game dubbed “Streak for the Cash,” a daily pick game where players have to guess the winner of that evening's NHL or NBA matchup or how many goals will be scored in a soccer match. The contestant who puts together 25 straight correct guesses first wins a $1 million prize.
“It's a priority for us … we will not generate a fantasy game without a strong mobile extension,” said ESPN's Poplock.
Despite doubts that there's a limit to fans' interest, Wolf expects the fantasy game genre to experience double digit growth in both revenue and overall participants over the next five to 10 years.
“More than 27 million people have played a fantasy game in their lifetime, but that means that 89% of Americans have not tried it,” said Wolf. “It's mainstream now, and it's on everybody's radar, so I don't think its close to finish peaking.”
But the NFL's Rolapp has reservations. “We're as interested in anyone in seeing the category grow, but there might be a limit to the number of people who play a complex level of fantasy,” he said.