YO BRO IT’S ME LITTY

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On most autumn Sundays, you can find me on my couch in my own little fantasy world. More specifically, I’m in my own little fantasy football world. I have one eye watching football on television but the rest of me is frantically switching between tabs on my web browser following multiple games on CBSSports.com Gamecenter. It’s a crappy way to follow a game, but I can’t help myself. I suffer from acute anxiety if I’m at a bar or a friend’s place and I don’t have my laptop spitting out the last play instantly. It’s a shame spiral that I deal with each Sunday afternoon as I spend half my day in my underwear watching data feeds. Heck, I would probably inject the live stats directly into my brain if somebody invented a way to do that.

I’m not going to turn this blog post into a recap of my fantasy teams (although I kind of want to do just that). I’m currently in two football leagues and still in playoff contention in one of them and I’ll leave it at that. One piece of advice for all you L-Hoops readers — Telling others about your specific fantasy players, trades or games is kind of lame. Your one tenth of a point victory on a Matt Cassel kneel down with five seconds left in a Monday Night Football game might be the most exhilarating part of your week, and you can certainly throw the taunting text to the chump you beat, but the reality is that nobody else in the world outside of your league gives a damn. So when you are out in public with others who aren’t in your league refrain from the urge to share your fantasy exploits – letting people know you sit on the couch staring at Gamecenter should be your own little secret (even if we all do it).

So instead of sharing the details of my three headed monster of Gore/Brown/Turner I want to lay down some thoughts on the evolution of fantasy sports and where I think it is headed in the future.

I first played fantasy baseball in 1992. The computer company that had set up the CRM and inventory system (think pre-windows and pre-online) for my father’s footwear business invited him to join their rotisserie baseball league. After getting permission to bring me along to the draft (the rest of the guys at least tripled my age in their 30′s or 40′s), we drove into the city one Sunday afternoon for a live auction draft. I fell in love with fantasy games that very day. Getting a rookie catcher named Mike Piazza for 50 cents was my first great fantasy move! The weekly stats would get faxed to my father’s office every Wednesday afternoon. After a few weeks I would beg and cry my way into having my mother drive me to my father’s office after school so I could sit by the fax machine and wait for the stats. Once I had the actual printed copies in my paws I would pour over them for hours upon hours and then finally announce to my dad the trades we needed to make. My dad would call up guys he hardly knew to propose a deal but before he could even get out the offer I would grab the phone and start negotiating a deal with them. I think they were more amused in having an eleven year old talk shop more than they were interested in making the lopsided deals I most certainly proposed. One day I opened Newsday and saw the headline “Hard Hittin Mark Whitten” had tied records by hitting four home runs and driving in twelve RBI’s in one game. I swear it still is one of the happiest moments in my life!

I would go on to start fantasy basketball leagues in middle school. I would go to the library every Tuesday to get the updated basketball stats from USA Today. After fruitlessly attempting to photocopy the entire page and running out of dimes, I would take the paper into the library bathroom and steal the stats page in the bathroom stall. I always figured I could atone my sin next Yom Kippur. In high school, I somehow got involved in my friend’s father law firm league only to end in controversary when I lost a third place tiebreaker and told the head partner at the firm that they were taking advantage of me because I didn’t have a law degree (let alone a high school degree). I also began playing the Sporting News Fantasy Leagues with my buddy Greg (shout out to the Bar Mitzvah Boyz) where you would actually call in transactions.

When I first started messing around with the Internet I realized it was the perfect platform to enhance fantasy sports. Thanks to the digital dawn, fantasy sports have exploded in popularity in the last decade and it is one of the major factors that drive both revenue and popularity of professional sports. The numbers are staggering. The Fantasy Sports Trade Association, recently estimated that almost thirty million people participate in some form of fantasy sport games. Fantasy Football is the most popular game with about thirteen million annual players. After football, the most popular fantasy games are baseball, basketball, hockey, NASCAR, Golf and NCAA March Madness pools.

The data is just as impressive when you analyze how sports fans spend their time online. Fantasy sports players represent 20 percent of the unique users of sports websites but consume 80 percent of the sports content. Many players also spend actual $$ online to get live stats, expert analysis or for their league management. The engagement is astronomical. If you doubt it, think about how often you are checking your fantasy teams. Think about if your boss knew the answer! For many people, fantasy borders on an obsession or an addiction (for real).

While fantasy is certainly a nice online business (it is estimated that half of the $700-$800MM in ad revenues attributable to online sports is related to fantasy) I believe that most sports leagues, teams and big media are missing the bigger picture. Fantasy has become so engrained in sports fan’s behavior that it influences almost every aspect of professional sports and the fan experience.

Think about Sunday Night or Monday Night football. You watch it (or at least get more excited) because of the fantasy implications of the game. DirectTV’s NFL Sunday Ticket and their amazing Red Zone channel is a product that is almost totally driven by fantasy sports. Now think about Sportcenter and NFL GameDay. You watch them in part to prepare for fantasy. Chances are you have figured out how to get you fantasy scores on your phone and it was probably one of the first web applications you figured out and have the patience to wait load. Almost every interaction a fan now has with their favorite sports is influenced by fantasy.

So it would make sense for leagues, teams and media companies to spread fantasy sports to the furthest reaches of the planet and reap the benefits of the cash cow product. But it seems like the sports media world is slow to ride the cow. The leagues have tried to limit the spread of their statistics by levying substantial licensing fees to companies that provide fantasy sports games. While the courts ruled against them, there still seems to be a lack of appreciation and respect for fantasy sports. I recently attended a sports media and technology conference in NYC. The event was in part sponsored by the FTSA and had a big fantasy bend. But when the head of the new 24/7 MLB Baseball cable network was asked about fantasy he said that they had no plans to focus directly on fantasy baseball content. What? Doesn’t it seem like fantasy junkies would be the exact audience that would crave a baseball network at any hour of the day. Baseball is my favorite sport in the world yet I ask myself wondering if what we really need is another place to watch baseball. Heck, I would make fantasy the #1 initiative for the new network.

In terms of the actual game providers, the big three have traditionally been Yahoo, CBS Sports and ESPN. All three of those companies make a healthy chunk of change running their fantasy product. But all three have also become quite complacent and spend more resources and strategy figuring out how to sell sponsorship packages and monetize their fantasy games than how to improve their product and continued growth. If you think about it, the fantasy game you are playing today is almost the same exact game you were playing five or six years ago. Now think about the other things you do on the internet now and compare it to what you did at the turn of the century and it is clear that fantasy companies are not investing in product development.

So now you may be saying “but Hoops, fantasy is already perfect. How can it get even better?”. I believe the innovation is practically limitless. The appeal of fantasy is the interactive nature in which you can control your rooting interest and compete against others to show off your competence and sports acumen. While many leagues do wager money for the season, it’s not considered gambling because people play to compete and the reward goes well beyond monetary prizes and focuses on ego, recognition and bragging rights. In this context, you can create just about any kind of interesting game and create an online community around it and watch it take off. It amazes me that there have not been more hits with new forms of fantasy games such as MLB’s Beat the Streak or ESPN Streak For Cash.

So now is the part where I get to drift off a bit and tell you that I actually created the first ever full-fledged draft and trade college football fantasy game for CSTV in 2005 (i just checked the URL and despite cstv.com no longer existing the fantasy homepage is somehow still intact here and I must say it looks cooler than i remember). CSTV was quite the entrepreneurial driven culture and I pitched the idea of a fantasy football game to our CEO. I outlined how it would drive online traffic and engagement, create a new revenue stream through advertising and game fees, and even allow the television network to focus programming around fantasy as a way to draw fans into the games on CSTV (at the time their rights were quite limited and there is only so much national interest in Tulane vs. UTEP). It seemed like the perfect product, a no-brainer, and it baffled me that everybody didn’t see it that way. I’m not sure if I ever got the official green light or just that nobody said no to me. I traveled down to Dallas with my buddy Blake in sales and we were pretty much able to sell a title sponsorship to Citi before our lunch was even served. Once their were hard dollars associated with the project, the more senior executives all took a step back and were curiously bemused to see if I was able to pull off the launch of the game by the start of the college football season. I spent that entire summer in high gear spending all my energy, time and brainpower trying to make this thing actually work. I was responsible for product development, marketing, partnerships, customer service, design, content editorial and just about anything else that was associated with the project. At one point the CFO started questioning the project, so I brazenly whipped up a horrific financial model to show the millions of dollars fantasy would generate in the next few years. Basically, I was twenty-three years old and had no clue what I was doing, and because of that, was inexperienced and green enough to believe that I could pull it off.

I was well on my way when a few weeks before the season a few athletic department partners started questioning fantasy sports connection to gambling. Then the NCAA refused to endorse the game even after we stripped away all fees to play (and just relied on advertising revenue). They were concerned that student athletes play could be influenced by their desire to win at the CSTV Fantasy game. It all seemed preposterous to me until the CEO curtly and explicitly explained to me the importance of this fantasy game for the company (not very) and what would happen if we jeopardized our relationship with the NCAA over the product (let’s just say it wouldn’t benefit my career path). A shout out to MJ, who guided me just enough to prevent this 23-year-old to burn out of a nervous break down at their supposed dream job.

We were able to modify the game to acceptable standards and actually enjoyed some decent success in our first year. We had over 5,000 players participate and had some decent activity in our fantasy section. But the incident with the NCAA and the sheer effort it took me to put the program together took it’s toll. When I left the company at the end of the year, nobody was crazy enough to take over the fantasy baton without a budget, executive support or any resources. But in all the projects I worked on at CSTV (now CBS College Sports) fantasy had the most potential waiting to be unlocked.

It’s been three seasons and college fantasy football still has not taken off the way I thought it will. This year, CBS finally created a game that used player’s actual names (my game just included the school and the position) and even Myles Brand, the head of the NCAA, actually tacitly approved fantasy games in college sports by saying that “the sky is not falling” and fantasy is “less than it seems”. But it baffles me that a company has yet to make college fantasy a priority. With hundreds of teams, college is a perfect platform for fantasy junkies. March Madness brackets pretty much invented fantasy sports. Make college fantasy mainstream and think about College Gameday and the increased popularity of those mid-week ESPN games! The companies that should be leading the way are the NCAA, Big Ten Network, CBS College Sports and ESPN!

So what’s the big idea that will take fantasy to the next level? Like many digital products, the fantasy game publishers need to open up their platform. Instead of relying on internal development to spur on growth of new games, leagues and game providers should make their platform and data feeds available for anybody to create their own games. Just like Facebook has allowed companies to create new applications, fantasy providers should give developers the tools to create new games, variations of current games and stat feeds to help players make better fantasy decisions and further connect to their fantasy desires! There is such passion in fantasy, that surely a community of developers would flock to build cool applications for this highly engaged community of players.

For example, I would love to compete against more than just the other 9 teams in my league. Why not measure my performance against my league against other teams performance in their respective leagues. Then match me up on a weekly basis against teams in other leagues that have a similar structure, degree of difficulty and success in their own league. Think of it as an ACC-Big Ten challenge between fantasy leagues! Give me a “fantasy record” that tracks all my teams (in all the leagues I play in) and shows my overall record, winning percentage and leagues that I’ve won.

All this and more is very doable for the first big fantasy company that really wants to invest in product development. It would shock you to learn about the bare bones product resources that the big fantasy companies maintain (or maybe not since some companies have had trouble with their fantasy games in recent years). But the big players in fantasy have become complacent watching the dollars roll in on the existing game for them to push ahead. The smaller, independent fantasy companies are mostly built around content, and in some cases community and often don’t have the revenue to focus on product development. A new start-up in the fantasy space focuses on aggregating and monetizing smaller fantasy stats. That might make lots of $$ but it doesn’t address the bigger opportunity to take fantasy to the next level.

I’ll end this post by getting back off my high horse and bring a moment of Littyhoops levity your way. In one of the fantasy leagues that I play in I partner with my buddy Blake (same Blake I sold the original fantasy sponsorship with in Dallas). It’s a 14 team football league and the other guys in the league are Blake’s buddies from college and their friends. Most of the guys are in their mid 30′s and married with kids. The message board which is lame with fake beef and whining is even more pathetic when you don’t even really know the guys. Every year Blake convinces me to continue to partner with him because he doesn’t want to pay the steep entry fee (but the reason he gives me is that it’s a good way to keep in touch). Last year we somehow miraculously put together a second half run that bordered on total dominance and we won the championship. In true tradition of Moe’s Tavern League the winning team needs to make a speech when they accept the Moephy Cup at the next year’s draft. With Blake away in Vegas, he left me stranded to give a speech to a bunch of old dudes who really have no clue who I am. Here is the result. I’m no Obama but did get a few laughs. The password to watch is “littyhoops”. If you are reading the email version, click on this link and scroll to the bottom to watch.

 

 

Much of the factual info in this post came from a research briefing called “Online Fantasy Sports: Growth Outlook Intact for this Broad-Bsed Niche” written by Laruen Rich Fine for ContextNext Media.