4/3/2012 5:56 PM ET|
The real money of fantasy sports
The teams may not be real, but the economic impact is: About $2 billion a year when players' related spending is included.
It's a pastime rooted more in make-believe than in reality, but fantasy sports leagues are major players when it comes to the revenue they generate -- an estimated $800 million a year in North America.
That money is real and growing. If fantasy leagues were a corporation, they could soon push into the Forbes 500.
There are 34 million fantasy sports players in the U.S. and Canada, and the numbers are growing by 2 million a year. And that's drawing advertisers to this seemingly recession-proof market.
The typical player has time to spare and money to spend: He's a 40-ish white-collar married man with a household income of $92,000 a year, according to the Fantasy Sports Trade Association, an industry group. On average, that fan spends three to eight hours a week playing.
Factor in the typical player's consumptive behavior: Compared with other sports fans and the average consumer, he is more likely to attend sports events, dine out, drink beer, travel, buy apparel, subscribe to sports networks and purchase the latest high-tech gadgetry, according to a 2009 study by market research company Ipsos.
A growing number of women play, too -- about 20% of the fantasy total, or around 5.2 million.
Fantasy websites generate revenue from advertising and subscriptions, with ad revenue typically exceeding the amount paid by players, sometimes by a lot. The sites tend not to discuss how they make their money, but industry analysts say ad revenue is based on a rate of anywhere from $2 to $10 per 1,000 page views.
All told, the economic impact of fantasy sports has been estimated at more than $2 billion a year, including advertising, player fees and players' related spending. That puts fantasy sports in a league with names like Burger King, Bose, Hostess, Foster Farms and Mary Kay.
|Fantasy league participation by sport|
|NFL football||23.8 million|
|NCAA football||4.8 million|
*Ages 12 and up. Millions play in more than one sport.
Source: Fantasy Sports Trade Association
How to play in a league
Here's how fantasy leagues work: Participants form pretend teams of athletes from across entire sports, and their teams compete against other teams in the same fantasy league. An "owner" of a fantasy baseball team, for example, might have the New York Yankees' Derek Jeter as his shortstop and the Los Angeles Angels' Albert Pujols as his first baseman.
Athletes' actual statistics determine the outcomes. During the season, fantasy sports websites keep track of player stats and, from those, determine league standings. Fantasy competitors make trades, drop slumping players, pick up promising newcomers and deal with injuries -- almost like real-life general managers.
Most fantasy participants play for bragging rights and a little money. As vices go, it's a pretty harmless pastime. But don't underestimate the intensity and passion, which has been known to create friction.
Players have checked in on their teams during dates, holidays, wedding receptions, pauses during childbirth, honeymoons, funerals and, of course, on the job. For instance, Easter and the beginning of Passover won't stop a fantasy baseball group called the TransAmerica League (its 10 members are spread across the U.S.) from gathering in a major-league city for Opening Day weekend, as it does each year.
"Committed players spend nine to 12 hours a week, and not just watching sports on TV," said Paul Charchian, the president of the Fantasy Sports Trade Association and owner of a fantasy league escrow company, LeagueSafe. "This is managing their roster, proposing trades" and being active in their leagues.
Winning is a great motivator, but for the vast majority, winning money is not.
"Serious gamblers don't play fantasy," Charchian said. "The average entry fee is about $70. Five dollars a week (over the season) is half a hand of blackjack. The motivation is primarily social."
Not only that, fantasy leagues have become part of culture. A TV sit-com on FX, "The League," is based on characters in a fantasy football league. The show is in its third season.
In the movie "Knocked Up," Paul Rudd's character, Pete, hides his fantasy-league obsession from his wife -- a part of Rudd's role that resembled his life at home, according to The Hollywood Reporter.
Passion for these sports has always been there. It's the Internet that has brought the millions together. In pre-Internet days, when a high of 3 million people played fantasy sports, you had to pour over newspaper box scores for hours just to compile a day's worth of stats. That limited the number of leagues, because relatively few fans had the time and inclination to do all that work.
Now, stats are produced instantly, allowing players to easily compete with friends or against a nation of players.
Books, magazines and websites feast on this interest. Cable sports channels devote entire programs to fantasy viewers. ESPN had a 90-minute fantasy baseball preview in March, with a panel of experts projecting player performance and pitching draft strategies. Sirius radio launched a 24/7 fantasy sports channel in 2010.
Fantasy football dominates. More than 75% of those in fantasy sports are in football leagues.
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