The Fight For Fantasy Football
It's often said that there are two certainties in life: death and taxes. But us cynics know that there is at least another -- where public interest and large profit margins exist, so soon will corporate America, and with it greed and corruption.
And so goes the story of fantasy football, a hobby of sorts for football enthusiasts. The name is somewhat unfitting; if you've never played fantasy football, you might think it's a role-playing game or a board game with dice and a slick-coated cardboard surface. It is neither, but rather the closest thing most fans have to running a real, live football franchise. The setup is simple: organize a group of your closest friends, pick a day when everyone can be present, and take turns selecting real football players. Then, when those players take the field on Sunday, you get points for how well (or poorly) the players on your team perform.
I can say with a straight face that for most of its existence, the emphasis has been placed on good-natured fun -- bragging rights, if you will. Although most fantasy leagues have a pot for the winner (usually $100 give or take a few bucks), that's rarely the motivation for people to play or why they are competitive (and in many cases, fanatical) about the hobby.
But the NFL, through its players association, has turned fantasy football into a pay-for-play hobby. Yep, the same folks who a year ago inked a six-year, $8 billion dollar deal for future television rights and who raise considerable revenue through apparel and sponsorship agreements, have their sites set on tapping into fantasy geekdom, too. Fantasy football is putting up a fight Ã¢â‚¬Â¦ well, as good of a fight as a geek can raise against the schoolyard bully, anyhow.
From the locker rooms to the board rooms
The game's origins actually stem from the Oakland Raiders organization in the early 1960s. The minority owners of the team -- most of whom made their money in the tile business -- began a league (fantasy baseball came a few years before). I once asked Ron Wolf about it. Wolf, who constructed the Super Bowl champion Packers of 1996, was a scout in the Raiders organization for many years, and was often asked to critique players for a few of his bosses who invented the hobby. He said it was a big deal then, but it was nothing he imagined would blossom into the multi-million dollar industry that is played by more than 20 million Americans today. And today is when greed rears its ugly head.
A dozen years or so ago, fantasy football hit a boom. There was enough interest from advertisers that magazines such as Fantasy Index, Fantasy Football Pro Forecast and Fantasy Sports could hit the shelves every July and August (this summer there were more than two dozen fantasy football magazines on the market). The computer whizzes at Daedalus developed sophisticated software that enabled fantasy enthusiasts to host leagues online. It was the Golden Age of fantasy sports.
Around the same time, the National Football League was also growing. It expanded from 28 to 30 teams (it now boasts two more) and business was as good as ever. But fantasy football? The league refused to acknowledge its existence, and didn't for a good number of years afterwards.
The fantasy boom continued, and soon entrepreneurs were making large sums of money offering services online -- services like in-depth player analysis and league manager systems -- to participants in contests worth loads of money to the winner. The throwback fantasy player, used to keeping track of scores on legal pads, may have protested, but this type of growth was healthy. It was, after all, the little guy who was taking those risks to start companies and in turn making the profit. And the little guy in most cases was a fantasy geek to begin with, so all of that growth stayed inside of fantasy football's little circle. It's comparable to the times before Wal-Mart, Staples and TGI Fridays, when businesses were small and local and modest, yet still somehow successful.
Then DirecTV came into the picture. The satellite television company struck a deal with the NFL to sell a seasonal package that included every game that was not a prime time event. Who would buy such a package? For years, the vast majority of football watchers only paid attention to one team -- their own, the one that existed within a few hundred miles of their home, and the one that was readily available through basic cable. But somehow DirecTV sold a ton of these NFL packages to people all over the United States (enough so to give the NFL $3.5 billion to renew the deal another five years).
And why? Because fantasy players in Wisconsin wanted to watch San Francisco quarterback Steve Young play. Because a fantasy player in Dallas wanted to keep tabs on Washington running back Stephen Davis. And thus fantasy football revolutionized the sport of football -- Philadelphia Eagle fans now cheered for the Cardinals, and Falcons, and Seahawks. There were no boundaries, no limitations, and the viewing market grew exponentially overnight, or so it seemed.
But still, even at the start of the 21st century, the NFL refused to acknowledge the hobby's existence (the league also refuses to acknowledge the weight gambling has on its sport, yet places a great amount of emphasis on its weekly injury reports and does not seem to shy away from lines or odds).
Stacking profits atop profits
About five years ago, the NFL Players Association began sponsoring Fantasy Sports Trade Association events. The NFLPA paid attention with great detail to who was selling what, and how much money was being made. Not long afterward the NFLPA began asking sellers of fantasy league software and contests for licensing money. A $25,000 annual fee may have seemed small to the NFLPA, but it wasn't so small to many of the businesses. The original list of licensees was small; and it still is today, with just more than a dozen or so licensees. But there were extra dollars to be made, and by golly the NFL players were entitled to theirs.
Around the same time, NFL.com began servicing its customers with premium fantasy information. CBS Sportsline (which purchased the Daedalus software) was servicing millions of people with its free league manager. In 2002, however, CBS cut off the freebees and now charges $149.95 per league. They've had great success. ESPN has league manger products, too, as does The Sporting News, and Fox, and just about any other major company you can think of.
But in the past year things took a turn. The NFLPA announced it would only license its product through the end of 2005, denying small businesses with modest bottom lines the kind of long term security they needed to survive. Those companies that refused to pay for licenses were given a cease and desist order and threatened with legal action. Some companies fought back (one even filed suit against Major League Baseball claiming it had no right to license player names or stats, that it was all public domain). Others buckled under the NFLPA's pressure (author's note: companies that were contacted for this piece refused to go on the record and asked not to have the name of their business used in fear of repercussions from the NFLPA).
Somewhere below us Joe McCarthy was smiling.
In November, the NFLPA began its own fantasy-based organization, the Fantasy Sports Association, open to licensees only. It promises to serve the fantasy industry the best it can and to take care of those that take care of the NFLPA. You can see where all of this is headed.
Somewhere along the way in all of this confusion two things got misplaced: the consumer and the small business owner. What about them? Does anyone care? For the consumer, all of this means that in a few years they will have to pay a premium to play fantasy football online. Sure, they can go back to the pen and paper leagues of yesterday, but it's not going to happen, and you and I know it. Technology-trained consumers are reluctant (and embarrassingly unable) to revert back to their old ways. When leagues cost $200 or $300, fantasy football will be less about friendly competition and more about the amount of money that's being played for.
For the businesses, the key word here is consolidation. All of those fantasy players that played the smaller, entrepreneurial sites -- hundreds of thousands of people -- will eventually be forced to find their way to the network sites whether they want to or not. And the small businesses will wither away one by one.
Once the secret got out -- not that there was fun to be had, but that there was money to be made -- the big boys stepped into the picture and started mopping up all of the business. Some industry insiders predict that soon the NFLPA will trim its list of licensees even more, asking for fees that only the ESPNs and CBS Sportslines of the world can afford.
Fantasy football began as a secret amongst friends; something for co-workers to talk about around the office water cooler. And it has never discriminated against age, race or gender -- my wife plays and several of my friends' parents play -- although, much like the NFL, its audience is dominated by young to middle-aged males.
But now the secret is out, and the childish fun is soon to go with it. Go figure.
Score this one: Bullies 1, Geeks 0