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VIDEORecession But a Dream for Fantasy Sports
Tightly knit industry still growing by leaps and bounds.
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Last summer, 29.9 million people aged 12 and above actively played fantasy sports in Canada and the United States, according to the Fantasy Sports Trade Association. While $800 million was directly spent on fantasy-sports products, the total market was valued at $4.48 billion, a figure inflated by the inclusion of services like DirectTV’s (DTV) NFL Sunday Ticket, a product not exclusive to fantasy football aficionados.
In such a huge, growing industry, the recent announcement of a fantasy fishing league would normally signify a plateau. But the fantasy fishing challenge at the 2009 Bassmaster Classic comes courtesy of Disney’s (DIS) ESPN, one of the roughly 10 companies dominating the fantasy landscape alongside players like Viacom’s (VIA) CBS Sportsline, Yahoo Sports (YHOO), and Fox Sports (NWS). Dominant as these sites and their fantasy fishing leagues may be, their sprawling industry is looking to move beyond the conventional fantasy format.
“Fantasy is a huge market that we absolutely want to tap into, but I don’t think fantasy is ideal,” says E-Global Sports Network CEO Michael Sroka. “The operators take 50% of the market and the winner takes the rest. So either you win or you lose.”
The former Dallas hedge funder’s answer to that is OneSeason.com, a new approach to fantasy in which users buy and trade shares in their favorite athletes in a user-driven free market. Users can even launch IPOs (Initial Player Offerings) for specific athletes.
Since launching in October, One Season has seen tens of thousands of users make 5,000-10,000 trades in a typical day. The site even features a running ticker showing each player’s value, a figure influenced by off-field incidents (New York Yankee Alex Rodriguez’s value dropped when he revealed prior steroid use) as much as player performance.
A trader’s approach to fantasy sports is hardly surprising. The Wall Street Journal recently profiled a million-dollar fantasy league featuring Wall Street titans like Paul Tudor Jones and Stanley Druckenmiller.
While the interest among finance types has always been there, Uncle Sam is now looking to get involved. This past summer, the Montana State Lottery introduced its own fantasy football game, which sold tickets through state-licensed businesses like bars and taverns.
In Maryland, 1 of 6 states (including Montana, oddly enough) where residents cannot collect prizes in online fantasy leagues, local delegates are looking to remove fantasy sports from the state’s anti-gambling legislation.
With industry expansion and government involvement, fantasy figure skating can’t be far off.
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