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Fantasy Football Big Business as Revenue and Engagement Grow

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Fantasy Football has become more than just a hobby, Fantasy Football is big business. While the NFL season is still a week away, an estimated 40 million Americans will be drafting their fantasy football teams this year. Participation in Fantasy Football has more than doubled over the last decade. The Fantasy Sports Trade Association (FSTA) estimates that $1.67 billion will be spent on fantasy sports this year. How can investors benefit from this explosive growth?

Yahoo (YHOO) has established itself as the biggest player in the ever-growing market. Market research firm IBIS World reports Yahoo now controls 18% of the market, with ESPN (DIS) and CBS Sports (CBS) trailing with 13% and 7% respectively. Each provider offers a free service with a wide range of paid upgrades. But the biggest piece of Fantasy Football revenue comes from ad revenue. The FSTA estimates players spend an average of 8.7 hours a week consuming fantasy related news each week with 45% checking multiple sites. NBC's (CMCSA) Rotoword received 4.3 million unique monthly visitors.

While the demographics of fantasy sports are expanding each year, the audience is 80% male, white, and affluent. The structure of the league brings users back to the site repeatedly over an 18 year period. Advertisers are guaranteed multiple weekly touchers with the messaging. In other words, Fantasy Football is an marketer's dream.

Broadcasters, advertisers, and the sports leagues have gone out of their way to encourage fans to join leagues. Market research by FSTA and IBIS World have found that people who are in fantasy sports leagues consume nearly 18 hours of live sports programming each week. This second screen interaction is seen as the holy grail for broadcasters.

This fall, DirectTV (DTV) is launching Fantasy Zone as part of their NFL Sunday Ticket programming package. Fantasy Zone will provide fans with up to the minute stats and on-screen tickers that offer projections and key player updates. DirecTV hopes to tap into the popularity of its popular Red Zone channel.

ESPN and Fox Sports 1 (FOX) have both expanded their on-air programming. Fox Sports 1 launched Fantasy Football Uncensored hosted by Jay Glazer and David Spade. The program drew 169,000 viewers for its first episode. ESPN2's established Fantasy Football show, Fantasy Football Now, drew 111,000 viewers.

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