The Lucrative and Growing Fantasy Football Industry
Fantasy Football is back in full swing — and business has never been bigger.
Number of Fantasy Sports Players in US and Canada: 1988 500,000 1991-94 1-3 Million 2003 15.2 Million 2004 13.5 Million 2005 12.6 Million 2006 18 Million 2007 19.4 Million 2008 29.9 Million 2009 28.4 Million 2010 32 Million 2011 35.9 Million 2014 41.5 Million 2015 56.8 Million
That’s more than a 270% increase since 2003, 2 times the total of 2009, and includes a good percentage of North America.
Fantasy Sports Players as a Percentage of Population (Age 12+): US Canada Total 14% 19% Adults 13% 18% Teens 18% 30% Male 19% 20% Female 8% 5%
Let’s break down those fantasy demographics further:
Sex: 80% Male / 20% Female Ethnicity: 89% Caucasian Average Age: 34 College Degree or More: 78% Full-time employment: 66% Favorite Fantasy Sport: Football (73%) Average Time Spent Consuming Sports: 18 hours per week Average Time Spent Consuming Fantasy Sports: 9 hours per week Average Fantasy Sports Experience: 9.5 years Average Annual Household Income: $92,750
Of the 56.8 million players, more than 40 million play fantasy football.
That would be like if every single resident of the following 22 states played in a fantasy football league: Connecticut Iowa Mississippi Arkansas Utah Kansas Nevada New Mexico Nebraska West Virginia Idaho Hawaii Maine New Hampshire Rhode Island Montana Delaware South Dakota North Dakota Alaska District of Columbia Vermont Wyoming
Factor in that participants spend an average of $465 a year on fantasy sports, and do the math.
Fantasy football is an $18.6 billion market.
That’s $6 billion more than the current estimated NFL revenue, and 4.5 times the current value of the NFL’s top flight team, the Dallas Cowboys.
NFL Team: 2015 Value (In Billions):
Dallas Cowboys $4 New England Patriots $3.2 Washington Redskins $2.85 New York Giants $2.8 San Francisco 49ers $2.7 New York Jets $2.6 Houston Texans $2.5 Chicago Bears $2.45 Philadelphia Eagles $2.4 Green Bay Packers $1.95 Denver Broncos $1.94 Baltimore Ravens $1.93 Pittsburgh Steelers $1.9 Indianapolis Colts $1.88 Seattle Seahawks $1.87 Miami Dolphins $1.85 Atlanta Falcons $1.67 Minnesota Vikings $1.59 Carolina Panthers $1.56 Arizona Cardinals $1.54 Kansas City Chiefs $1.53 San Diego Chargers $1.53 New Orleans Saints $1.52 Tampa Bay Buccaneers $1.51 Cleveland Browns $1.5 Tennessee Titans $1.49 Jacksonville Jaguars $1.48 St Louis Rams $1.45 Cincinnati Bengals $1.45 Detroit Lions $1.44 Oakland Raiders $1.43 Buffalo Bills $1.4
In other words, fantasy football might be more valuable than the real thing.
Q: How did fantasy go from weekender hobby to big-time business?
A: 2 words – Daily Fantasy.
In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIEGA), which banned online poker – deemed a game of chance – but left room for fantasy sports wagers – deemed a game of skill.
Daily Fantasy Rules: 1) Submit entry fee 2) Select lineup under capped fantasy budget 3) Collect earnings from results 4) Rinse and repeat
DraftKings and FanDuel – the two largest daily fantasy services – will each pay out more than $2 billion in winnings this year.
That’s a big chunk of change.
But with entry fees – from $2 to more than $5,000 – generating $2.6 billion this year, bearish projections continue.
Bearish Revenue Estimates Per Year (In Billions): 2015: $2.6 2016: $3.66 2017: $5.16 2018: $7.29 2019: $10.27 2020: $14.4 … 2025: $77???
In comparison, online poker and casino projections only make up about 5% of fantasy projections.
Bearish Revenue Estimates Per Year (In Millions): 2015: $150 2016: $170 2017: $214 2018: $443 2019: $606 2020: $663
Sports books in Vegas are taking a hit, too.
NFL Week 1 Entry Fees: FanDuel/DraftKings: $60 million Las Vegas: $30 million
Investors Have Taken Notice
Total VC Raised : Investors:
DraftKings – $426 million : Fox Sports, Major League Baseball, the National Hockey League, Major League Soccer, Madison Square Garden Co., Legends Hospitality, Atlas Venture, DST Global, GGV Capital, the Kraft Group, the Raine Group, and Wellington Management Co.
FanDuel – $363 million : KKR & Co., Google Capital, Time Warner Investments, Turner Sports, the National Basketball Association, several NBA owners and NFL owners, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Bullpen Capital, Pentech Ventures, and Piton Capital
DraftKings and FanDuel are also among the top 5 spenders in TV ads [from 9/14-21/15].
Company Total Spent National Airings 1)Warner Bros. $18,277,265 3,303 2)DraftKings $17,818,044 2,571 3)GEICO $15,883,842 5,160 4)FanDuel $14,729,168 2,576 5)Verizon $14,286,524 1,234
Yes, those ads ARE on all the time.
So what are the odds you collect from that $2 billion pot?
Player Total Wins/Day Top 10 Players 883 Top 100 Players 330 Remaining 20,000 13
If you’re not a top fantasy player in the world, you’re probably not winning much.
The cut-off between winners and losers is vivid and steep.