June 8th, 2009

Pro-Fantasy Rulings Hurt NFLPA’s Bottom Line

Monday, June 8th, 2009

We all know that court decisions in favor of fantasy game providers tired of paying licensing fees for player statistics and information are good for those who put on the games. The flipside, though, is that NFL Players Inc. is out at least $3.5 million so far, according to a recent report.

Sports Business Journal reported Monday that the NFL Players Association’s annual report for the fiscal year ending Feb. 28 found revenues from fantasy licensing fees down to $1.2 million from $4.7 million in the previous year. That number figures to tumble even further going forward — particularly once the Yahoo! lawsuit is resolved.

According to SBJ, Yahoo! accounted for more than half of last year’s total, shelling out $841,329 in licensing fees to the NFLPA. CBS Sports, on the other hand, dropped from $1.49 million in the previous fiscal year to just $55,000 for “player appearances” last year. CBS reportedly stopped paying licensing fees before filing suit last fall against the players association.

Among the other big names: Fox Sports’ payout dipped just to $276,218 from $363,876, with most of the remaining money reportedly going to cover LaDainian Tomlinson’s role as spokesperson for Fox’s fantasy football. Sporting News, which said it did pay for a license last year, nevertheless dropped from $73,805 in fee spending to $50,000. Sporting News Online vice president and general manager Jeff Gerttula said he didn’t know what the company would do “going forward,” in light of the series of court rulings that deem such licenses unnecessary.

According to SBJ, the exact size of the revenue drop for NFL Players — the merchandising wing of the NFLPA — is unknown because some companies pay similar fees as part of larger licensing deals that also cover other areas.


Business Profile: Fantasy Sports Ventures

Monday, June 8th, 2009

Company: Fantasy Sports Ventures Inc.
Launch date: 2006

Since debuting less than three years ago, Fantasy Sports Ventures and its Fantasy Players Network have experienced tremendous growth, now ranking near the likes of ESPN.com and Yahoo! in terms of monthly unique Web visitors. FSV executive vice president and general manager Clay Walker took some time to tell FSB.com about how the company has gotten off to such a quick start.

1. With many companies in the fantasy industry, it’s obvious what they offer, be it content, league management services, a specific product, etc. Can you please describe just what services Fantasy Sports Ventures provides?
FSV provides marketing and promotional resources to its partners in exchange for a revenue share on the ad dollars we generate for them. Essentially, the sites are getting a dedicated and experienced online sales staff to represent them for free. We also promote our sites through the Fantasy Players Network at www.fantasyplayers.com and we frequently provide partner content to USA Today through the strategic relationship we have with Gannett. Finally, we provide our partners with a free photo license from ICON Sports Media.

2. What was the impetus for the company’s creation and what went into the launch (i.e. capital, tech development, self-promotion, etc.)?
Chris Russo spent 6 years at the NFL and he quickly observed that, while there were half a dozen big media companies involved in fantasy, there were also hundreds of smaller sites involved in fantasy. Collectively, he believed that the audience of these smaller sites could equal or surpass the audiences of major media companies if we all worked together. Having been involved with fantasy football since I started at the NFL Players Association in 1993, it was easy for me to grasp and endorse the concept. In terms of capital, we are privately funded by friends and family and USA Today/Gannett.

3. Four members of the executive board have prior experience working for or with the NFL. What part has that experience played in building a company in an industry led by football?
We have great executive experience across the board, led by Chris Russo — who ran the NFL New Media business for more than six years. Evan Kramer was also at the NFL for a long time, and I spent 13 years at the NFL Players Association, so it’s hard to run away from our football backgrounds. However, we also have executive staffers from Yahoo! Sports, ABC and CBS Sports — so we have a well-rounded group leading the company. I believe that type of management experience is unique in this industry.

4. You helped found the Fantasy Sports Association in the same year in which FSV launched. What role has that tie played in your company’s development and integration into the industry?
I founded the Fantasy Sports Association as a way to provide the larger media companies with a platform to promote fantasy sports to brand marketers. It’s a nice complement to the FSTA, which does a great job of representing the independent fantasy sports voices in the industry. FSV obviously works with both associations and many of our partners are members of the FSTA.

5. What kind of connections within the fantasy industry did FSV carry into its launch? How has the company gone about building further relationships?
Collectively, our management staff was fortunate enough to be able to develop a number of great business partnerships while we worked for the NFL, NFLPA, Yahoo!, CBS, ABC, etc., that gave us a head start when we first launched FSV. It’s an extremely competitive marketplace and advertising dollars have become more scarce in the current economy, so every edge we have is a plus for us.

6. What is the Fantasy Players Network? What does it mean for a site to be a part of it, and how have you gone about building it?
The Fantasy Players Network is a collection of the best independent fantasy sports games, tools, content and community around the web. We are working on delivering the best and most comprehensive fantasy experience for fans. At the same time, we’re packaging that very attractive audience for brand marketers and building custom marketing opportunities that few, if any, can match.

7. What were some of the first sites you targeted as potential business partners, and were there any particular deals that served as benchmarks for FSV’s early progress?
There are so many great sites in the network that it’s difficult to call out one particular content site, game site, etc. To us, they are all valuable because each site provides something unique and different and that’s what makes the network so special — that you can’t find all of the things we have in the network anywhere else.

The two easiest benchmarks are scale and revenue. When we started at the end of 2006, we didn’t have an audience. By the end of 2007, our audience was approximately 5 million unique visitors per month (according to Nielsen and comScore). By the end of 2008, our audience had grown to 11.5 million unique visitors per month. It’s possible that our audience may reach 15 million unique visitors per month by the end of 2009. Currently, the Network is the fifth-largest online sports property in the U.S., exceeding the size of SI.com, NBA.com, NASCAR, AOL and many others with larger brand name recognition. The second measure is revenue. We doubled our revenue from 2007 to 2008 and we may have a similar gain in 2009.

Last, FSV was named one of the five best Digital Sports Media companies in 2009 by the Sports Business Journal. Though ESPN ultimately won the award in NYC last week, it was an honor to be considered in the same company as ESPN and Yahoo! Sports.

8. You have experienced tremendous growth in online traffic over the past year. How has FSV gone about making that happen, and how important is that to the company’s success?
Like many other sites in the industry, we’ve focused on SEO (search engine optimization). We’ve also worked with USA Today to increase our distribution and the distribution of the content around the network. Moving forward, we will focus more on linking and integrating the sites in the network so the traffic travels back and forth between the partners more easily. Additionally, we continue to add new sites to the network, and that also increases network traffic.

9. What kind of backgrounds and involvement do you guys have as fantasy players?
A number of our staff members have been longtime fantasy players, myself included. My claim to fame is that I was one of the founding members of the TFL (Tidewater Football League) in 1988. I played in that league for seven seasons, until I was asked to leave by the other owners in the league because I won the league three years in a row. There was a belief that my job at the NFLPA provided me with an unfair advantage!

10. What should we expect to see from Fantasy Sports Ventures going forward?
More growth in the size of our audience and in revenue in 2009 and 2010. You may also see a redesign of www.fantasyplayers.com in 2010.