February 9th, 2010

Business Profile: Ultimate Fantasy Sports

Tuesday, February 9th, 2010

Company: Ultimate Fantasy Sports
Launch date: 1986

Ultimate Fantasy Sports is a testament to fantasy players who value the experience over just the financial reward.

Sure, it’s always nice to win money for doing something — particularly a hobby in which you enjoy participating no matter the stakes — and cash prizes go out to top-performing UFS players. The $550 awaiting each baseball league champion, however, is clearly not what keeps 90 percent of the players coming back.

“It’s never been totally about the prizes,” founder John Zaleski told FSB.com. “It’s more about the community. These guys just have a passion for playing in lifetime leagues.”

Zaleski — who started UFS back in 1986, when the primary source of player stats still came in 50-cent packages, some even with a rock-hard stick of gum — says he has always used the term “lifetime” rather than the more common “dynasty” for his leagues. He sees the difference as a symbol of his commitment to the consumer and each entrant’s commitment to his league.

Ultimate Fantasy Sports began enrolling teams in 1988, hosting leagues in baseball, football, basketball and hockey, and added the “lifetime” component in 1990. Owners of “lifetime” teams carry rosters over within the same leagues from year to year, engaging in rookie/prospect drafts each off-season.

“The lifetime leagues now, they’re awesome — just an awesome group of guys,” Zaleski said. “They love the lifetime teams. They love taking over bad teams, and they’ll work on them, build them up.”

“Bad” teams aren’t those judged to be lacking in any way. Those are just the roughly 10 percent of rosters that wind up without managers after each season. Zaleski puts all of those teams back on the open market via an auction system. Interested parties can pick up a team for less than the regular $200 annual entry fee, and Zaleski guarantees his customers that no new leagues will be formed until all open teams find new owners.

Such a promise is just a small example of the kind of focus on customers that has kept UFS rolling for more than 20 years.

“You just take care of people,” Zaleski said. “At the same time, I don’t put up with some of the BS that some of the guys bring in, and guys really respect that. Guys can try to take advantage of other people, and I just didn’t let it happen. Because of that, the service had a great backbone and it kind of thrived off of that. I didn’t realize it until about 10 years after it happened, because you’re just so busy trying to get through the day-to-day.”

Taking care of people has left Zaleski with a strong group of loyal players. UFS currently counts 50 baseball leagues, 45 for football and five in hockey. Basketball has been out of the mix for a few years now, after interest waned following the 1998-99 NBA lockout.

“The interest just died,” Zaleski said. “I did everything possible to keep it going, but we just couldn’t. There were just too many open teams.”

In the beginning — that ultra-labor-intensive, pre-Internet fantasy age — running all of the UFS leagues took a series of phone calls to an answering service that allowed owners to submit lineups and transactions and listen to reports on team results and player moves.

Zaleski said the introduction of the Web gave him his life back, but he still reviews every trade in every league, rejecting those that he deems unfair. That happens much less often at this stage, though, as the explosion of information availability has completely changed the landscape.

“The knowledge base is 1,000 times better than it was when we started in 1988,” Zaleski said.

Although several factors have kept UFS from growing its user base beyond current levels, today’s fantasy climate has Zaleski exploring potential expansion.

“There are a lot of companies that aren’t doing a lifetime business, and they’re afraid of it because of the turnover. But they’ve never talked to me,” he said, referring back to his astonishingly strong annual renewal rate of about 90 percent. “You’re always having to beat the drum to get new people. I don’t have to beat that drum because of the way I’ve got it set up.”

Whether the right growth scenario presents itself, however, won’t impact Zaleski’s satisfaction with the business he launched more than 20 years ago — back when the Seahawks resided in the AFC, the Brewers in the American League and hockey teams in cold northern cities.

Ask him what his initial goals were for the company that has served as the primary source of income for his family since the early 1990s, and his answer is simple and unequivocal.

“The greatest thing I can say is that I’ve accomplished everything I set out to do.”

(Note: The format of this profile differs from our typical approach because info came from an in-person interview with John Zaleski.)


FSB Daily 2/9: SBJ, UEFA, Social Marketing

Tuesday, February 9th, 2010

A roundup of items recently posted on the FSB News page.

- The Sports Business Journal has planned for a March 1 release an “In Depth” report on fantasy sports. According to its announcement: “We’ll call upon our team of fantasy experts to find out which segments of the business are growing the fastest. We’ll introduce you to the key players in this space and outline some of the products that have gained the most traction with consumers.”

- European fantasy games site Sportsbox.com has added a salary-cap contest for the second half of the Champions League season. It’s interesting to note that Champions Fantasy Knock-Out is a pay-to-play game.

- We all know how important it is these days to get our marketing messages out there via social media. This week, eMarketer is running a series on how to do so properly.

- Many football fans may have forgotten about Anthony Gonzalez soon after he went down with a knee injury in Week 1, but fantasy owners who drafted the Colts wideout as a No. 2 receiver sure didn’t. CBSSports.com senior fantasy writer Jamey Eisenberg wrote a feature over the weekend on Gonzalez, who will be an interesting fantasy case heading into 2010.

- It’s just one guy’s opinion but still interesting to note that this staff writer for Connecticut’s New Britain Herald dubs MLB.com the best site on the Web. Let fantasy baseball season officially begin.

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