By the Staff of NYSportsJournalism.com
December 17, 2014: Some 40 million people in the U.S. and Canada — approximately one in eight adults and one in five males — play fantasy sports, the driving force behind what has become a $15 billion industry, according to the Fantasy Sports Trade Assn., Chicago.
Although fantasy sports traces its roots back to the 1950s and 1960s, the big boom this year has come via companies touting daily fantasy sports platforms. Among them: DraftKings, FantasyDraft, FanDuel, DailyMVP, Draftser and FantasyAces.
The one-day/daily fantasy sports category accounts for upward of three million players, according to industry analysts. FanDuel, based in New York, which said it pays out more than $10 million (and rising) per week, said it should have more than one million active users by year's end, about four times the number in 2013. Rival DraftKings also claims to have hit the million-user mark.
DFS has the potential to grow at a rate that over the next few years could be equal to or greater than the three million new participants the overall fantasy sports category has experienced annually during the past decade, according to industry analysts.
Among others, the NFL and NFL Players Assn., MLB, NBA and NHL have officially aligned with DFS companies; as have teams including the New England Patriots, Washington Redskins, Denver Nuggets, Houston Rockets, Boston Celtics and Philadelphia 76ers; and such current and former athletes and coaches as Tom Brady, Drew Brees, Clayton Kershaw, Kevin Love, Steve Nash, Jimmy Johnson, Terrell Owens, Boomer Exiason and Shannon Sharpe.
“Daily games and contests are truly the next frontier for fantasy sports, and the Broncos are proud to align ourselves with DraftKings,” Derek Thomas, Director of Corporate Partnerships for the Denver Broncos, said when the alliance was unveiled in November “Our partnership is an exciting way to provide our fans with another touchpoint for engaging with the sport and team they’re so passionate about.”
DraftKings, which has a top prize of $1 million per week, recently raised $41 million in funding, according to industry analysts. DraftKings’ plan to award more than $100 million in collective prizes this NFL season.
These alliances have come with significant national, local and social media-driven marketing campaigns. For example, as part of its agreement with the Broncos, DraftKings is featured on TV and radio, on team digital media and Internet destinations and in-stadium. In addition, DraftKings has access to "unique opportunities for fans, including tickets to games, VIP events and autographed memorabilia."
In December, Scott Hanson won FanDuel’s flagship event, the World Fantasy Football Championship in Las Vegas, beating out 99 other competitors from around the country to take home the $2 million first prize, with FanDuel paying out a total of "$7 million dollars in the one-day tournament to the 100 competitors."
There also is big money supporting FanDuel, which said it has has raised $88 million in funding to date from investors including Shamrock Capital, NBC Sports Ventures, KKR, Comcast Ventures, Pentech Ventures, Piton Capital and Bullpen Capital.
When its deal with the Washington Redskins was unveiled in November, Mitch Gershman, Redskins CMO, said, “Collaborating with FanDuel will offer yet another fan experience enhancement at FedExField.”
FanDuel's deal with the NBA gives the league an equity stake in the company. According to Mark Tatum, NBA Deputy Commissioner, "Our new one-day fantasy game with FanDuel provides our fans with another way to connect with their favorite teams and players throughout the season."
Among the others, DailyMVP is building its reach through parent company TopLine Game Labs, which said it was founded by a "group of technology MVPs" from such companies as Yahoo!, Apple, DreamWorks Animation, Electronic Arts and Salesforce. TopLine's CEO and Founder, David Geller, spent six years as the head of Yahoo's fantasy sports division. Both Brady and Nash have done "Have an MVP Day" TV spots for the platform.
FantasyDraft is working with sports management and marketing firm Excel Sports Management to get its message out.
The NBA and some other leagues and teams do not view this as gambling. Others do, which makes NBA commissioner Adam Silver's recent comments in a recent New York Times article that sports betting should be legalized all the more intriguing,
“Fantasy dailies are a natural evolution of fantasy sports” said Paul Charchian, president of FSTA, told CNBC in a recent interview. "The daily sites are in customer acquisition mode where they realize there is a tremendous untapped audience. They are scrambling to generate as many loyal players as they can."
With new deals still to come, here is an in-progress list of alliances to date:
DraftKings (Boston) Launched 2012; Jason Robins CEO, Paul Liberman CMO
NHL (and seven teams), MLB (and eight teams), Denver Broncos, New England Patriots, Boston Celtics, Philadelphia 76ers, Houston Rockets
FanDuel (New York) Launched 2009; Nigel Eccles CEO
NBA, Washington Redskins, Brooklyn Nets, Chicago Bulls, Dallas Mavericks, New York Knicks, Los Angeles Lakers, Orlando Magic, English Premier League
FantasyDraft (Charlotte, NC) Launched 2014; Grant Yoder CEO
Clayton Kershaw, Drew Brees, Kevin Love, Jimmy Johnson, Boomer Exiason, Shannon Sharpe, London Fletcher, T.Y. Hilton, Jordy Nelson
DailyMVP TopLine Game Labs (Los Angeles) Launched 2014; David Geller, CEO of TopLine Game Labs
Tom Brady, Steve Nash, NFL Players Assn.
Draftser (Santa Monica, Calif) Launched 2014; David Peterson CEO
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