While the casual fan may think that all this “fantasy” stuff is new from a business perspective, in reality the roots of fantasy are a few decades old, and there are few who understand the history, the success, and the failures of the business better than Rick Wolf. A Fantasy Sports Trade Association Hall of Famer, Wolf has been at the front edge of many of the biggest growth opportunities in fantasy for years, and now runs a consultancy, Full Moon Sports, dedicated to helping nurture and grow businesses in the fast moving space. He is also the president of Fantasy Alarm, one of the rising brands in the space.
Wolf has also authored a three part series on how to get into the business as part of his Fantasy Alarm work.
Getting started as a writer/entrepreneur
Creating Partnerships in Fantasy Sports
Need to do more than just build it. Need to care about and have the tenacity to stay with it.
We caught up with Wolf to get a history lesson and a look forward into what is going on in the business.
Q: When you look at potential consulting clients, how do you determine what can work and what can’t?
A: When I look for projects to work on, I look for two things: (1) Does this project advance the fantasy sports agenda? That is will it raise the awareness of fantasy sports or will it introduce a new area of fantasy sports that will increase the number of players. (2) How helpful can I be to what they are trying to accomplish?
Q: Where is the biggest growth area in fantasy right now for a startup?
A: Right now, there are a lot of “me too” start-ups in fantasy sports. Quite frankly that is great. The smartest people start-up things that will generate some revenue while they find their niche. The biggest revenue growth area is still in Daily Fantasy Sports as it has only scratched the surface. The biggest pure penetration growth for increasing the number of players is still in the “second-screen” area. Single-game free fantasy sports will be bigger than anything we have ever seen as far as participation goes.
Q: With all the growth that has occurred in the fantasy sports business in the past two years, what is the one aspect of the business that has surprised you the most?
A: Honestly, it has surprised me that new companies will label things that are clearly gambling as fantasy sports or that daily fantasy companies have been unable to stay away from connecting themselves to gambling by using the words “bet”, “wager” and “gambling”. Fantasy sports is a game of skill like chess.
Q: The NFL just announced teams will be able to create partnerships with pay fantasy companies for a year and then the business will be reevaluated. How do you think they will determine success?
A: A hedge like this is very difficult to understand. Fantasy Sports is a cornerstone of the NFL. The NFL is a member of the FSTA. By placing a time limit on it, you don’t allow partners to long-term plan and INVEST in businesses with the NFL. The reality is that the all sports leagues have so much invested in the broadcasts that they should embrace fantasy sports as deeply as possible since it DRIVES VIEWERSHIP in every way imaginable.
Q: What sport has the most potential for growth in fantasy sports?
A: Globally, I think the NBA has the most impact right now and is growing in Europe and Asia.
Q: Many outside the US still consider the idea of fantasy sports to be an American phenomenon. Do you see the culture changing for the business abroad?
A: This is an American assumption. Fantasy sports is wildly popular in England, Australia, China and Japan amongst other places. In 2009, we tried to understand this and with IPSOS-Reid studied some international markets. In England 22% of adults played fantasy soccer or fantasy cricket. This is a lot bigger than the US.
Q: How does DraftKings announced partnerships with MLB and ESPN change the landscape of pay fantasy?
A: The arms race between Fanduel & Draft Kings has escalated beyond dollars and cents right now. It is great for the attention on Fantasy Sports. A deal like this always depends on the large partners showing up as partners. Almost exactly a year ago, I wrote this about partnerships in Fantasy Sports.
In this case it is especially poignant. I quoted the 1949 movie, The Fountainhead from the 1936 book by Ayn Rand: “In all proper relationships there is no sacrifice of anyone to anyone. An architect needs clients, but he does not subordinate his work to their wishes. They need him, but they do not order a house just to give him a commission. Men exchange their work by free, mutual consent to mutual advantage when their personal interests agree and they both desire the exchange. If they do not desire it, they are not forced to deal with each other. They seek further. This is the only possible form of relationship between equals. Anything else is a relation of slave to master, or victim to executioner.”
Time will tell if it is a true partnership.
Q: What was the biggest business mistake made in the fantasy sports space?
A: The world pays for executions and not ideas. People who come to me often tell me they have the next disruptive or revolutionary idea for the fantasy sports space. Fantasy sports players are slow to adopt new things, so even when things are “disruptive” or “revolutionary”, it takes years for them to penetrate. Look at daily fantasy sports for instance. Snapdraft was conceptualized in 2004 (I think), but was not legal until 2006. Instant Fantasy Sports existing illegally, but had very few customers. In 2006, when UEIGA made it possible to have daily fantasy sports, the fantasy sports player was happy. Fanduel and Draft Kings have advanced the number of players quickly by spending 10s of millions on marketing. Yet, they only have 8-10% of fantasy players trying this so far.
Q: Who are some of the business people you watch in the space?
A: This will sound odd, but I try to objectively watch everyone. Some of the best business ideas will come to me from people I have not met or fantasy sports players.
Q: What are the biggest changes, positive and negative, that you see in the fantasy sports business coming in the next year?
A: There is a minor crack in the business people on the seasonal side of fantasy sports attacking daily fantasy sports because of a small group of entrepreneurs who cannot stop connecting fantasy sports to gambling when the two couldn’t be farther apart.
It is critical that we do not allow that chink in the armor to expand regardless of how the egos play their cards. The seasonal content & service providers need to realize that daily fantasy sports created an opportunity to rejuvenate fantasy sports that they should embrace. The daily fantasy sports providers need to understand that they cannot simply do as they please with the use of gambling words, misleading promotions and should be thankful for what came before them that paved the way for the existence of this genre. Both groups should also realize that there will be something coming after them that will be more popular than both and they both should be hoping for it.
So this is both the biggest positive and biggest negative depending on which way the people involved go. Right now the most powerful leaders on each side are handling this perfectly. It is the smaller companies and providers that are jockeying for position that are hurting themselves and a $2B industry.
From my vantage point, I see my life’s work in jeopardy when people do not respect each other enough to play by the rules and believe that both old and new NEED to help each other.
Lincoln said: “A house divided against itself can never stand.”
Rick Wolf is a leader in the fantasy sports industry. He is a founding Board Member and one of only fifteen FSTA Hall of Famers including Bill James, Ron Shandler, Glenn Colton and Matthew Berry. He is the Co-Host of Colton & The Wolfman every week on Sirius XM Fantasy Sports Radio. With college friend, Glenn Colton, he has won five Expert baseball titles and four Expert football titles. He currently runs the sports consultancy Full Moon Sports, which has assisted many sports companies including Topps, USA Today and FOX.
As a leader in the Fantasy Sports world, Wolf began advising a small fantasy sports company in Somers, NY called Allstar Stats. Recognizing the potential, Wolf brought design, development, marketing, sales, business strategies and guidance that led Allstar to the 2006 purchase by NBC Universal. At that point, Wolf closed Full Moon and for 5 years to help NBC Sports and Olympics on expanding their digital presence.
Full Moon now looks to provide SOLUTIONS to sports businesses including high-level strategy, marketing, sales, business development and product design/development. Full Moon is currently partnered with great companies like Fantasy Alarm, Sports Data LLC, InGamer Sports, Direct2Millions and The Fantasy 100.
