Chatalas Shrugged

Sports play a large role in American society. Millions of US citizens participate in sports activities, and even more watch and attend sports events; the 2003 Super Bowl attracted 137 million television viewers. Similarly, the business of sports is significant as well, generating up to $30 billion in revenue per year (Sports in America, 2003).

The same now holds true for fantasy sports, which have 15 million yearly participants and a $2 billion annual economic impact (FSTA, 2007). In fantasy sports leagues, fantasy owners build and manage teams of professional players and compete against other team owners based on the statistics generated upon the actual field of play.

This paper will trace the origins of fantasy sports to its emergence as the new American pastime. It will follow this hobby from the 1960s through the 1990s, including the first fantasy leagues, the early fantasy sports industry, and the role of the Internet in propelling the growth of fantasy sports participation and business. The paper will look at the enthusiasm for fantasy sports, incorporating uses and gratification theory and comparisons to gambling. And it will also examine the increase in popularity of fantasy sports in the context of Rogers’ diffusion of innovation theory.

What are Fantasy Sports?
Fantasy sports participants play the role of owner and general manager of a virtual sports franchise. They compete in fantasy leagues of varying size; typical leagues range from eight to 16 teams. Leagues have a draft each year, in which franchise owners select their players for the coming sports season. During the season, teams gain points based on the performance of players and the statistics they generate during the games (Walker, 2006). As an example, one team in a league “owns” Seattle Mariner outfielder Ichiro Suzuki; every time he steals a base or hits a homerun, those statistics accrue for the team that owns him. Leagues are different, using various competition formats (full-season compilation or weekly head -to-head) and statistical categories. At the conclusion of the season, the team atop the standings is the champion, and the top finishers are awarded prizes (including cash in many cases).

While fantasy football and baseball are the most popular games (and will also be the prime focus of this paper), there are also fantasy sports leagues for basketball, hockey, golf, soccer, auto racing, and more. Each fantasy sports league, though, has common elements and processes. A commissioner manages and coordinates each league, including resolving disputes as they arise. Franchise owners pick the players that will make up their teams at the league draft (or auction); this has traditionally been an in-person gathering of the league participants, although purely online drafts are becoming more common. Team names are chosen by each owner, making it like a real sports league; these often creative names are listed in the standings on the league’s website. Free agent pickups and trades are part of the game, with owners claiming un-owned players (in-turn, dropping underperforming players) or trading with other teams a la professional sports. Of course, statistics are at the heart of the game, and points are assigned based on the particular statistics each league establishes as its scoring system. And traditions are also a part of fantasy sports, leading to league longevity and community.

Many leagues try to take emulation of professional sports farther. Some leagues have holdovers, players they can keep on their teams in subsequent years. Some have salary caps and contracts. Other leagues enable franchises to have a stable of players that sit on fantasy benches until ready for use at a future time, including minor league and college players,

Fantasy Sports Evolution and Growth
Sports Fans and Statistics
The predecessors to fantasy sports were tabletop sports games that simulated player and team performance from a previous season’s statistics. Games such as Strat-O-Matic, APBA and Statis Pro combined sports strategy, statistics and chance; those playing sat around a board on a table, and made strategic and personnel decisions as if they were managing a sports team. In these games, professional athletes are represented by cards with numbers, ratings and results based on statistics the player accumulated in a prior year. With the roll of dice (or flip of special cards, or spin of a spinner), a particular play takes place via cross-referencing the player cards.

The player cards are the heartbeat of these tabletop simulation games. The goal of the game and cards was to replicate a player’s abilities as closely as possible. Those who have played over the years say that a player’s performance in the board game ends up being similar to his actual statistics (Manley, 2006).

These simulation games were greatly popular, and included in the ranks of players were future baseball managers, announcers, and general managers, including NY Yankee manager Joe Torre and ESPN broadcaster Jon Miller (Brock, 2006).

Alan Schwarz’s book The Numbers Game, Baseball’s Lifelong Fascination with Statistics, says that half of the current major league baseball general managers played Strat-O-Matic baseball in their youth, and they recall the game enthusiastically.

“That’s how they learned how to apply the mathematics of risk-taking. Speed, stolen bases. You knew what the chances were. And you could apply this to the bunt, or steal, or playing the infield in. Before Strat-O-Matic came out, nobody knew. (Baseball teams’) front offices are now embracing people who didn’t play on the field. If you didn’t play on the field, you probably played Strat-O-Matic.” (Schwarz, 2005).

To this day, Strat-O-Matic is still played by many who played in their youth, although it’s not as common amid the rise and sophistication of electronic sports games (Manley, 2006). Some play Strat-O-Matic online, and The Sporting News is currently sponsoring the re-creation of the 1986 season. Statis Pro Baseball, on the other hand, quit making player cards in 1992 after a licensing issue between Avalon Hill and Major League Baseball; the royalties professional baseball required became too expensive to continue making the cards (Tabletop Baseball Games, 2007). Similar licensing disputes have also reared their heads in fantasy sports and will be discussed in a following paper.

While these tabletop simulation games made the participants managers, fantasy sports made them owners. Instead of playing a game based on statistics that had already occurred, fantasy sports’ niche was to speculate what may occur. Such prognostication is common to sports gambling, which is an element of fantasy sports popularity (Bernhard & Eade, 2005).

The first fantasy sports leagues were fantasy football and baseball. In both cases, their creators didn’t realize their ideas would become a national phenomenon. The initial football league began in 1963. According to NFLPlayers.com (2007), The Greater Oakland Professional Pigskin Prognosticators League had eight teams, including Oakland Tribune sports writers and employees of the Oakland Raiders football team. Points were gained for touchdowns and yardage. In 1968, GOPPPL member Andy Mousalimas opened the Kings X Sports Bar in Oakland. There he sponsored and ran leagues, introducing more people to the game; by 1974 the bar had over 200 participants. During the decade, leagues gradually spread throughout the country (Dickey, 2004).

One such league was the Hard Fart Football League (HFFL) at the Timeout Tavern in Aberdeen, Washington. Aberdeen native Jeff Bogdanovich (interview, November 20, 2007) learned of the game during the summer of 1979, and was immediately interested; he had been a Strat-O-Matic player since age 12. He subsequently introduced fantasy football to his University of Washington fraternity brothers in the fall. Word of the Lambda Football League (now in its 29th season) circulated around the fraternity system, and Bogdanovich showed others the basics of how to start a league.

Fantasy baseball had its founding in the 1960s as well. A Harvard professor, William Gamson, began what he called “Baseball Seminar” in the early 1960s. Gamson was familiar with the tabletop baseball games, but he felt that since they were based on previous season statistics the games lacked the excitement and immediacy of a season in progress (Walker, 2006). So Gamson and others would form rosters that earned points based on actual baseball performance. Gamson continued playing after moving to the University of Michigan, and the game grew more popular and competitive with 25 teams on campus. One of the players was an assistant professor named Bob Sklar, who mentioned the game to one of his students he knew to be a baseball fan. That student, Daniel Okrent, wasn’t interested in the game at the time, but eventually he would become the driving force behind fantasy baseball popularity (Walker).

In 1981 the article “The Year George Foster Wasn’t Worth $36” appeared in Inside Sports magazine; this article, by Okrent, documented his league’s first season of fantasy baseball in 1980, and included rules to the game. The fun writing style and general idea captivated baseball fans, and many readers were motivated to start their own leagues. Okrent called the game Rotisserie League Baseball, named after the restaurant that hosted the first draft; rotisserie baseball is, to this day, the technical name for the most common format of fantasy baseball.

Okrent was a member of the media, as were several of his league-mates. As a result, the conversation and writings among media members helped spread the word about fantasy baseball. ESPN did a report on the game, and participants who played in the 1980s included baseball broadcasters Bryant Gumbel and Bob Costas, and Boston baseball writer Peter Gammons.

Since statistics were at the core of fantasy sports, some fantasy baseball players became tuned into the work of Bill James, a historian, author and statistician. The Bill James Baseball Abstract used statistics to rate players and predict future performance, and spawned the industry of baseball statistical analysis called sabermetrics; fantasy players read the Abstract to get an edge in their leagues. James was a traditionalist baseball fan, and thus rarely dignified fantasy baseball in his writings. Still, James acknowledged that fantasy baseball played a large part in making his books popular in players’ quest for information that might lead to winning teams (Lewis, 2003).

Early Fantasy Sports Industry
Throughout the 1980s, fantasy sports participation increased; a1988 USA Today article about fantasy baseball estimated five hundred thousand playing that game (Walker). This growing popularity spurred a new industry of statistical services and publications that provided fantasy analysis and team management strategies.

Coordinating fantasy sports in its early days was time-consuming. League commissioners would save box scores from the newspapers and tally points. Football required less time (a major factor in its place as the most popular fantasy sport) than baseball and its 162-game schedule, but it still required transferring game day statistics into fantasy points. Statistical services saw a niche, and appealed to fantasy players to pay for the service. Stat services set up databases that monitored player performance, and which then extracted and filtered the statistics into the specific leagues that hired them. They disseminated the information via the mail, then by fax, and, of course, later via the Internet.

In 1984, Okrent published a fantasy baseball book, with rules and strategies, and countless publications followed suit for the sports of baseball, football and basketball, helping to accelerate the fantasy publishing market. In the vein of this statistical analysis were several sabermetric devotees who created their own books and services, and even later became consultants to major league baseball teams (Walker). Included among these ranks is Ron Shandler, who published a baseball statistics book in the mid-‘80s, and currently runs a statistic-heavy fantasy baseball website, BaseballHQ.com; this subscriber-based site charges nearly $100 per year for access to its information.

Among the early fantasy publications was Fantasy Football magazine (now Fantasy Football Index), which hit the newsstands in 1987. Published in Seattle by two University of Washington graduates, it was the first fantasy magazine dedicated to football. While playing the game with friends in college, founders Ian Allen and Bruce Taylor realized that none of the football magazines covered, let alone mentioned, fantasy football. Taylor subsequently completed a class project that identified the opportunity and costs of such a publication, which convinced the partners it was viable. The 1987 issue had a print run of 20,000 and no advertising. Taylor says that when he started the magazine he knew fantasy sports would be big, but he had no idea how popular it would become. Twenty years after that first issue, the print version of Fantasy Football Index has a circulation of 220,000 and advertising sales that Taylor says are the strongest of the magazines in the market based on ad pages sold (B. Taylor, interview, November 18, 2007).

Many other publications have since adorned newsstands nationwide, seeking to quench fantasy hobbyists’ thirst for information, and, of course, to make money in the typical print manner via advertising and single copy sales. And established media entities such as The Sporting News and USA Today came out with publications dedicated to fantasy sports and related content.

The Internet Takes Fantasy Sports Big-Time
At the end of the 1980s fantasy sports had become a growing hobby played by sports fans, but it was the Internet that helped take it to another level. By the mid-1990s, the growth of fantasy sports was accelerating alongside the emergence of the Internet. Online technology made tracking statistics and league standings much easier, and information more accessible. The Internet also allowed fantasy players to communicate with each other via e-mail and league message boards, creating early online communities (Chaffin, 2007).

Running leagues and tracking statistics online became one of the first on-line fantasy business models. Commissioner.com began in 1997 and featured updated scores, real-time statistics and message boards. The company charged fantasy leagues $300 for a season’s service. A year later commissioner.com was sold for over $30 million to Sportsline (Walker), which later was bought by CBS. Other major websites like ESPN, Yahoo!, and AOL followed suit in offering fantasy sports games and services.

Taking a cue from fantasy sports magazines, some companies created websites that provided relevant fantasy content to help players. Among the most successful early models was RotoNews, which published information gleaned from various sports sources, and added fantasy analysis, recommendations and links. Others, including RotoWorld and Fanball, imitated the general approach. RotoNews (now RotoWire) opened in 1997, and within two years was one of the most popular sports sites on the web (RotoWire, 2007). Like ESPN, Yahoo!, and others, these websites offered a combination of free and paid content, augmented with advertising.

The proliferation of businesses and media options related to fantasy sports in turn led to even more growth of the overall industry. In 1998 the Fantasy Sports Trade Association (FSTA) was founded to represent the interests of the fantasy sports industry. With 125 businesses as members, the group has awards, newsletters, and a yearly market survey, and follows legislation and lawsuits that may affect fantasy sports (FSTA, 2007).

Ironically, fantasy sports growing reliance on the Internet also at times led to chaos amid technical mishaps. In 1992, Prodigy’s fantasy baseball service broke down, and hundreds of players swarmed the system’s bulletin board with rants of frustration (Hiltner & Walker, 1996).

At the turn of the century, fantasy sports participation was still growing. By the mid-1990s, fantasy baseball alone claimed over 3 million players (Walker); in 2000 fantasy football had cemented its status as the most popular sport by a 2 to 1 ratio over baseball (Raney & Bryant, 2006). A 1999 Harris interactive poll showed millions of people playing fantasy sports, 85 percent using the Internet, and fantasy sports generating over $100 million in revenues (Raney & Bryant).

What Explains the Enthusiasm for Fantasy Sports?
A 2000 study conducted at Indiana University’s Sports and Entertainment Academy provided some insight into the mindset of fantasy sports players. Ninety percent of participants cited friendship as a reason for playing, making it the primary reason; the second most important reason was fun, cited by 60 percent, followed by the competition and challenge, while the lure of prizes wasn’t shown to offer much incentive (Raney & Bryant). And the mostly male (90 percent) participants spent between one and four hours each week on fantasy sports.

Aspects of uses and gratifications theory may help us to better understand the motivations of those who embraced and played fantasy sports in the first two decades. Uses and gratifications theory contends that our media consumption isn’t entirely passive, and that we make conscious choices regarding our sources of information. Blumler and Katz’s model for the theory embraces four general types of gratifications emanating from media usage: escapism, social interaction, personal identity and surveillance. Stafford, Stafford and Schkade’s “Determining Uses and Gratifications for the Internet” finds three primary gratifications, which fall into the categories above: content (surveillance and finding information), process (escapism/entertainment in the use of the Internet), and social (social interaction) (Stafford, Stafford & Schkade, 2004).

While the game of fantasy sports is not media per se, the Internet and other media are now thoroughly ingrained in the culture of fantasy sports, and uses and gratifications theory is applicable. The four categories of gratifications are prevalent in the early years of fantasy sports. The founders created the games for social interaction with friends, and leagues began for the same reasons. Beyond the opportunity to play a game with friends was the pure entertainment factor of the game and the excitement of trying to win. Surveillance is shown in the manner in which fantasy sports players followed their teams, culling through statistics and searching for information. And fantasy teams became part of a fantasy sports hobbyist’s self-identity as they take pride in (or suffer embarrassment from) their teams’ performance.

In personal interviews with several fantasy hobbyists, the reasons given for playing fantasy sports clearly align with the uses and gratifications model. A subsequent paper focusing on the present and future of fantasy sports will include portions of these interviews, as well as research that also relates to uses and gratifications theory and fantasy sports participation.

Fantasy Sports as Gambling
Gambling as an industry is popular throughout our society. A 2002 survey on US gambling habits showed that 82 percent had gambled in the last year, with lotteries and raffles/office pools the most common (Welte et al, 2002). Other gambling categories identified in the survey included casino and sports gambling, but there’s no mention of fantasy sports.

Still, we cannot overlook elements of gambling in fantasy sports as a factor in its popularity. Among the money being spent in many leagues are the league fees that go to the winners. A “pot” of cash, and the combination of skill and chance are some similarities to more common gambling activities such as poker or betting on sports games. The arousal and thrill-seeking aspects also seem parallel. If gambling can be defined as risking something of value on a yet-to-be-determined event, then fantasy sports fits the description (Bernhard & Eade, 2005). Many fantasy players bet among themselves, leading to pots of thousands of dollars for the winners; some websites are even dedicated to promoting fantasy sports gambling (Chaffin, 2007).

Some of the drawbacks typically associated with gambling can also be applied to fantasy sports (Bernhard et al, 2005). Preoccupation is in evidence by the sheer amount of time poured into this hobby by participants. Family problems may come about due to risking funds, and work woes are possible due to lost productivity. Restlessness and irritability are common in fantasy players, too, as they regularly check game statistics and get down when their team isn’t doing well.

Judith Hiltner and James Walker’s examination of the 1992 system breakdown of Prodigy’s fantasy baseball leagues is an apt example of the lengths to which fantasy players take this game too seriously. Faced with the shutdown, frantic and dismayed fantasy players used the Prodigy bulletin board to express anger, concern, support and friendship over 19 hours (Hiltner & Walker, 1996). This entertaining account of the bulletin board entries provides fascinating sociological insight on the psyche, intellect and mood-swings of fantasy sports players.

Fantasy Sports’ Growing Popularity and Diffusion
Uses and gratifications theory helps explain why people play and enjoy fantasy sports, but diffusion theory can help in identifying the process in which this hobby gained popularity in its early days.

Rogers defines diffusion as “the process by which an innovation is communication through certain channels over times among the members of a social system,” and diffusion theory assesses how individuals decide whether and when to adopt an innovation (Stahl & Maass, 2006). This decision-making process typically contains five steps: 1) knowledge and awareness of an innovation; 2) persuasion or formation of an attitude toward the innovation; 3) decision to adopt or reject the innovation; 4) implementation, where an individual puts the innovation into use; and 5) confirmation, as an individual evaluates the decision.

These basics of diffusion theory can certainly apply to fantasy sports and its growth. The innovation is the game of fantasy sports, the diffusion is the adoption of fantasy sports, and those who might play fantasy sports make up the social system. And the decision-making process clearly fits the adoption pattern of fantasy sports. From my observations and experiences, the typical fantasy sports adoption and diffusion scenario is as follows:

Sports fans hear about fantasy football from friends or co-workers, and form an opinion about it. Sometimes the opinion is positive (excitement to play a game with friends and get more engaged with a sport of interest) or negative (the feeling that fantasy sports are not real sports, much as baseball statistics guru Bill James dismissed fantasy baseball in its early days). At that point, an individual decides to join a league or not. Even skeptics, though, sometimes give fantasy sports a try amid pressure from friends and a desire to display their sports acumen. Once in the league, they implement the tools available in the quest to succeed or gain the full experience; fantasy players access the league website, follow statistics, and seek related content. During and after the season, the fantasy participants will consider the time and money spent, and the overall enjoyment derived from partaking in this hobby. They will evaluate their decision, and confirm whether they will continue to play fantasy sports.

Judging by the growth of the hobby, most are deciding to continue playing fantasy sports, and in many cases are joining more leagues.

Innovators and Early Adopters
As described above, an individual’s adoption or rejection of an innovation is a personal decision; Rogers’ diffusion theory labels five categories of adopters: innovators, early adopters, early majority, later majority, and laggards. Successful innovations follow a S-shaped adoption curve over time, as early adopters embrace an innovation first, followed by a majority, until the innovation becomes common (Stahl & Maass, 2006).

The adoption of fantasy sports from its beginning through the end of the 1990s follows this curve, and the characteristics of adopters are applicable to fantasy players. The innovators are those who created and were involved in the game in its infancy. Early adopters heard about the game, started playing, and shared their enthusiasm with others; this group helped shape opinion throughout the 1990s, and played a significant role in the adoption process. The Internet also helped the diffusion by making it easier for many more people to play fantasy sports, signifying the early majority stage of the hobby at the turn of the century.

The same characteristics hold true for the early fantasy sports industry. Business and media innovators identified economic opportunity in fantasy sports; this group includes league services (Commissioner.com), publications and websites charging for content (Fantasy Football Index, Shandler’s BaseballHQ), and companies offering free access to information and statistics (Rotonews). Early adopters were those who saw the business potential, and created or shaped their companies to provide services and content, and sell advertising; by getting into the fantasy business at this stage, they were strategically prepared for the subsequent early majority phase.

In his study “A Whole New Ballgame: How Fantasy Sports has Evolved in the Mass Media,” Daniel Woodward labels as innovators companies such as ESPN.com and CBS Sportsline for being among the first mass media companies to feature fantasy-related content in 1997. Woodward’s dissertation thoroughly examines the adoption process of the mass media in offering fantasy sports content on websites, television, radio and newspapers. He also posits that mass media, by embracing the profit potential of fantasy sports content, publicized the hobby via its access to a large audience; this resulted in consciously contributing to the diffusion and making it more popular in American culture (Woodward, 2006).

Conclusion
Fantasy sports have become a popular hobby for millions of Americans. The origins of the activity were humble enough, but it experienced steady growth thfough the 1980s and early 1990s, and even more so through the rest of the decade due in large to the emergence of the Internet. Uses and gratifications theory helps to explain why people play fantasy sports, identifying motivating factors and the different types of fantasy players. And diffusion theory helps explain the growing popularity and its early majority status at the turn of the century.
A follow-up paper will focus more on the current popularity of fantasy sports. It will examine the demographic makeup of those who engage in this hobby, and how businesses are going about reaching this coveted and engaged market. This next paper will also look into the future of fantasy sports, including how businesses will continue to tap into the market and what new innovations will become available to make the hobby more enjoyable and convenient. Legal issues will be considered in the context of how they may stem or encourage the growth of fantasy sports. And we will assess the potential for even larger market opportunities, including scalability of the fantasy sports model to other subjects such as entertainment and politics.

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