On Aug. 22, the Toronto Blue Jays defeated the Anaheim Angels, 15-3. More than an hour and a half before its actual conclusion, the game was all but decided when Toronto took a 10-0 lead with a seven-run frame in the fourth inning.
And yet, tucked away in a ballroom on the third floor of the Cosmopolitan hotel and casino in Las Vegas, 70 some odd fantasy players—and certainly countless more across the country—were glued to the big screens, sweating every out as the Blue Jays took their final bat in the top of the ninth.
The outcome of the game was of little interest and no consequence. But depending on what happened in Troy Tulowitzki’s final at bat, large sums of money stood to change hands in FanDuel’s World Fantasy Baseball Championship.
Tulo chopped a grounder to the shortstop, who retired him easily. At the Cosmopolitan, about half the room groaned, while the other half celebrated.
In condensed form, such is the appeal of daily fantasy sports to professional leagues.
Fantasy players watch more, watch longer and are engaged with the product at a deeper level than the average fan who roots for the home team the way they always have.
Those captive, DVR-proof viewers are coveted by advertisers. Those advertisers, who will pay premium dollar for the ad space, are coveted by broadcasters. And those broadcasters are willing to pay ever-increasing sums for the right to air live professional sports.
Ratings for NFL games continue to climb, and with them, so too does the television revenue generated by the league. In 2013, each NFL team received $131 million in broadcast revenue sharing; by 2016, that number will reach $181 million.
Pinpointing the exact impact fantasy sports have had in driving that number is practically impossible given the number of variables that can play a role in the number of viewers who tune in to any given game.
But Dr. John Fortunato, a professor at the Fordham University School of Business, says it’s been established that interest in fantasy football is among those determining factors for the NFL. In a 2011 study, Fortunato looked at the fantasy ownership percentage of NFL players and ran an analysis of what effect they had on television ratings.
“It provided some evidence that fantasy is really helping increase viewership,” Fortunato said. “That was sort of the big takeaway, and other studies have found similar results. I looked at it from the aspect of ownership, the amount of players that were widely held in fantasy leagues and if they were participating in the games on television. That was a driver of a ratings increase.”
Since then, daily fantasy sports have increased dramatically in popularity—when the study was published, industry leader DraftKings didn’t yet exist.
Common sense would seem to dictate that the growth of the daily game would have a similar effect on viewership patterns, because among all the variables that factor into sports television ratings, perhaps none is more meaningful than the presence of real money on the line.
“The gambling angle has been found as a motivator for the regular fantasy leagues, where it might just be a couple of bucks among friends,” Fortunato said. “Now, when you’re talking some of these daily leagues with some serious money on the line, it certainly increases it.”
Similarly, a recent study found that the point spread in college football games often has a significant effect on television ratings.
But while daily fantasy sports players have been shown to consume an elevated level of sports-related media, it remains unclear how much impact the sub-market of daily can have on NFL ratings as compared to traditional, season-long players.
“In the daily fantasy leagues, because there’s real money on the line, is that bringing in the casual fan, or is it just another way for the avid fan to engage?” Fortunato said. “I think when we talk about the season-long fantasy leagues, I think that is bringing some of the casual fan in, because it is easy. You draft once, you set your lineup, there’s not huge stakes involved. So their level of knowledge and their level of participation is commiserate with that level of a league. When you get into these daily fantasy leagues with big money involved, the data analytics that some participants are using, it’s incredible.
“So I think that’s a really relevant question—what type of fan is daily bringing in?”
What does all this mean for DFS?
Unlike the NBA and MLB, which have ownership stakes in FanDuel and DraftKings, respectively, the NFL has remained on the sidelines in terms of partnerships.
Nonetheless, the league would appear to have an interest in the sustained success of daily fantasy’s major players. Numerous NFL franchises have deals with daily fantasy companies, and FanDuel and DraftKings are major advertisers on the NFL’s media channels, as well as those of its broadcast partners.
And regardless of the number of unique viewers daily fantasy brings in relative to traditional, season-long players, pro sports leagues are big fans over the overall engagement daily fantasy drives.
“This actually drives consumption of their product,” FanDuel CEO Nigel Eccles told USA Today. “That’s why we have a big deal with the NBA, and that’s what we’d love to get to with the other leagues.”