America is becoming addicted to fantasy sports. A Chicago-based outplacement firm estimated that companies lose $7.4 billion during the 17-week NFL season as employees spend an average of 10 minutes of company time each day fidgeting with their teams.
Fantasy sports are big business. While the foundation for early fantasy leagues in the 60s and 70s was laid by a small group of people with an affinity for numbers and a close connection to the game, the industry has expanded from roughly 500,000 players in 1988 to 27 million in 2007.
Of the top five providers of fantasy football leagues (Yahoo! Sports, ESPN, NFL.com, CBS Sports, and Fox Sports), all but one (NFL.com) are among the 500 most visited websites in the United States according to Mintel.
In 2005, the Fantasy Sports Trade Association (which represents 100 industry companies) released the following demographic information about fantasy sports players:
- 92% of fantasy players are male. 77% are married.
- 86% own their homes. 91% are Caucasian.
- 71% have a bachelor’s degree. 92% attended college.
- 59% make over $50,000 annually.
- Players spend an average of $493.60 per year on fantasy.
The 29.9 million current fantasy football participants represent 11 percent of the U.S. population – a 69% growth rate from 2003. And due in large part to recent legislation exempting fantasy sports from the Unlawful Internet Gambling Enforcement Act, it’s safe to assume this industry will continue to rapidly expand in the future.
Fantasy sports are similar to the stock market in the sense that players accumulate points based on on-field performance, strategy is influenced by rules and regulations (set by a league commissioner rather than by the government), and there are different ways to acquire players (a secondary market exists through trades and add/drops). Fittingly, the strategies employed by fantasy sports players are similar to those utilized in finance.
Fantasy auction drafts – in contrast to the alternative “snake” draft – require owners to develop a pre-conceived strategy. Auction drafts are inherently more unpredictable due to the elements of human nature that become apparent during the bidding process. Auction drafts present a high degree of risk, but the potential for higher reward also exists (having the league’s top quarterback and runningback on the same fantasy team is possible in an auction draft, only at the expense of rest-of-roster depth).
Here are a few tips to keep in mind heading into this year’s auction draft:
- Know your league settings (scoring system, roster spots available, etc.)
- Rank and establish a ceiling for players.
- Utilize tier system at each position. Look to identify the best value within each tier.
- Keep bye weeks in mind (you don’t want to draft two players at the same position who will both be unavailable the same week).
- Remain disciplined. Resist the allure of over-bidding on your favorite players or deviating from your pre-draft strategy.
- Remain cognizant of your and your opponents’ rosters and budgets at all times.
- Don’t leave money on the table (there is no reward for having extra cap space following the draft).