In the previous article, we have already seen what fantasy sports leagues are.
We also know why sports leagues across the world are trying to associate themselves with fantasy sports companies. This is despite the fact that such sports companies are also heavily criticized by one section of society and they are often said to be the gateway to gambling.
Sports leagues are of the opinion that fantasy sports require a combination of luck and skill to be successful. They are not purely dependent upon chance. Hence, like the stock market, they cannot be conflated with gambling.
Many sports leagues consider fantasy sports to be a new and unexplored avenue that will drive future growth in the already saturated sports market. This is because fantasy sports are a wonderful tool to drive several marketing objectives.
In this article, we will have a closer look at some of the economic benefits provided by fantasy sports leagues.
- Increased Engagement: The first and foremost benefit of fantasy sports leagues is the fact that they provide increased user-level engagement in sporting events. When users do not have any stake in the sporting event, they do not follow it as closely. However, if they do have a stake in the event, even if it is a symbolic small monetary stake, viewers tend to pay a lot more attention to the game.
Also, some fantasy sporting applications allow users to make some changes in their team based on the current state of affairs in the actual match. Hence, sporting leagues have noticed that their engagement with their fans increases manifold if they use fantasy sporting leagues.
The level of engagement is an important economic parameter that influences the advertisement and sponsorship rates as well. It is for this reason that sports leagues encourage fantasy sports by partnering with one of the companies and designating them as the official fantasy sports partner.
- Increased Viewership: Another important point to note about fantasy league sports is the fact that not only does it increase the engagement of the existing viewers, but it also increases the number of viewers who watch the event. This is because fantasy sporting league generally changes the nature of sports from an individual experience to a group experience.
It is common for friends to compete with each other in fantasy sports leagues. Also, it is common for workplaces to have competitions wherein their employees participate in such fantasy sports leagues. As a result, individuals who would not have otherwise watched the event, also end up watching it since it becomes a viewership experience. This is another reason that sports league prefers to partner with fantasy leagues since their overall viewership end up being increased.
- User Level Data: Users can play fantasy sports leagues by downloading mobile applications on their phones. Now, mobile applications have a lot of advantages as far as marketing is concerned.
Mobile applications can help track the other activities performed by the user on the phone. As such, sports leagues can obtain a lot of user-level data from fantasy sports league applications.
However, the sports leagues also need to invest in IT infrastructure so that they can use data analytics tools that can help them understand the types of products and services that are purchased by the customers. This high level of data relating to the viewers can be very useful for sports leagues. If used diligently, it can lead to a lot of monetary benefits for the league as a whole.
- Targeted Sponsorships: The data derived in the previous step can be put to good use by obtaining targeted sponsorships.
As mentioned above, fantasy sports leagues can help collect extensive data about a certain demographic of users. This data can be used as a base and further extrapolation can be made using data science. This helps to develop a clearer understanding of the target audience.
Also, it is easier to convince sponsors to increase the amount of sponsorship funds once there is some sort of credible data present to back up the claims being made. Hence, it can be said that fantasy sports leagues supplement other sources of income for the league by providing them with valuable information that can be used to increase the value of advertisements as well as the sponsorship being sold.
- New Revenue Stream: Lastly, fantasy sports leagues are an important source of revenue for sporting leagues.
The revenue derived from fantasy sporting leagues has already reached around 25% of the revenue derived from broadcasting revenue worldwide. This is a huge number considering the fact that the idea of fantasy sports leagues is quite nascent. Hence, it can be said that the idea is already very successful and given the growth rate, it is likely to succeed at an even faster rate in the future.
The bottom line is that there are several benefits that accrue to sporting leagues as a result of fantasy sports leagues. This is the reason why sports leagues across the world have started ignoring the so-called disadvantages and negative publicity associated with fantasy sports and are making them an integral part of their marketing as well as their user experience.
