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NFL Bets on Fantasy Lounges as TV Sports Keeps Some Fans at Home

August 21, 2013

NFL Bets on Fantasy Lounges as TV Sports Keeps Some Fans at Home

Sports fans prepare their team's fantasy football draft at a Buffalo Wild Wings restaurant in Cincinnati. Photographer: Al Behrman/AP Photo

The National Football League’s biggest partner is becoming a competitor.

Television is becoming so adept at covering games that the NFL, which gets about half its $9.7 billion annual revenue from broadcast fees, wants to be sure that the comforts of home don’t become more attractive than the thrills of the stadium.

As teams try to entice fans with things like huge stadium video screens -- the Houston Texans last week unveiled a pair that each cover one-third of an acre -- the league is embracing fantasy football as one way to keep people paying to watch games in person. The Jacksonville Jaguars plan to open a fantasy football lounge at their EverBank Field this season to cater to fans as interested in highlights from other games as the action on the field. The San Francisco 49ers and Atlanta Falcons have plans for ones in their new buildings as well.

“Our fans are consuming fantasy sports and stats at a level they never had before,” Jaguars Senior Vice President Hussain Naqi said in a telephone interview. “We want to remove any obstacles to a fan coming to the stadium. The lounge will provide a comfortable environment where they can check their scores.”

In fantasy football, participants draft teams of NFL players, then compare their statistics to determine winners. The game has fans paying attention to more football games to see if their players are performing well.

The NFL has embraced the pastime, running games from its website and the “NFL RedZone” from its television studio, a channel that jumps live from game to game to show teams that are about to score.

Bears Fans

“It makes you watch games you’d otherwise turn off and cheer for people you’d never cheer for -- Bears fans rooting for (Green Bay Packers quarterback) Aaron Rodgers to throw touchdowns -- and that’s absolutely fantastic for the league,” said Scott Minto, director of the sports masters of business administration program at San Diego State University. “In addition to creating rabid fans, more eyeballs on games means better ratings for the sponsors.”

The league even added a touch of fantasy football to its annual all-star game, the Pro Bowl. It announced last month that players will no longer represent their conferences, rather the best performers in the league will be drafted by two players voted by fans and two NFL.com fantasy football champions.

Even though most fantasy football leagues have cash prizes -- players often contribute to a pool and the top teams split the money -- the NFL’s stand is that it is a game of skill, not gambling. The league prohibits all personnel from betting on games.

“Someone would have to go to extreme lengths to corrupt numerous players on numerous teams to manipulate their play in order to gather points for a fantasy team,” NFL spokesman Brian McCarthy said in an e-mail.

Trade Association

About 25.1 million people play fantasy football in the U.S., according to the Chicago-based Fantasy Sports Trade Association. About $3.38 billion is spent annually in the U.S. on fantasy sports. The trade association estimates that three-quarters of that, or about $2.54 billion, is spent on football.

One-third of NFL fans play fantasy football, and that’s why more teams will be catering to their needs, said Paul Charchian, 46, president of the association and LeagueSafe.com, a company that processes fantasy league fees.

“There is so much down time in stadiums -- commercial timeouts, quarter breaks and halftime -- those are moments when people are hitting their phones trying to get fantasy team updates,” Charchian said.

This is why most NFL teams will eventually create lounges like the Jaguars and 49ers, where they can accommodate both interests, he said. The pace of the game is perfectly suited to allow fantasy players to make a quick trip to the lounge before and during games.

Lineup Change

“Now, when you’re at the game and it is 2 p.m. and one of your players is suddenly not going to play, you can go make a lineup change,” Charchian said.

Fantasy football joins other lures like massive high-definition televisions to try to make the stadium experience better for fans. The Texans’ new video boards at Reliant Stadium are 277 by 52 feet (84 by 16 meters) over each end zone. They trumped the league’s previous biggest, the two-sided 60-by-160 feet one at Cowboys Stadium in Arlington, Texas.

Sports Bar

In Jacksonville, the 7,000-square-foot fantasy lounge has the feel of a high-tech sports bar, with high-density Wi-Fi, a separate drinks and food menu, and access for any fan with a ticket, Naqi said. The team plans to generate revenue from concessions and a sponsorship agreement. Naqi wouldn’t say how much it cost to build, or how much revenue the team expects to generate. The franchise’s goal is fan satisfaction and improved attendance, he said.

Jacksonville, which finished 2-14 last season, has had trouble selling out its stadium in recent years. In 2005, it covered nearly 10,000 seats to reduce capacity so its games wouldn’t be blacked out on local television. The team hasn’t blacked out a game since 2009, but has been forced to take added measures to sell tickets. Last season team officials allowed fans to bring food into the stadium, and sold unused seats for as low as $20 an hour before kickoff.

The average cost for a family of four to attend an NFL game last season was $443.93, up 3.9 percent from a year earlier, according to Team Marketing Report. The Chicago-based publisher of sports sponsorship information said average tickets cost $78.38, parking $27.35, a beer $7.28 and a hot dog $4.84.

When the 49ers open the $1.3 billion Levis Stadium in Santa Clara, California, next August, founding partner Yahoo! Inc. (YHOO:US) will create a fantasy lounge in a club area where 1,500 fans can follow their teams.

Fantasy Technology

The 49ers, who lost last year’s Super Bowl to the Baltimore Ravens, 34-31, say it will become the most technologically innovative space in the NFL. Yahoo will use the space to promote its slate of fantasy game products.

“Technology, interactivity and fantasy sports; that’s what really drives our ratings and keeps people coming back,” Paraag Marathe, 36, the 49ers’ chief operating officer, said in an interview. “We should have a place that harnesses that.”

Like the Jaguars, the 49ers don’t see the fantasy lounge as a direct driver of revenue. Indirectly, it will contribute, said David Carter, executive director of the University of Southern California’s Sports Business Institute in Los Angeles.

“Embracing fantasy football at the stadiums simultaneously allows fantasy players to let those in their league, their friends, and others know that they are enjoying the game day experience,” Carter said in an interview. “This will create buzz and, managed properly, drive revenue as these fans are up-sold on other NFL content and merchandise.”

To contact the reporter on this story: Curtis Eichelberger in Wilmington, Delaware at ceichelberge@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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