Source of Revenue: Fantasy Sports Leagues

We already know that sports leagues have several sources of revenue. Some of these sources have been continuing for a long period of time such as ticket sales and sponsorships. On the other hand, there are some sources of revenue that have evolved fairly recently. For example, the generation of revenue by the sale of digital media rights is one such innovation.

Just like digital marketing rights, sporting leagues across the world have now started using fantasy sports leagues in order to be able to generate more revenue. It is now common practice for large sporting leagues to have an official fantasy sports partner.

For instance, Indian Premier League which is the largest sports league for cricket has partnered with a company called Dream 11. Dream 11 has been designated as the official fantasy sports partner for the Indian Premier League. Similarly, NASCAR has also authorized PrizePicks to be its official fantasy sports partner. This trend is quickly spreading all across the world.

The appointment of a fantasy sports league as the official partner for an event has become a major source of revenue. However, many people are not aware of why sports fantasy leagues are willing to pay huge sums of money and what benefits they derive from such official partnerships.

In this article, we will have a closer look at what an official fantasy league sports partner is and what the issues related to being associated with such partners.

What is a Fantasy Sports League?

A fantasy sports league is an online game that is played by individual sports fans. These games are simulation games wherein the individual player can pretend to be the manager of the sports team. They can then create their own team from all the players who are playing on that particular day.

The online game players obtain points based on the real-life performance of these players in the actual match happening on that day. There are other features that are included in order to make the online game more interesting.

For instance, the online player can designate one particular player as captain and then they can obtain double the usual points for the performance of that player.

Fantasy sports games generally have a monetary component which means that online players have to pay a small fee in order to participate. The money collected from all the players is pooled together and paid out to people who have the highest points.

What is an Official Fantasy Sports Partner?

Now that we know what fantasy sports leagues are, it is important for us to know why actual sports leagues need to partner with fantasy sports leagues. The main reason behind this partnership is the intellectual property owned by the sports league.

The sports league owns the trademark of the league and the individual teams. It also owns the logos and any other intellectual property including player names and player statistics. Player statistics are very important in fantasy leagues because online players select their team members after studying their recent as well as historical statistics.

Hence, if a fantasy league wants to use the official name of the league, the sporting teams, their logos, player names as well and player statistics of the original league, they have to enter into a bidding process and become a sponsor.

In lieu of the sponsorship, the sports league provides the fantasy sports league, the exclusive rights to use brands, logos, statistics, and other intellectual property associated with the league.

Why are Official Fantasy Sports Partners Important?

Fantasy sports leagues have become a very important way for sports leagues to interact with a certain demographic of their audience.

Sports leagues have realized that the younger audience prefers watching their game over a mobile device instead of a television. Also, the younger audience tends to prefer an interactive viewing experience. Fantasy sports leagues are able to provide them with this interactive experience. It is for this reason that fantasy sports leagues are growing at a remarkable pace.

Now, since the fantasy sports leagues are basically making money based on the product being sold by the sports league, it is only logical for the sports leagues to explore this source of revenue. Revenue from fantasy sports leagues is probably the newest and also the fastest-growing source of revenue as far as sports leagues are concerned.

Issues With Fantasy Leagues

Fantasy leagues are quickly being absorbed by the sports leagues and are being promoted as being a part of the culture associated with the sporting league. However, there are some glaring ethical issues that need to be sorted out with regard to fantasy leagues.

1. Gambling: For example, many critics have alleged that fantasy leagues encourage gambling in the name of sports. However, the proponents of fantasy leagues have stated that it is a game of skill and not a game of chance.

   Players need to be aware of the recent form of players as well as other important factors before they select a team. Hence, it cannot and should not be likened to gambling. Also, since it is allowed by the governments of different nations, sports leagues have no authority to pass moral judgment on the same.

2. Piracy: Secondly, only one fantasy league can actually partner with the sports league. However, there are many other leagues that do not officially partner with the sports league but instead distort the names of the teams and players. These fantasy league applications are using legal loopholes to do piracy.

Hence, it can be said that fantasy sports leagues have now become an important source of revenue for sports leagues across the world. However, it also needs to be understood that there are some issues related to fantasy leagues that need to be mitigated before making them mainstream.

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