Scott Wilderman started out like a lot of sports fans. He loved baseball, and in 1986 he joined a rotisserie baseball league with friends. Like many others, Wilderman discovered it was a lot of fun. What he never expected was that "roto," as he calls it, would play such a big part in his life that he would practically stop his post-doctoral studies in nuclear medicine at the
University of Michigan
to launch a business devoted to his hobby.
Wilderman, it turns out, was simply catching a new wave in a big business that's poised to grow even larger. He is a player in the world of Internet-based fantasy games -- a world that's having a population explosion. Rotisserie baseball is a statistical game. People who play it join a league, draft major-league players and then compete using the actual statistics of the players. It's a bit odd because those who play often find themselves rooting for certain players instead of teams. But it has gained many fans.
"I think part of the fun is that you can get a feel for owning a team," says Wilderman, who in 1994 launched a fantasy sports statistical service called
Total Quality Stats
(tqstats.com), an example of one of the better stats services. "You do the research, you draft the players, and then you can make trades or decisions about sending players down or bringing players up.
"How you do depends on you, and it makes following the baseball season that much more fun."
Games like this have become enormously popular. Wilderman and others say that more than 10 million people play sports fantasy games like roto. The format has been adapted so the game can be played with football, basketball and hockey. In 1994, Wilderman secured 20 leagues as clients. Today roughly 1,500 leagues use his company for their statistics, he says.
For the last two years, Wilderman has curtailed his studies, and he now has four employees. And the Ann Arbor-based TQS records gross revenue of about $200,000 annually. "Each year the number of leagues just about doubles," he says.
The growing popularity of the games has generated a number of statistical services like Wilderman's that keep track of how teams in a league are faring. The business used to be conducted by phone, fax or U.S. mail, but the Internet changed all that. Now participants in a league can key in their team's transactions. High-tech advances make tracking statistical information automated. Now, participants can get a box score each morning of the baseball season detailing how their players did the night before. Statistical services generate revenue by charging leagues an average of about $100 a season -- and by posting advertising on their Web pages.
(rotonews.com) offers a free statistical service -- obviously a popular option -- and earns income from on-site ads.
Big businesses are beginning to see the potential. Lots of sports fans use the
site (cbssportsline.com) to research players' backgrounds and read news about them. The site, which has fantasy sports services available, is one of several that have the exposure and resources that may help them dominate the market.
Web site (ESPNSportszone.com) offers sports fantasy games, as does
(cnnsi.com). They allow a single individual (for about $20) to participate in a league with dozens of others from around the country.
"It's a cash cow for them, because with all their exposure, big companies like that are bound to attract people to their games," says Eric Barmack, vice president of operations at Manhattan-based
Small World Sports
, another fantasy-game company, which is contracted to provide games to the CNN/SI site. "We'll get 200,000 players into a game sometimes at our site
which is free. ESPN has much more exposure and is getting $20 from each participant. It's a lot of money."
Other spinoffs of the phenomenon are businesses that supply general information about teams, or rate players -- or give updates about injuries that might affect players' playing time. Additionally, there are software companies that put out products that enable leagues to do their own statistics via an Internet download.
And a new generation of fantasy games is adding a stock market wrinkle to the fun.
Small World Sports is an innovator in this field. "We saw that there were four sections in the newspaper, and that one was sports and one was business," Barmack says. "We now have games that attract readers of both. We have sports fans and people who like to pick stocks." Just like roto, a team's performance is based on the on-field performance of the actual players. But "each player is a stock with a value that changes depending on how many people are buying him or selling him," Barmack says. So if you pick a nobody who turns out to be great, his value goes up and you can sell him. That will give you more "money" to go out and get other good players.
How popular are these games? Barmack says his company's server has more than 2 million pages on it each day. And although Small World doesn't charge participants, it does get $5 from advertisers for every 1,000 pages of ads. Barmack says that the company, started in 1997, grossed about $550,000 last year. And this year? In February alone, Small World had $120,000 in revenue, he says, bolstering estimates that it will gross between $1.75 million and $2 million a year.
Mixing the addictive qualities of playing the stock market and sports fantasy games. Now that's dangerous.
Roger Rubin has covered sports in the New York area for 10 years. He currently is a staff writer for the New York Daily News, covering high school and college sports. He appreciates your feedback at email@example.com.