Organization: Fantasy Sports Trade Association
Launch date: 1999
As the FSTA gets ready to host its 2009 winter business conference this Tuesday and Wednesday in Florida, president Jeff Thomas (who also owns this site) and association manager Justin Cleveland took time out to answer some questions about the organization. In five cases, initials indicate the particular respondent to clarify first-person accounts. The other answers have been cobbled together from material supplied by both Thomas and Cleveland.
1) Can you describe the fantasy industry landscape of 1998-99, when the FSTA was being organized? How connected were companies and leaders in the industry at that point and before?
JT: In the 1997 to 1999 time frame, we were still primarily talking about pre-Internet fantasy sports. Games and leagues were just starting to cross over from PC to the Internet. Most content companies were still delivering their products via mail and fax. The larger game operators were managing games via interactive voice response systems and live customer service reps.
The industry was made up of a relatively small group of game and league operators. Anyone competing on the national scene kept in touch. We all knew each other. For some reason, a long list of companies claim to have been around during those times, but most were content-only companies or were operating games on a very small, local level. As larger companies started looking for help to run their games, they would reach out to a few companies. We quickly got to know each other, for many reasons, including the fact that we were bidding against each other for every project.
The challenges of the times were primarily licensing issues/expense and legality. Content companies have never had to deal with licensing issues, so it was a game- and league-operator issue only. All or most game operators looked at working with the players associations from a marketing perspective — work with them, pay them a bit of a ransom, and they will help promote your products. In the end, they didn’t do much to promote.
From a legality perspective, companies and players associations and leagues worked to communicate a simple message: Fantasy sports are games of skill. Many, to be safe, operated using a void-of-all-services, free-entry option.
2) The FSTA history page cites a 1997 meeting hosted by CDM Fantasy Sports, where they invited Sportsline, Prime Sports Interactive, Sports Buff, and Sporting News to St. Louis. Was this the first meeting of the FSTA?
JT: Not really. It was the first organized meeting of the top game and league management companies of the 1990s, and we discussed whether an association of some kind should be created. We were more focused on lobbying efforts that CDM was spearheading, to communicate why fantasy sports are legal and should be excluded from any gambling law that was being discussed.
In the mid-1990s, meetings and conventions were held in Nevada and Minnesota and Florida, hosted by Fantasy Insights and Fantasy Football Weekly. In 1998, during a Fantasy Insights Convention, a meeting was organized to again discuss pending legislation and several other topics related to the industry. The representatives from CDM, Fantasy Insights, EA Sports, The Sporting News, and USFANS decided that it was time to create an official organization to help promote fantasy sports, and the Fantasy Sports Trade Association was born. The first FSTA conference was held in 1999.
3) How did the FSTA go about trying to bring together fantasy sports companies at the start? How receptive of the idea were leaders around the industry in those early days?
JT: The first two FSTA Presidents were Carl Foster from USFANS and Greg Ambrosius from Krause. They both did a great job of creating opportunities for industry executives to network. We were a very small industry then, and we’re still small in many ways. The industry is like a poker game — we can learn a lot from each other, but nobody wants to show everything they’re working on. The network has definite benefits, but it’s certainly still true that industry participants don’t want to give away all of their plans.
4) Why was and is it important for fantasy sports companies to be unified in such a way? What has the FSTA enabled the industry to accomplish that the individual companies couldn’t have done themselves?
JC: Every fantasy sports company serves a different segment of the potential audience. By uniting through the FSTA, these companies can learn different ways of doing business that may attract new clients. It’s like a writer’s colloquium — we can get together and talk about our work in an open, honest environment and receive beneficial feedback.
It’s almost funny to think about any fantasy company needing another today, when the games have become a financial juggernaut and there are multinational corporations that are presenting fantasy sports products. The FSTA grew out of the era when fantasy sports were a cottage industry that appealed to a niche audience. By working together within the FSTA, these early companies were able to reinforce their strengths while collaborating on their weaknesses to create a more polished product that appealed to wider audiences. At the same time they were all innovating to set the standards we all enjoy today.
As for today, by providing a unified front through the FSTA, fantasy companies have been able to work with and understand rules and laws regarding copyrights and to differentiate games of skill from games of chance to follow guidelines published in UIGEA legislation. For example, I was working today with a gentleman who started up a company but was having trouble finding a merchant services provider. More than a few auditors have flagged fantasy sports as high risk. He called me and I was able to work with their legal department to differentiate fantasy sports from gambling and get his company’s application approved.
That’s where the FSTA is as relevant as ever: We are a clearinghouse of information regarding the industry, a powerful networking tool and a backup for both fantasy sports providers and a protection for players.
5) What has the FSTA meant to the promotion of the fantasy sports industry as a whole and its acclimation into American sports’ mainstream?
As mentioned earlier, the early days of the FSTA were marked by a small group of dedicated game providers. Since then we have been part of a concerted effort to help promote the industry. What the FSTA does is provide a unified, unbiased perspective on fantasy sports games to the media and public. Since our research isn’t tied to any one company or type of game, we can speak for the industry as a whole and, at the same time, promote individuals.
Starting our marketing research efforts with Dr. Kim Beason of the University of Mississippi began to give us measurements to discuss, consumer behavior to discuss and debate, and answers to provide to journalists. Journalistic demand for our opinions and our statistical research has grown every year. It’s almost too much too keep up with now.
6) What are the benefits of membership in the FSTA? Why should a company join?
Anyone who has ever been a factor or will be a factor in the fantasy sports industry is a member of the FSTA or attends our conferences. We represent the large, medium, small and tiny companies. We represent the startups, the brands wanting to learn about fantasy sports and individuals that just want to brainstorm about potential entrepreneurial efforts.
Membership in the FSTA gives access to research that will help businesses better address their current clients and attract new traffic. Twice annually the FSTA holds a research symposium and business conference where everyone from upstart companies to the leaders of the industry convene for two days of networking and sharing ideas and successful strategies to help grow the industry. Being a member of the FSTA gives discounted conference registration.
Membership also provides instant recognition and legitimization — users can know that the FSTA seal is a mark of quality and integrity.
7) What was the impetus for the creation of the FSTA Industry Recognition Awards?
They were designed to celebrate the successes in our industry as recognized by our members. The awards are, like membership in the FSTA, a great way to prove the value of a product. Nothing validates more than a statue (or, in our case, a plaque and electronic icon)! The entire process was redesigned in 2005 to create a nomination process, a review and finalist process, and an audited final outcome for all categories.
How important are the awards to the overall value of the FSTA and membership in it?
Put yourself in the shoes of a fantasy sports startup trying to make a name for yourself or trying to impress investors. A FSTA Industry Recognition Award can help prove a concept and build business development opportunities along the way. Overall, the awards are just a small part of the value proposition of the FSTA. That said, making the finalist list or winning the award certainly brings 100 times the value of our low annual membership fee.
9) How has the FSTA changed to serve an industry that has exploded in size, reach and diversity of products, and how will it continue to adapt to a still-growing market?
Each president has moved the Association forward, with changes that have supported the industry along the way. We made some difficult decisions over the past three years, including taking on the responsibility of owning and managing our own business conferences twice a year. We now make modest profits on each conference, and the cash flow has helped hire a dedicated association manager to support the board of directors and the membership. We have also created several distinct committees and assigned board members to each committee. A board position isn’t something to add to your résumé or to impress co-workers. Board members must now contribute on a monthly basis. Committees include executive committee, business conference, finance, communication, membership, market research and awards. The committees report on progress during monthly board calls. If they do nothing or don’t accomplish much, they hear about it from other board members that are carrying their weight.
Committees are modified, added or discontinued to address current issues and needs. We added the communication committee in 2008 based on the sheer volume of communication that’s required to keep members up-to-date and to grow the Association.
10) What else should we expect to see from the FSTA, going forward?
JT: More of the same. We’ve created a model that works for our members. We will continue to evolve. One area to watch is the definition of “fantasy sports.” We now have the UIGEA and successful rulings in the CDM-MLB case to help guide our industry. This has also opened doors to companies that would like to use the “fantasy” label for their own gains. If a game is not fantasy, there’s nothing stopping a company from using the fantasy label, but we should provide clear guidelines, and I see some advancement in this area in the next year or two. Without this guideline, consumers and legislators could very well be confused, and that could end up reversing much of the hard work and accomplishment of the past five years.
A roundup of recent posts on the FSB News page.
