Much of the crowd at each Fantasy Sports Trade Association conference is made up of industry veterans — people who have been attending for years and have made or are making their way in the business.

When Advanced Sports Media founder Ted Kasten asked how many out in the audience were in the first two years of starting up a company, roughly half of the 60 or so people in the room raised their hands. That’s what makes a panel such as Thursday afternoon’s “Fantasy Sports Business 101″ worthwhile.

Kasten was particularly candid about his experiences through the first five years plus of ASM, from discussing the benefits (cost) and downside (just about everything else) of hiring an Indian development team in the early stages. Although he preached thrift to anyone building a new business, he cautioned against looking solely at hourly rates — saying that more cost per hour doesn’t necessarily mean greater cost overall.

Lawyer Rishi Nangia of Winson & Strawn opened things — following an intro by Geoff Stein of Mock Draft Central — by running through the various ways of setting up your company and some good and bad features of each. Many single-person startups might favor a sole proprietorship and its dearth of necessary legal paperwork, but it’s an area that new companies need to consider carefully.

Some key reasons to do so came from panelist and accountant Kipp Imel of Professional Practice Consultants. Imel pointed out that incorporating in some way can bring with it legal protection, audit protection — he said sole proprietorships are seven times more likely to be audited by the IRS — and sheer legitimization.

No matter what route a company chooses, though, Imel cautioned to keep focus on debt management, which he called “the No. 1 killer of any business.”

Tai Ward of Fantasy Coverage spoke to the tech side and warned — as Imel did about hiring an accountant — that one needs to gather as much info as possible on potential design or development companies. Seek out recommendations, ask for samples and make sure that anyone you might choose to work with understands and fits within what you’re trying to do.

The fantasy sports industry is awash in startups and small businesses. Besides presenting a good product, those that make it will be those who are smart about the choices they make when getting going.

As we reported last night, 17 candidates are up for election to five spots on the board of directors for the Fantasy Sports Trade Association. As you might have noticed, four of those people are board incumbents. That might lead one to wonder about the remainder of the current board.

Well, association manager Justin Cleveland informs FSB.com that Paul Charchian (LeagueSafe), Jeff Christiansen (FF Toolbox), Jim Corelis (STATS), Jeff Coruccini (Fantasy Football Starters), Kelly Grogan (Athlon/Grogan’s), Scott Higgins (EchoStar), Howard Kamen (USA Today), Ted Kasten (Advanced Sports Media), Peter Schoenke (RotoWire) and Charlie Wiegert (CDM Sports/Fanball) are in the middle of their terms and not yet up for re-election.

The lone current board member who has decided not to seek another term is Dan Cypra of Fantasy Fanatics.

The new term, which runs for three years, will start on April 1 (and we’re not fooling).

See main story for the list of candidates.

The 10th Annual Sports Media & Technology Conference, presented by the Fantasy Sports Association, Sports Business Journal and Sports Business Daily, took place Thursday and Friday amid a tough economic landscape.

Leaders from around the sports media field met in New York City to discuss and learn about the way some top companies are dealing with the tough times and to find out what might be on the industry’s horizon.

Ted Kasten, founder of Advanced Sports Media — which develops the Draft Analyzer fantasy draft software and PlayerSearch, the first sports-focused search engine — was in attendance and shared his notes from the forum with FSB.com:

The economy was obviously a huge focal point. There were three related themes discussed throughout the conference:

1) Companies need dual revenue streams during the economic downturn: Companies with dual revenue streams (advertising revenue plus subscription revenue) will be in much better shape during the economic downturn than companies that rely solely on advertising revenue. Sports, in particular golf, will be hit hard because of their dependence on financial firms and domestic car companies for sponsorships. Jimmy Pitaro of Yahoo pointed out that they have always been tempted to provide all of their fantasy tools, such as the Stat Tracker, for free but never did as those premium products continued to grow every year and are currently growing faster than their free services. Considering the change in online advertising, that was a smart move to retain the premium features.

2) Major sporting events such as the BCS moving to cable: Broadcast networks that rely solely on advertising revenue are unable to compete with ESPN and their powerful dual revenue streams. Demonstrating this was ESPN’s recent acquisition of the rights to the BCS games from Fox. Fox was unable to match the $125 million/year bid from ESPN (Fox currently pays $82.5 million/year for the rights to the BCS). This will be the first time these games will not be available on free broadcast TV.

3) Flight to Quality: Panels repeatedly stated that a “flight to quality” will make the smaller companies feel more of the pain from the downturn in advertising than the larger companies and brands.

The first and third items should be of particular interest to companies within the fantasy industry. “Flight to quality” is a phrase said to originate in stock trading, and it refers to taking investments out of risky ventures in favor of the safest possible entities.

For the purposes of our industry, it could mean advertisers, sponsors or even investors veering away from smaller fantasy outfits or new ventures and throwing their money behind the familiar names.

Any lack of funding from those avenues feed directly into the need for dual revenue streams. Obviously, if a fantasy site can’t pay its way on advertising dollars alone, it has to find other ways to stay viable. That, in turn, brings us to the whole free vs. subscription quandary that not only faces many a fantasy site but all sorts of content and service providers around the Web.

If you’re reading this site, you’re probably already facing these issues, but maybe you’ll find it a little heartening to know that such things are on everyone’s minds throughout the industry — even the big boys.

(For those of you you might have arrived late to the FSB party, here’s another chance to get acquainted with the first business we profiled.)

Company: Advanced Sports Media LLC
Sites: www.draftanalyzer.com and www.playersearch.com
Founder and CEO: Ted Kasten
Launched: 2004
Full time: 2004

Back in 2004, Ted Kasten believed the fantasy football marketplace needed a better draft companion than the “static and outdated rankings provided by magazines,” at least according to the company bio at draftanalyzer.com. To fill the void, he developed Draft Analyzer and launched Draft Dynamix, which now resides under the umbrella of Advanced Sports Media.

The plan that started the whole venture, though, began to form at least two years earlier.

“I began designing the Draft Analyzer prototype as a fun side project on nights and weekends in 2002, when I needed help as a commissioner tracking everyone’s draft picks,” Kasten says.

As those of us who play fantasy sports - or video games, for that matter - well know, it takes folks with such a geek streak to come up the innovations that enhance our games. Kasten’s fun, self-serving side project quickly started to grow.

After beginning with just the draft tracker, he says, he continued to add features that took the platform from merely keeping up with picks to helping him build a better team. Those features include the ability to draw in and combine rankings from various online fantasy-content providers into printable cheat sheets.

The Analyzer also carries a proprietary player-recommendation engine, for which Kasten submitted a federal patent application before launching his business. (Maybe I could explain the algorithmic workings of that tool if I hadn’t skipped out on math classes in college.) Once Kasten had Draft Analyzer build, he headed for the March 2004 Fantasy Sports Trade Association conference, a move he said was crucial to starting and growing his business.

I left the conference with three key partnerships, a better understanding of the fantasy sports market and the confidence that I could be a leader in this critical market niche,” Kasten says. “I became a staple at the FSTA conferences and had a booth showing my software every time. All of my partnerships have come from meeting people at the FSTA conference.

From there, Kasten has licensed his product to five of the top six fantasy football league-hosting sites - including ESPN and CBS Sports - and taken home two industry awards. Draft Analyzer claimed the FSTA’s Best Draft Assistance Tool prize in 2005 and 2007, and the player-recommendation engine was a finalist for best innovation in 2005.

With Draft Analyzer plugging along, Draft Dynamix became Advanced Sports Media in February of this year, the same time that it launched PlayerSearch.

“It took forever to dig through numerous websites to find the latest information on individual players,” Kasten says of his motivation to create a search tool. “There is an enormous amount of great sports content sites, and more and more of them are offering everything for free. We are simply trying to bring all of the great sports content to the surface of the Web, much like Google has for general search.”

PlayerSearch.com does just what it says, gathering news, video, blog posts and the like that relate to a particular athlete and grouping the links in categories national news sources, local video and podcasts.

“We are not trying to create another sports portal. That has been done,” Kasten says. “All of our links take users to the original article or video, so the publisher gets full credit for their work. The ultimate goal of PlayerSearch is to make it quick and easy to access the best sports content on the Web.”

In addition to its free-standing site, PlayerSearch offers a widget that can be picked up by other sites. SportsBuff.com, which is part of the same company that owns this site, is among those that carry the widget.