NFL Lockout Leaves Fantasy Football Businesses in Limbo
We're begging you, National Football League: Please figure out your labor dispute. "We" are, of course, the legions of fantasy football players anxiously wondering if the season will start on time — or at all. Meanwhile, there's another group waiting with us: The small fantasy sports businesses that we spend our money with.
Take FantasySportsTrophies.com, which makes draft boards and trophies for fantasy leagues. Its owner, Tom Harkins, considers June the unofficial kickoff to fantasy football season. He would normally have 10 or so draft boards on order already — three full months before the NFL season actually begins. This year? Zero.
"Right now, it's really slow," Harkins says. "I think a lot of people are holding money on the sidelines. They just don't know where it's going."
"It" is the NFL lockout. For the uninitiated, the league's owners and its players have been unable to come to terms on a new labor agreement, putting the NFL season in jeopardy. The NFL is a massive business; its television contracts alone are worth billions of dollars. Harkins expects that the standoff will ultimately be worked out, and recent news reports indicate that a deal might be in the works. In the meantime, his business and others like it are on standby.
Brian Bruno runs Bruno's Draft Kits and usually starts to see a significant increase in website traffic this time of year, followed shortly by his first wave of sales. The lockout has changed that, at least temporarily.
"As of right now, the sales are basically a trickle," Bruno says. "It's had a big impact."
Because of fantasy football's mainstream popularity, Bruno doesn't expect any lasting drop-off in his business as long as the season starts on time. That popularity bears out in Bruno's sales figures: His football-related revenues are always around 10 times that of baseball, the other sport he serves, year after year. Football is also Harkins's bread and butter: "It's the mack daddy," he says. Football accounts for 85 percent of Harkins's fantasy sports revenue.
Bruno currently has four people on staff and is looking to hire another, but he says the lockout has affected his hiring strategy. "I can't hire people just to be sitting around here doing nothing all day," he says. Harkins's business is usually a solo operation, but he hires two to three seasonal employees every year. Those hires are on hold this year until the lockout picture clears up. "You can't pay people with money that isn't there," he says.
Both businesses are doing things to adjust to the uncertainty. Bruno has posted a lockout policy on his website that includes refunds or future credits in the event that the season is canceled. Harkins is offering to do draft board layouts for his customers free of charge and keep them on file until the lockout is resolved. He also recently launched iTrophyMall.com, which makes trophies and awards for a wider range of uses beyond fantasy sports, in part to diversify his revenue streams.
The meltdown scenario would be if the NFL season was canceled; though that seems unlikely, it is an outside possibility. The other potential boondoggle for fantasy sports businesses is if the lockout is resolved, but closer to the start of the season. Both Bruno and Harkins say that could cause a deluge of demand that will be difficult for some businesses to serve.
"There is a possibility that the orders that I would normally do from June to August for draft boards could hit in three weeks," Harkins says. He's gearing up for that contingency with extra equipment and advance planning.
Bruno, who turned his hobby into a full-time business, sounds confident that things will work out and that football — both real and fantasy — will prevail. Likewise, Harkins is keeping his sense of humor about the lockout and says he's still amazed at how much fantasy football — and his business alongside it — has grown.
"At the end of the day, it's supposed to be all about fun," Harkins says. "I can't believe millionaire players and billionaire owners can't find a way to make this all work."
Kevin Casey is a business writer for Intuit and is passionate about solving small business problems.