The API Economy Drives Fantasy Football Revenue

2024 Update: When I wrote this article a few years ago, I realized that fantasy sports was a great example of the broader API economy (and a pretty interesting one to a sports 🏀 nut 🏈 like me). Now I’m writing a book for O’Reilly where I put the reader in the shoes of a fantasy website building out brand new APIs with Python and FastAPI. The first two chapters are available in early release, check out Hands-On APIs for AI and Data Science.

If businesses can connect their offerings to third-party providers, they can serve their customer better and generate additional value. The APIs they provide and consume make this possible. This is the basis of the API Economy.

Let’s look at the API Economy through the lens of Fantasy Football — a sports entertainment segment with tens of millions of customers in the U.S. The takeaways should translate well to other digital experiences.

TL;DR: APIs allow Fantasy Football platforms to deliver advice in a single pane of glass from multiple league hosts, like in this image. Customers are willing to pay premium rates for this connected web experience.

APIs allow advice websites to deliver customers a single-pane-of-glass view of their leagues.

Foundational Concepts for the API Economy

One key concept in the API economy is Data Hosting. Customers have primary relationships with some entities (like banks, healthcare providers, governmental entities) that they trust to host their vital information. They have secondary relationships with other related businesses (like budgeting software, health insurance providers). They expect to be able to approve sharing of their data between these entities (the core function of 3-legged OAuth & OpenID). The customer owns their own data, but the data host holds important and potentially valuable position.

A second key concept is the Network Effect. As the primary data host makes the data available to read and update via secure APIs, secondary entities can provide value-added services to the customer by consuming those APIs. This can generate revenue, website traffic, and customer retention for both the API Provider and API Consumer. Both entities are providing a better service to this customer through their interactions.

The Fantasy Football Customer Season

One thing most fantasy football setups have in common is that they simulate acquiring players, setting starting lineups, and watching the results based on real-life NFL games. Here’s what a typical “season” might look like:

• Summer — A group of 8–16 Customers sign up to manage a team on a League Host website and are formed into a “league”. (Some league hosts charge for this service, and others are free.)
• August to September — The league conducts an online real-time event called a “fantasy draft”, where managers each select around 15 NFL players to be on their team.
• September to November — Each week during the season, teams play head-to-head games on the league host website, scoring points when the players on their team get statistics in NFL games. (E.g. a quarterback throws a touchdown and gets 4 points for his fantasy team.)
• November — After about 14 weeks of the NFL season, around half of the teams “make the playoffs”. The rest are eliminated.
• December — During weeks 15–17, teams play a single-elimination tournament on the league host website. A single team is crowned champion.

Digital Experience Touchpoints For Fantasy Football

Although the ways to sell products and services for this hobby are limitless, I will focus on a couple of digital experiences and how APIs enable them. This diagram shows the digital experience touchpoints for my scenario.

Digital Experience Touchpoints For Fantasy Football

1. Customer — Individual who owns a team in one or more leagues hosted on one or more League Hosts. Many customers visit one or more Advice Provider websites to get help managing a team. A smaller subset of customers register for free or paid Consolidated Team Management Platforms.

• Primary experience goal: All websites should be able to communicate with one another to reduce manual work. Expects their data to be available to multiple websites.
• Estimated customers: I read the number 40 million players in several sources, but don’t have any firm numbers. Fantasy football is the largest of U.S. fantasy sports.

2. League Host (primary) — This is a web platform that enables several key activities including registering teams, conducting online draft events, calculating game scores to determine winners, and hosting various communication methods such as chat, message boards, and polls. They are the single source of truth for fantasy wins and losses, which are the primary measure of success. They also have various team management features that are also offered in the next two categories. Many customers only use this website (and won’t benefit from the API connections).

• Revenue sources observed: Primarily advertising and registration fees. Affiliate referrals to advice websites and management tools.
• Business drivers: generating ad impressions, customer growth, customer retention year-to-year, market penetration in third-party tools.
• Key asset: owns customer relationships for at least one season due to registration in a league.

3. Advice and Analysis Website (secondary) — This is a website that provides custom analysis or advice to customers tailored to their league.

• Revenue sources observed: Advertising and premium products.
• Business drivers: generating ad impressions, selling premium products.
• Competitive advantage: expertise and reputation in the hobby.

4. Consolidated Team Management Platform (secondary) — This is a website that provides a single-pane-of-glass for a customer of multiple League Hosts websites to view their teams and conduct management activities such as drafting, adding players, dropping players, and making trades.

• Revenue sources observed: Advertising, premium products.
• Business drivers: generating ad impressions, selling premium products.
• Competitive advantage: ability to connect to multiple league hosts

Seeing The Digital Experience In Action

Now let’s look at real-world examples of these parts of the digital experience for fantasy football.

League Host — MyFantasyLeague.com

As mentioned, the League Host is a full-featured website that has many digital experiences. The League Host website in this case is a paid service with limited or no advertisements. Their primary business drivers are the initial registration of teams before drafts being.

This is a view of an individual game in an individual week of a season. Two customers’ teams had a head-to-head game with the lineups selected based on advice from multiple sources. The second team scored more points based upon the performances of real NFL players that week and won this game.

Head-to-head game on MyFantasyLeague.com

League Host APIs available

According to their API documentation, this League Host has APIs that provide access to just about everything on their platform. This includes data such as teams, owners, rosters, and results, and live drafting features. It also includes interactions such as adding and dropping players and setting lineups.

According to their API docs, here are the benefits to MyFantasyLeague:

The goal of this program is to provide the tools for our community to enhance the overall experience and enjoyment of the entire MFL user base. If you are a developer, these pages should provide you with all the information you need to create applications and other enhancements using the MFL platform.

Here is the sales pitch that this league host gives to developers consuming their APIs: You have a built-in audience of over 200,000 enthusiastic fantasy football participants to market your product to, and we can help get the word out to those customers for you.

Business takeaway: The League Host believes that the customer’s experience is enhanced by opening the data to outside experience providers, and API consumers can benefit from serving their customers. This League Host also reduced their maintenance cost because they do not provide mobile apps to their league. Third party developers have published mobile apps on the Apple and Android app stores.

This is a pretty good description of “building an ecosystem” — a variety of channels and services that encourage their customers to choose them as League Host instead of another.

League Host Example — Yahoo! Fantasy

The Yahoo! Fantasy league host provides services similar to ESPN, and appears to have a similar business model. They are explicit in their connections with Advice Websites and Consolidated Management Tools, by marketing these third-party services to their customers via affiliate linked ads.

League Host referral to Advice Websites and Consolidated Team Management tools.

The Yahoo! API Docs are here: https://developer.yahoo.com/fantasysports/guide/

League Host Example — ESPN Fantasy

Another example of a League Host is https://espn.com/fantasy. This has a very different business model because the hosting service is free and the host does provide a dedicated mobile app. The APIs apparently are not “officially” released for the public usage, but several enterprising programmers have tracked down the details and shared their findings over the years. Examples here and here.

Advice and Analysis Website — Footballguys Rate My Team

The most important time that a customer purchases fantasy football services is before the draft. The next most important time is before the season starts. The footballguys.com website provides a standalone ‘Rate My Team’ tool that connects to the League Host website and imports the teams. It is a free (loss-leader) product that targets customers in the post-draft, pre-season sweet spot when they are still open to purchasing premium advice.

Although many ‘Rate My Team’ or ‘Rate My Draft’ tools are available, this site provides a couple of advantages that are enabled by APIs.

1. Rather than requiring the customers to enter the 15 or so players by hand or copy/paste them into the tool, the website imports them from the League Host by API.
2. The website does not require the customer to create an account. The tool uses the League Host credentials to call the host’s API and load the data.

Connecting to League Hosts on Footballguys.com

It looks like the largest League Hosts receive top billing, but more than a dozen League Hosts can be connected to this service.

After importing the data, the site gives letter grades for the draft performance of each team in the customer’s league. (Who doesn’t like to get a good grade?)

Team rating scores on Footballguys.com

To get a detailed report with advice about how to improve the team, the customer gives their email address, entering the sales funnel so that Footballguys can market additional free and premium services to them, including a Consolidated Management Tool.

Here is a sample sentence from the emailed report : With great in-season management, we think you have about an 85 percent chance of making the playoffs. Our Matchup and Waiver Wire tools at Footballguys.com would be a great place to start!

Business Takeaway: The site in this case is an API Consumer of multiple League Host APIs. They can provide a standalone free service to the customers based upon the customer’s data from their League Host. Once they provide this free service, they can market additional free and premium services.

If those League Hosts want to enable this kind of value-added experience for their customers, they would be wise to provide an API and market it to advice sites like this one to get good real estate.

Consolidated Team Management Platform— FantasyPros.com

The key word in this category is the first one: consolidated. I mentioned that many of those 40 million fantasy football managers manage more than one team, which may also be on more than one league host. League hosts provide some team management functions and advice to owners on the league website.

Because of this, third-party Consolidated Management Platforms can provide several key advantages that owners will pay extra for:

• They are a single pane of glass for multiple teams from multiple League Hosts.
• Their services are focused on managing teams (in competition against other owners) instead of running the league.
• Their advice is not displayed directly on the League Host site, so it can be a competitive advantage for an owner.

I am going to use FantasyPros.com for this example, but the capabilities I will discuss are available on several different platforms.

Realtime Drafting Assistance — I mentioned that drafting a team is the task that customers are willing to spend the most for assistance. That is the first service the team management platforms perform. While a live draft occurs on the League Host website, the management platform uses APIs to track the progress of all the picks as they occur, and submit picks to the website via API when it is the owner’s turn.

Real-time drafting assistance on FantasyPros.com

In-Season Team Management — When the season begins, the management platform can sync to multiple League Hosts and advise owners about picking up additional players or starting. This provides the single management view that is tailored to the customer by caching data from multiple league hosts and providing customer experiences on their platform. Many platforms provide predictive analytics and scoring projections using proprietary models.

The consolidated platform provides a single pane of glass to manage teams from 3 different League Hosts.

Additional teams are added by using the credentials from the League Host sites. Notice the prime real estate given to four league hosts and the rest on a drop-down.

League Host connections on FantasyPros.com

Business Impact: The Consolidated Team Management Platform is likely the most expensive service that the customer purchases in a season. They probably pay more for this than the actual hosting of the league, which in many cases is a free (ad-supported) service. The competitive advantage for these platforms is their connectivity with multiple League Hosts, via the host’s APIs. This means they have to maintain relationships with the league host and potentially coordinate rate limits and service level agreements with the hosts.

On the League Host’s part, being available to major Team Management Platforms is a critical business function. Remember the real estate on the team import page above: what gets a League Host a button to the main page instead of being on the drop-down? Could that be an outcome of a developer relations (devrel) function?

Conclusion: APIs Are Invisible But Their Functions Are Expected By Customers

I would guess that very few fantasy football customers are aware of the role that APIs play in their enjoyment of this hobby. However, they take for granted that their digital services will be able to interact with each other, and that their data will be sharable with other major providers. For some parts of the market, such as standalone Advice Websites, consuming APIs is a competitive advantage over more manual competitors. But for League Hosts and Consolidated Management Tools, Providing and Consuming APIs is the cost for entry.

Parallels in Other Markets

Applications of these roles to other markets is limited only by the imagination, but here are a few that occur to me.

Fantasy Football: League Host (primary), Advice Website, Consolidated Management Tool

Personal Finance: Bank (primary), Retirement Calculator, Monthly Budgeting Tool

Travel: Travel Reservations Website (primary), Weather Website, Travel Points Tracker

Personal Fitness: Fitness Tracker Website (primary), Weight Loss Calculator, Personal Training Management Site

Credit: Thanks to https://fantasyfootballdatapros.com for the idea to use Fantasy Football as a learning medium.