"One thing that has always intrigued me in sports management is the balance between competition and cooperation," said Karl W. Einolf, dean of Mount St. Mary's Richard J. Bolte, Sr. School of Business. "The league unites to sell a product, but each franchise is competing for both wins and profits. I wanted to capture that idea in the class ... and I thought it would be cool to use fantasy as a hook."
NOT SO FANTASY, AFTER ALL
Einolf -- who has studied sports economics and focuses on the role of the franchise market -- first came up with the idea of the fantasy league 13 years ago while teaching a sports business class. He had been involved in a fantasy league, one that required checking the newspaper box scores on Monday morning to add up points, and realized he could use it to explain the unique sports business structure.
Nationally, some 32 million people will play fantasy sports in 2012, according to the Fantasy Sports Trade Association. The estimated $800 million business allows fans to assemble teams with real players, then compete based on their real-life performance.
But EconFantasy a requires more than just obsessive game watching and horsetrading. The most successful managers need business acumen. In the popular class, students break into 12 teams and are randomly assigned a real-life market, ranging from tiny Kansas City and Cincinnati to the massive New York City. They then work together to establish a league constitution, complete with revenue sharing (a cooperative agreement can make all franchises profitable), splitting broadcast revenue (teams can opt to pool the money or go it alone), a salary cap system and other business elements.
The managers even have to be prepared to deal with labor unrest. Einolf said that he's introduced player strikes in response to low salaries to see how managers respond on the fly.
From there, teams play like a normal league -- there's a two-day auction where owners fill out 14-player rosters (rather than paying a flat fee from a budget, as in a traditional auction, teams in EconFantasy bid on salaries starting with a minimum $500,000). Teams pair up each week and compete as usual, although they also get information on attendance and revenue. At the end of the season, eight teams make the playoffs, with trophies for the winner and the best-run franchise (the four last-place teams compete in the league's "Toilet Bowl" for a four-pack of Charmin toilet paper).
The idea, Einolf said, is to give a taste of what it really takes to run a franchise. Good teams will bring in more sponsorship money. Struggling teams will have to deal with plummeting attendance, especially in small cities with fewer fans. Away teams have to budget for travel costs, while home teams have to negotiate a fair way to split the gate. Teams losing out on broadcast revenue may have to jack up concession prices to meet their budget, while successful ones may have money to throw around for pricey free agents.