USA Today to Launch Daily Fantasy Sports Gaming Site

With daily fantasy sports surging to new levels of popularity and visibility, another large publisher is throwing its hat into the ring. On Tuesday, USA Today plans to introduce Fantasy Score, a fantasy sports gaming site focused on daily tournament-style games, and to rebrand its longtime fantasy news wire KFFL as USA Today Fantasy Sports. Players will initially be able to compete in daily fantasy football games, according to Mark Pesavento, vice president of innovation at the USA Today Sports Media Group. In the coming months, fantasy games involving the NBA, the NHL and MLB will become available as well, he said. Initially, Fantasy Score will earn revenue from selling display ads and so-called native advertising, sponsorships sold for its free games, and game management fees. Once a certain scale is achieved, a series of branded events and tournaments will likely be rolled out as well, Mr. Pesavento said. Fantasy sports has been growing like a weed over the past decade, with year-over-year growth of more than 11% over the past five years, according to market research firm IBISworld. Forty-one million people will play some form of fantasy sports in 2014, according to the Fantasy Sports Trade Association. Yet the vast majority of those players -- 78% of them, according to research conducted by Ipsos last year -- play what are known as commissioner-style games, in which players create fantasy rosters comprised of real-life athletes, then ride those rosters out over the course of that real sport's regular season, usually making trades along the way. Companies like ESPN, CBS and Yahoo dominate the commissioner-style game space. Though none of the companies detail fantasy revenue or player totals, their operations are large enough to have secured partnerships with large brands like Toyota, Snickers and Volkswagen and to offer million-dollar payouts on annual tournaments. Daily fantasy, by contrast, offers players the opportunity to build up teams and pit them against competitors over much smaller timeframes. The shorter commitment makes daily gaming more attractive to newer, more casual fantasy players. "That screams opportunity," Mr. Pesavento said. USA Today is not the first company to have identified it. The daily fantasy sports market is already deeply competitive, with a handful of entrenched, well-capitalized players dominating its landscape. FanDuel, which launched in 2009, controls more than 65% of the market, and is expected to generate more than $40 million in revenue in 2014. Earlier this summer, DraftStreet, the third-largest daily fantasy sports player in the U.S., was acquired by DraftKings, the second-largest. In addition, a newly launched Sports Illustrated-owned app called Fan Nation (reported by Ad Age back in June) also offers daily play. Yet Mr. Pesavento is betting that the daily fantasy sports pie is going to keep growing, and that Fantasy Score will be able to take the largest slices thanks to the deep network of sites USA Today can leverage to present it. FantasyScore will be promoted on all of USA Today Sports, both in print and across its network of digital sports properties, which includes sites like The Big Lead and HoopsHype. Mr. Pesavento said USA Today's network of local newspaper and television assets will be leveraged as well. "We are going to be pulling all levers," he said. He may have a limited window in which to do so. Earlier this month, Gannett announced it would be spinning USA Today off from its television and digital properties. No formal announcements have been made about where Fantasy Score's parent, USA Today Sports Media Group, will land, but there is a possibility that the site will not be able to rely on some parts of Gannett's broadcasting or publishing network to grow its audience. USA Today Sports Media Group also recently withdrew its 50% stake in Sports on Earth. Even in the wake of the spinoff, Mr. Pesavento said the success of Fantasy Score will hinge on attracting new players and a mainstream audience that trusts the USA Today brand. "Our goal is not to steal customers from FanDuel or DraftKings," Mr. Pesavento said. "I actually feel somewhat indebted to those guys for marketing this game and raising the tide for all boats. "As people understand what this game is, those guys will be well positioned," he continued. "I think we're better positioned."

USA Today to Launch Daily Fantasy Sports Gaming Site

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