Daniel Sutter: Innovation and new football jobs

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With football season in full swing, we should recognize some new ways that people can earn a living from football. The new jobs are made possible by the tens of millions of Americans who enjoy college and pro football, and the jobs do not require the athletic ability to play the game.

Passionate college football fans like to follow their favorite teams year-round. Recruiting high school players is integral to the success of college teams, and highly ranked recruiting classes often predict future victories. Consequently hard core fans will want news about top high school players, their campus visits, and where they might go.

Several national services have emerged to supply this news, both directly to fans and through partnerships with sports networks. The best known services are Rivals.com and Scout.com, which each operate networks of around 300 recruiting experts across the country. Rivals was established in 1998 and sold to Yahoo in 2007 for an estimated $100 million, indicating the profitability of recruiting news.

Fantasy football allows NFL fans to enjoy the game even more. Over forty million Americans play, most in leagues with friends or coworkers. Many take the competition seriously enough to pay for analysis and advice. The Fantasy Sports Trade Association estimates that fantasy football products had $1.67 billion in sales in 2012. This allows fantasy experts to sell their services, either directly to players, or by providing content for websites hosting leagues.

One day leagues offered by websites like FanDuel and DraftKings provide a new dimension. These tournaments involve play for cash among players who do not know each other. Scaling up participation allows for top prizes of $1 million or more each week. The Unlawful Internet Gambling Enforcement Act of 2006 classified fantasy sports as games of skill and thus legal, allowing this business to take off. Cash play further increases demand for experts’ knowledge and allows use of this expertise for large pay days. FanDuel and DraftKings have been caught up in “insider trading” allegations in the past several weeks, which may or may not slow their rapid growth.

Technology and economics have enabled these new opportunities. The most significant has been the internet. College football magazines pre-date the internet, but today we have access to more information, more quickly, and at a lower cost. Experts’ websites allow them to aggregate modest amounts of money and attention (which translates into advertising revenue) from hundreds of people to earn a living. Websites able to host leagues have tremendously reduced the cost to friends of organizing a league, which previously involved recording statistics and making calculations by hand.

The emergence of hundreds of TV channels with cable and satellite has led to narrowcasting and specialty networks. The first and most famous sports network is ESPN, but college conferences like the SEC and Big Ten now have their own networks. Specialized networks increase the audience for detailed recruiting news. NFL Sunday Ticket allows fantasy players to watch their NFL players in action. Sports radio allows experts to showcase their knowledge and direct listeners to their websites. Podcasts and YouTube allow experts to broadcast content to potential customers.

A rising standard of living helps fans and fantasy players, many of whom are upper middle class, pay for specialized information. They will pay a $50 annual subscription fee to dominate their league or be the first to know that their alma mater just landed a star recruit. A prosperous economy also helps stake the experts in business.

Providing information about a game might strike some people as frivolous and economically insignificant. Yet all goods and services have value because people are willing to exchange their money for them. Most value in our economy comes from activities which enrich and not just sustain our lives, so the value creation here is real.

Jobs like college football recruiting guru or fantasy football advisor allowing die-hard fans to earn a living from their obsession might seem too good to be true. Americans have been enjoying football for decades, with top players earning millions. Innovation continues to grow this enjoyment, and now people who could not even play in high school can earn a living from football.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision.

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