RecapWhat an exciting finish that was, with Spieth going wire to wire! For DraftKings, you went from having just 1% of getting 6/6 through at the U.S. Open to having close 30% of having 6/6 through fo... Read More
If anyone doubts the upside or staying power of DFS golf, they only need to look at how much golf has grown from last season to the current one. For each of the four majors last year, DraftKings offered a $100K guarantee, for which the buy-in was $27. That was their “big" tournament. This week, for the QUICKEN LOANS NATIONAL, DraftKings is offering a 350,000 guarantee with a $3 buy in. This comes on the heels of the third installment of DraftKings Millionaire Maker, a $3.3 million dollar guaranteed tournament with a million dollars being awarded to 1st place. Let's recap, in relation to DraftKings biggest tournaments of 2014, tournaments with 1/9 of the buy-in and three and a half times the prize pool is being run almost every week. And a tournament with 33 TIMES the prize pool is being held for each of the four majors. There will never be a growth that matches what golf did this year, not in any sport in any year.
When you think about it, it is perfectly logical though. Golf offers a much smaller pool of players. It allows for four days of splendid televised sweating, and due to the unique scoring system, the difference between first and second place—or in instances 50th place—many times comes down the last hole. It is pressure packed, yet also very easy to learn and play at a recreational level. On top of that, golf fans hold the distinction of having the highest household income of all major sports. While that may be bad for people taking up the sport, it is a great thing for DFS operators and players alike. DFS golf players can expect prize pools to continue to rise throughout the 2016 season. Golf has not even come close to reaching its peak, and when DFS operators begin to branch out to the rest of the world, Golf and Soccer will be the biggest beneficiaries.
Golf used to be seen as a way for DFS operators to poach new users, get them on board and instill brand loyalty, and then hope to hell they stick around for football, basketball and baseball. With as much exposure and media coverage that DFS golf has received this year, those days are over, and there is no question that golf is here to stay.
At some point last golf season, I remember thinking to myself “I wish more people would get into DFS Golf, it has the potential to be huge". Ask and you shall receive.
As one of the big two, DraftKings (FanDuel being the other) had been faced with an uphill battle with respect to catching up to FanDuel in terms of prize pools and users. They had done an admirable job growing their user base, but at the time, DFS was just starting to hit the mainstream. Fast forward 18 months, three merger/acquisitions, $500 million in funding and three Millionaire Makers, we sit at the nexus of DraftKings bid for world domination. Whether you want to attribute their meteoric rise to strategic marketing partnerships or the ability to continuously offer bigger guaranteed tournaments, there is no doubt that DraftKings has become a force to be reckoned with.
Having recently entered the DFS space, Yahoo holds a distinct advantage over anyone else attempting to get into the DFS industry so late in the game. They have users, a lot of users. The biggest barrier to entry in the DFS industry is the millions of dollars—if not tens of millions of dollars—it requires to build a big enough user base to eventually be profitable. Don't let the billion dollar valuations fool you, with an average profit margin of 10%, DFS companies are not the most-wise investment. Both FanDuel and DraftKings have yet to turn a profit, despite owning 90% of the DFS industry between them. With ESPN choosing to back DraftKings via a large investment that doubled as an advertising agreement, Yahoo is left with roughly 35% of the fantasy market at their disposal. And it is not just fantasy sports enthusiasts that they can market to. Yahoo is the third largest retailer of online advertisements, behind the behemoth companies of Google and Facebook. DraftKings had to sink $500 million into an advertising with ESPN, and a large portion of that will go towards television. Digital ads offer a much high conversion rate for DFS companies, so Yahoo has already checked off the biggest hurdle on their list.
So where does that leave DFS Golf? Well, for the players, it is a very good thing. Victiv and FantasyAces have both unveiled DFS golf products this year, but neither have the capital to really make a run at DraftKings. With that in mind, if DraftKings was the only game in town, it would be hard pressed for users to expect incentives, especially as the DFS player pool becomes more and more saturated and core strategies shift from marketing to user-experience. While Yahoo has made no public plans for entering the DFS golf market, they will soon be faced with the reality that golf is their biggest and best opportunity to slice out a piece of the DFS pizza pie. They are #1 in terms of providing leagues for fantasy golf, so it is a no-brainer for them to start marketing to the core audience of DFS golf enthusiasts. Either way, another major player that has the ability to offer large guaranteed prizepools, is only a good thing for players.
With this past Monday being the 22nd birthday of golf sensation Jordan Spieth's life, a hot topic around the golf world is the comparison with him and active G.O.A.T, Eldrick Tiger Woods. Both have accomplishments before their 22nd birthdays that most golfers would be happy with over an entire career. The fact that were even comparing Spieth to Woods is an enormous feat in itself, as for most of us, Tiger Woods' early career dominance is unmatched in the sport. I'm 29 years old, and besides Roger Federers' exploits on the tennis court, Woods is the most dominant athlete my eyes have witnessed. What Tiger has turned into the last couple years is hard for myself, and many others to watch, but that doesn't take away from the freight train he was in the late 90's and early 2000's. I'm going to make the case for both golfers and hopefully come to a concise verdict at the end.
The Case for Jordan Spieth
After a successful campaign in 2014 for Spieth that included some success in a couple majors, he has firmly supplanted himself, with Rory McIlroy, as one of the games best young players. It's only natural to start comparing him to some of the all time greats after he took down the Masters and US Open before his 22nd birthday. One area where Spieth actually has Tiger walloped at age 22 is career earnings, and for that, Spieth has Woods to thank. His career on-course earnings to date are 17.4 million dollars! It's insane to try and think how much money he will make over the course of his playing career, but it will be well over 100 million when it's all said and done. In comparison, Tiger had taken home 2.7 million in on-course earnings by his 22nd birthday. The time in between has seen tournament purses and PGA popularity skyrocket, with most credit going to Tiger. Both were ranked #2 in the world, with Woods only 1 point behind then no. 1, Greg Norman. I will give Spieth a slight nod for what he's done against stiffer competition, as Tiger was so far in front talent wise than the golfers he was competing against, and the gap isn't as wide for Spieth right now. Finally, Spieth has a two to one lead in majors on their 22nd birthdays, with his Masters and US Open triumphs earlier this year.
The Case for Tiger Woods
Woods didn't turn pro until the end of 1996, amassing a longer, and much more decorated career as an amateur. I'm going to start there while making my case for Tiger, because what he did as an amateur might never be done again. Before turning pro, he won three straight US Junior Amateur Championships, and is still to this day the only three time winner. He followed that up by attending the University of Stanford and winning three straight US Amateur Championships, becoming the first person ever to accomplish that. By this time, he was already becoming a household name and being touted the games next big thing. Once he turned pro, he won six times, including the Masters, in his first 29 starts on Tour. This is where he really separated himself from Spieth at the same age. Spieth has won five times, including two majors, which is very impressive, but it's taken him 69 professional starts compared to Tigers 29.
I came to the same verdict I had before diving into all the information. Tiger Woods' reign in the late 90's and early 2000's is unmatched at this point, but what Spieth is doing in 2015 makes me think he could change that narrative in the next few years. To do that, he will need to continue winning, and contending in majors, while also racking up wins in other events. I have a feeling this is something we will be doing every year on Spieths' birthday, and just maybe he will start separating himself from the legendary Tiger Woods.