Football season has begun, with fans eagerly devoting Sundays (and Mondays and Thursdays) to watching their teams battle for a chance to reach the Super Bowl. How does Tom Brady’s suspension impact the AFC East? Will Peyton Manning’s retirement impact the AFC West? Who will be the breakout rookie of the year?
In the last decade, the rise of fantasy football has changed the way fans watch football. According to the Fantasy Sports Trade Association, an estimate 57.4 million fans play in fantasy sports in 2016. These fans scour the news each day, searching for predictions, rankings and expert analysis of the 1696 NFL players and 32 teams battling each week.
Fantasy football’s growing popularity is the result of easy access to real-time information and abundant analysis for amateur coaches to use. Each week, fantasy coaches evaluate team matchups and player rankings to make the best choices for the week.
In some ways, fantasy football is like commodity trading.
- Real time information is essential. Commodity traders need to know when market prices change immediately to protect profits. Amateur coaches need to know immediately if a player is unable to play so they can switch players.
- Risk assessment is critical. Commodity traders need to identify potential exposures quickly to maintain profits. Fantasy football coaches need to evaluate the risk of playing a great player that has a minor injury. Will he play the whole game? Would the second choice player do better?
- Advanced analytics help make good decisions. Traders cannot collect real-time information about trading, transportation and logistics, processing, marketing, and hedging and analyze it in an Excel spreadsheet in a timely way. Amateur football coaches cannot evaluate every matchup for their 16 players without relying on online ranking programs such as ESPN’s fantasy football site.
- Customized programs provide the analysis needed. Commodity traders need solutions developed specifically for commodity trading and risk management. They cannot rely on ERP or generic BI solutions that were not developed for the complexities of commodity trading. Amateur coaches cannot just watch an evaluation of the week’s games to choose which players to play. Team matchups – Giants versus Vikings – are not the same as evaluating Eli Manning’s chances against the Vikings’ defense. A quarterback can score a lot of fantasy points and still lose the real-world game.
Fantasy football is a game, but according to Forbes it is also a $40 billion+ industry. Easy access to information and detailed weekly analyses are driving this exploding market. At over $40 billion, fantasy football revenue pales in comparison to the size of the global commodity market. Royal Dutch Shell alone is a $272 billion company, and it is just one company trading in one commodity market. The financial impact of companies using smart commodity management with real-time data and advanced analytics is tremendous.