The History of Fantasy Sports: The birth (and sale) of Commissioner.com

Fantasy sports have become as ingrained in American culture as baseball and apple pie. And they have spread worldwide. But the millions who play mostly have no idea about the people and events that created this phenomenon. In his new book, The History of Fantasy Sports: And the Stories of the People Who Made It Happen, Amazon bestselling author Larry Schechter provides a complete telling of how we got from the spontaneous ideas for games years ago to the multi-billion-dollar industry of today.

Schechter spent 18 months researching and interviewing dozens of key players to uncover their stories. This reader-friendly book is ready to take its place alongside some of the best in sports history. You will be entertained and inspired by these stories of humble beginnings turned multi-million-dollar enterprises. Schechter does a great job of capturing the passion, obsession, and love of the game behind these businesses.

The book is available on Amazon and Barnes & Noble (paperback and eBook). The following excerpt is from Chapter 10, about the early commissioner services:

Commissioner.COM

Peter Pezaris, Michael Gersh, James Price, and Scott Harger were fraternity brothers who had graduated from Carnegie Mellon University, and later all got jobs in Manhattan. One night in August 1995, they were at a local bar talking about what they would do if they had as much money as Bill Gates. They realized instead of just talking about it, they should do it. So that night they decided to start a business while keeping their day jobs. They called it Daedalus Worldwide Corporation.

They created an online restaurant guide that wasn’t successful. Next came a Java-based billing system. Didn’t work, either. By then, more than a year had passed. A fifth partner, attorney Matt Fortnow, had joined them. During this year, they also consulted and built websites for anyone who wanted to have an online presence. A fantasy baseball player contacted them to build a website that would make it easier for him to share the standings with league mates. He said he would still calculate results himself.

Pezaris had played one year of fantasy football and asked his commissioner how long he spent doing everything. The commissioner said it took him about eight hours per week. So Pezaris and his buddies thought, “What if we do all that work for the commissioner? Owners can set their own lineups rather than having to call the commissioner. We can calculate the stats and put up the standings. And this can all be done online.”

The five partners planned all this in one night, November 25, 1996. After a year of failed attempts, they were feeling virtually certain this would work. It would be a valuable commodity to offer fantasy players. At the time, there were already fantasy stat services that charged about $300 per season. The partners decided to also charge $300 per season, but they would make it much better than what was currently available, and it would be the first online.

They assumed they had a few months to prepare before the baseball season, but two days later learned the back page of Fantasy Sports magazine — the largest circulating fantasy magazine — was available. Although they had just gotten the idea, and hadn’t written a line of code, they were so confident… they took it. Not only that, but the ad needed to be submitted in 24 hours. They had to create the name of the company, artwork, and ad copy. They designed the ad stating they would update stats daily — they accepted American Express, Visa and Mastercard — and promised other things they hadn’t set up yet.

With each contributing $2,000, they had a total budget of $10,000. This ad cost $5,400. Then they put an ad on Yahoo, which was the dominant search engine at the time. For $1,500, anytime someone typed in “fantasy baseball” their ad would come up. They grabbed it. But this ad started January 1, meaning they only had one month to build everything.

They launched Commissioner.COM as the ball dropped in Times Square to ring in 1997. To accomplish this in just one month, Pezaris — while still working his day job at Banker’s Trust — slept only one hour a night. Pezaris said, “This sounds like hyperbole, but it isn’t—I worked all day, every day, about 23 hours. Once we launched, I allowed myself three hours of sleep a night, because we had to get ready for the baseball season.”

The first week that the Yahoo ad came out only brought two visitors to their website. But there was a day in late February when they sold five leagues, and that’s when Pezaris became confident they would succeed. Soon after that, Pezaris was walking to his desk at Banker’s Trust one day and collapsed, just from sheer exhaustion. He said, “It was a struggle for me to get up and get back to my desk, and that’s when I knew I couldn’t do this anymore.”

Gersh, who had also been working extreme hours, suggested Pezaris go to the bathroom at work and take a power nap. Pezaris tried this. He sat in a stall, leaning his head against the toilet paper holder. After a 20-minute nap, he felt great. He went to the sink to wash his hands, and saw in the mirror, imprinted in his forehead “If roll is empty, slide cover to right.” Knowing he couldn’t keep doing this, and confident after having gotten five sales in one day, he gave his boss two weeks’ notice.

Many tried to talk him out of it. His mom couldn’t believe his “crazy decision” to quit his high-paying job for a start-up with no money and no investors. And it was incredibly risky. Pezaris couldn’t afford to pay his rent if he quit his job. The partners made a deal: James Price would keep working and would pay to rent an office. Gersh and Pezaris would quit their jobs, give up their apartments and move into the office. And Price gave them each $1,000 per month to live on.   

Pezaris was the software developer while Gersh handled business aspects such as vendors and marketing. The office was in a building that probably should have been condemned. There was no heat, no hot water. Every day, they each took a 30-second freezing-cold shower. They slept next to their computers as it was the only source of heat, sometimes being woken up by a mouse scurrying across their face. They ate 99-cent Whoppers to make their $1,000-per-month stipend work.

But it paid off. That first baseball season, there were 200 paid customers, at $300 each. And then 100 subscribers for football. The following year, baseball increased to 800 leagues. Whatever requests were made by customers, they built. This set them apart from competitors such as ESPN and SportsLine, who only had one set of rules that people could play. They were able to move to a new office that was small, but in good condition.

Pezaris had quit his day job to get more sleep, but that didn’t happen. “It was three hours of sleep a night for the first three years of Commissioner.COM—and no weekends off,” he said. He had no social life and only took a day off for Christmas.

During the second year, Harger left the company, but another friend from Carnegie Mellon, David Hersh, joined them. During that second year, they realized the big companies such as ESPN and SportsLine — despite having inferior software — would be able to dominate the industry due to their ability to get huge advertising. They decided to try and get a partnership with someone big. They contacted all the major networks and sports sites. CBS SportsLine was the only one to respond with any interest.

Rick Wolf was the SportsLine GM of fantasy sports then, and explains, “One day Gersh sent me a note basically telling me how bad our commissioner stinks and how we need his. We looked and realized he was right.”

Commissioner.COM allowed users to create a new league — complete with its own website, chat room, and news ticker — in just a few minutes. The program would automatically update each team’s statistics, e-mail them to each owner, and post them on the league’s unique website. Leagues could be customized to adapt to any set of league rules and included unique features such as a scrolling news ticker. Leagues could also conduct their entire draft live online.

Wolf came to their office for a meeting. SportsLine.com was about to relaunch their website with a new look and feel. Wolf showed them a sneak peak of what it was going to look like. When Wolf and Gersh went into a conference room to talk, Pezaris changed the design of Commissioner.COM to make it look like the new SportsLine. When Wolf came back out, Pezaris showed him and Wolf asked, “How’d you get access to SportsLine?” Pezaris said, “No, this is Commissioner.COM. This is what it would look like if we did a deal. We could make it look like this.” Wolf was impressed.

They created a partnership. Starting with the 1998 fantasy football season, CBS SportsLine Commissioner.COM was born. They used the Commissioner.COM software over the SportsLine infrastructure. Their deal called for the price to drop from $300 to $100 per league. And there was a revenue share on subscriptions and advertising income. (Commissioner.COM had never had advertising on their own website.)  With the added exposure from SportsLine, their second year of football brought in about 1,000 leagues.

The following year, they dropped the $100 charge, made it free, and it exploded. They had 10,000 football leagues. It became the dominant business for CBSSportsline.com. One month, their check was for $500,000, at which point SportsLine wanted to buy them. On December 7, 1999, CBSSportsline.com bought Commissioner.COM for $46 million. It was a life-changing moment. Pezaris said, “When I checked my bank balance that day, I half expected to see $12, or whatever, in my checking account. But there were a lot of zeros. It was the most surreal thing.”

(Anda Chu/Bay Area News Group/Tribune News Service via Getty Images)