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Volume 21 No. 31
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A comeback for XFL, but can it win?

Financing, ability to exploit NFL soft spots will be key

Here comes Vince McMahon, confidently whistling past the football acronym graveyard. It’s a crowded plot, with well-known names like the XFL and USFL standing alongside lesser-known names like the UFL, AAFL and FXFL. They all tried and failed to launch a football league that resides in the NFL’s multibillion-dollar shadow.

Like his predecessors before him, including a younger version of himself, McMahon believes he now has the right plan and his sequel, XFL 2.0, will be far more successful than the original, a joint venture with NBC that shuttered after one flashy 2001 season.

He senses the time, place and football’s standing in pop culture are drastically different than they were in 2001 and that fuels him with reasons to believe.

“It’s an opportunity to really reimagine football — not reinvent it, but reimagine football,” McMahon said. “It’s that reimagination that’s really enticing in terms of creating something that the marketplace would want these days.”

A number of factors have changed in the 17 years since the XFL’s one and only season: a dynamic yet fragmented media landscape has taken hold; the need for a developmental league has grown; dents in the once impregnable NFL have shown; and lessons learned from the XFL’s implosion have been learned.

The XFL’s fast and furious first try

2000

March 29
The WWE announces plans to launch a new pro football league, the XFL, in spring 2001 as the brainchild of Chairman Vince McMahon. The league would attempt to distinguish itself with gimmicks such as pyrotechnics, cameras and microphones in the huddle, and rules such as no fair catches.

March 29
■ NBC and the WWE announce a partnership to jointly own and run the XFL, with each party owning 50 percent of the league and its eight teams.

May 19
■ UPN signs a television deal to air 10 regular-season games and one playoff game.

June 13
■ Chicago is awarded the league’s first official franchise. The league would eventually place teams in Birmingham, Ala.; Las Vegas; Los Angeles; Memphis; New York/New Jersey; Orlando; and San Francisco.

Oct. 28-30
■ The XFL draft takes place with 475 players selected. A Dec. 29 supplemental draft would involve an additional 65 players.

Nov. 16
■ Minnesota Gov. Jesse Ventura is named an analyst along with Matt Vasgersian as play-by-play announcer for NBC’s broadcasts.

Nov. 29
■ The XFL and TNN announce a deal for the network to broadcast nine games on Sunday afternoons.

2001

Feb. 3
■ The XFL’s opening game between the New York/New Jersey Hitmen and the Las Vegas Outlaws is held at Sam Boyd Stadium in Las Vegas. Players are allowed to use nicknames on their jerseys, with Rod Smart generating heavy buzz for his “He Hate Me” moniker.

Feb. 3
■ NBC’s inaugural broadcast earns a 9.5 Nielsen rating. NBC’s second week coverage would deliver a 4.6, down 52 percent from its debut. A week 10 broadcast would drop to a season-low 1.5 rating.

Feb. 21
■ Honda pulls its ads from XFL telecasts.

April 18
■ McMahon states that the XFL will be back next season, only its games will not be televised by NBC.

April 21
■ The season concludes with the XFL Championship, “The Million Dollar Game,” between the Los Angeles Xtreme and San Francisco Demons.

May 10
■ WWE Entertainment and NBC announce they will discontinue the league.

Can this version of the XFL really work where so many others have failed? McMahon surprised many in sports business last week when he unveiled his plan to launch a fan-friendly, wholesome football experience by 2020.

With players that can’t make NFL rosters, will the quality of play be worthy of attention? With March Madness, the start of the NASCAR season and the NBA and NHL regular seasons, can a startup cut through the clutter of today’s crowded sports marketplace? Are there really eight viable cities and facilities willing — and able — to host XFL franchises? Most importantly, is McMahon’s $100 million personal investment in the eight-team league enough? Already, his plan has brought out skeptics.

“In the first year of the UFL we had team budgets of $15 million [each] and that was tough to do,” said Frank Vuono, the longtime sports marketing executive who advised the ill-fated four-team UFL in 2009.

Even with McMahon’s startup funding of $100 million, Vuono laughed and said, “It’s going to need investors.” He said the UFL perished because the main investor, financier Bill Hambrecht, stopped funding it.

McMahon said he is not looking to take on additional investors, at least not initially. In 2000, NBC stepped up as a partner in the league — a partnership that was not always smooth. For example, at the end of its first and only season, NBC Sports Chairman Dick Ebersol had to convince McMahon to close up shop. NBC was on the hook to fund one more season, and McMahon initially wanted to keep the league running.

“Gently over a little time, Dick got Vince finally to agree that it wasn’t gonna work,” former NBC executive Ken Schanzer said in ESPN’s documentary on the XFL. “And Vince ultimately, and reluctantly said, OK.”

In an interview earlier this month, McMahon acknowledged that he could spend more than $100 million through his holding company, Alpha Entertainment. McMahon’s personal wealth was recently estimated by Forbes at $1.63 billion. “Going to start with $100 million, and it probably will go beyond that,” he said. “There will be plenty of capital to do what we want to do.”

In fact, $100 million appears to be the minimum for launching a league like this.

Former MSG executive Michael Lardner, who is hoping to get the much less-vaunted Spring League of American Football off the ground in either 2019 or 2020, said he needed to raise that same sum for his project. He said he is close to raising several million dollars to go forward with an eight-franchise league composed of teams featuring former college players from specific conferences. Imagine games where former SEC players take on ACC former players.

“Because there have been so many failures, everyone is a little skeptical,” Lardner said.

Bob Caporale, an owner in the USFL in the 1980s, is helping start a football league this year where fans call the plays. He said, hypothetically, that while $100 million is a good start, it would vanish quickly.

Outside of financing, the prevailing view is that a new football league has a good chance to gain traction for two reasons: Football remains the country’s most popular sport by far. And the powerful NFL needs to set up a minor league to help develop players. The NFL lost its development league in 2007 when it shuttered NFL Europe. There’s a prevailing view in league offices that players are not fully prepared for life in the NFL, especially considering a collective-bargaining agreement that limits practice time.

So you want to start a pro football league?

World Football League (1974-75): Led by Gary Davidson, who helped create the American Basketball Association and World Hockey Association, the league boasted high-profile NFL alums such as Ken Stabler and Larry Csonka. Its ability to lure players led to the demise of two other short-lived leagues — the Atlantic Coast Football League and Seaboard Football League.

USFL (1983-85): The startup crashed after it left its spring season for the fall and sued the NFL. The USFL was awarded only $3 in damages in that antitrust case, and folded.

Regional Football League (1999): The six-team spring developmental league struggled to play an eight-game regular season and lost more than $6 million during its only season.

AF2 (1999-2009): A total of 60 mostly small or mid-sized markets hosted teams in what was a feeder league for the Arena Football League. The death knell sounded when the AFL canceled its 2009 season. Three former af2 clubs still exist in other leagues.

XFL (2001): WWE and NBC attracted an impressive roster of sponsors, and started off with respectable attendance in eight markets, but the success was short-lived and the league folded after one season.

All American Football League (2008): The concept was to play in college stadiums featuring alumni players. The league had a $30 million shortfall before its scheduled 2008 debut and never got off the ground.

World Football League (2008-10): The second iteration of this league consisted of six teams. The Oklahoma Thunder moved to, and still plays in, the Gridiron Developmental Football League.

United Football League (2009-12): Positioned as a feeder league for the NFL, the UFL lost an estimated $120 million in its first three years. Carolina Panthers kicker Graham Gano is believed to be the only UFL alumni still in the NFL.

Fall Experimental Football League (2014-15): Five teams played a total of 13 games over two short seasons.

Major League Football (2016-TBD): The proposed eight-team league canceled its inaugural 2016 season after an investor failed to follow through on a $20 million financing deal. Negotiations with investors continue with hopes to start playing in 2018.

Source: SportsBusiness Journal research

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A feeder or developmental league could help that. “If your strategy is, like we did back in the first year of the USFL, to not compete with the NFL but just the opposite, to thrive because of how well the NFL did and then play in a different season, then it can succeed,” Caporale said.

McMahon didn’t offer specifics on a possible player pool or even the quality of play in the XFL, and it’s unclear if he will stay content with the league being labeled as a minor league, which seems unlikely given his high profile. But he did say that his league initially would target players cut by NFL teams. “The difference between making it in the NFL and not is slight,” he said.

For now, McMahon has adopted a kinder, gentler tone than he did in 2001, when he clearly positioned the XFL as the anti-NFL and relished in taking shots at what he dubbed at the time the “No Fun League.”

“We are not in competition with the NFL,” said McMahon, who insists he won’t criticize the NFL or even talk about it — essentially treating the name of America’s top sport the way Harry Potter handled the evil wizard Voldemort: refusing to even mention the moniker. “It’s not so much we are better or we are this or we are that, I just want to create our brand of football, I want to create a fan-friendly, family-friendly type of football that moves faster; much faster. … Sitting in front of a television three and half hours for a game is a lot of time to devote.”

What an XFL game will look like though is far from clear, despite all of McMahon’s talk of reimagining the sport. He promised to poll fans through social media and focus groups. He also stressed that he would talk regularly with football experts and the media to shed his game of NFL rules that some fans find so onerous.

He laid out several criteria that he is certain to use: The XFL will not use any player that has a criminal background. It will not allow its players to make political statements during games. And he promises that XFL games will be shorter than three and a half hours. Those are all areas that many see opportunity with the NFL’s embrace of social activism and problems with players running afoul of the law.

While McMahon stresses that the XFL will not compete with the NFL, such comparisons are inevitable. Perhaps the XFL will draw a sliver of fans who reject the NFL for these reasons. But the NFL is still far and away the top-rated entertainment on TV.

“Success doesn’t depend on the weakness of the NFL,” Vuono said. “There is a lot of talent that doesn’t end up playing in the NFL.”