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Volume 22 No. 7

Leagues and Governing Bodies

Editor’s note: This story is revised from the print edition.

Falcons owner Arthur Blank will step down as chairman of the committee next year.
Photo: Getty Images

Atlanta Falcons owner Arthur Blank will step down in May from his chairmanship of the league’s compensation committee after a tumultuous eight-year reign, his spokesman said. He is leaving the committee entirely at that point.

 

From then on, a new member will take a one-year term as chairman until also leaving, according to an NFL source who added that new members will be voted on by all owners.

 

In 2017 Blank oversaw the new contract for NFL Commissioner Roger Goodell, which led to threats of a lawsuit from Dallas Cowboys owner Jerry Jones and great debate among owners over transparency among the committees. Goodell signed a five-year deal worth roughly $30 million annually, while the league later fined Jones for his legal threats.

 

The new approach to the compensation committee, agreed to by members, is on this week’s NFL owners’ agenda.

 

The compensation committee has been the focus of some unusual developments recently. Last May the owners — not Goodell, who typically appoints committee members — agreed to rotate the Chiefs’ Clark Hunt and the now-late Bob McNair of the Houston Texans off the compensation committee. The newly structured committee, under terms of the May 2018 agreement, was then to have its five members vote on a chairman and a vice chairman, both on two-year terms. No other committee has a vice chairman.

 

But the committee itself scuttled that deal with the new approach of cycling an owner off every year and having him or her be chairman in the last year. It’s unclear who that will be starting in May 2019. The second in line to come off the committee will be a vice chairman who will then become the chairman the following year, a source said. The committee members picked names out of a hat to set their year of leaving, the NFL source said.

 

Jones has been pushing for new corporate governance measures, such as term limits for committee chairmen and deliberations being made available to all owners before issues come up for a vote. The plan for the compensation committee had been seen as a concession to Jones.

 

The Cowboys declined to comment.

 

At the league’s fall meeting in October, Cleveland Browns owner Jimmy Haslam was voted onto the committee as the fifth member. In addition to Haslam and Blank, the other members of the compensation committee are the New England Patriots’ Robert Kraft, the New York Giants’ John Mara and the Pittsburgh Steelers’ Art Rooney. They are among the most powerful owners in the league.

Editor’s note: This story is revised from the print edition.

XFL Commissioner Oliver Luck and the eight cities that will be a part of the league at its launch have developed 2020 vision.

Standing in front of a scrum of reporters last week in the swanky Toyota Club at MetLife Stadium, XFL Commissioner Oliver Luck was asked if he had concerns about the rival Alliance for American Football launching in 2019, one year earlier than the XFL will begin. Luck’s reply was succinct and direct: “No.”

The reasons for Luck’s confidence were all around him in the ritzy room, and on the XFL branding that lit up the digital signs outside the stadium. Nearby was WWE Chairman Vince McMahon, who is committing up to $500 million for the league that is set to launch in February 2020.

Leaders from seven major cities — all of which have an existing NFL team — spoke at the event to announce the first eight markets for the revived league, which include Dallas, Houston, Los Angeles, New York, Seattle, St. Louis, Tampa and Washington, D.C. The teams will play in four current NFL stadiums (StubHub Center in Los Angeles; MetLife Stadium in New Jersey; CenturyLink Field in Seattle; and Raymond James Stadium in Tampa), a former NFL stadium (The Dome at America’s Center in St. Louis), an MLS stadium (Audi Field in Washington, D.C.), a college football stadium (TDECU Stadium in Houston) and even an MLB ballpark (Globe Life Park, the Texas Rangers’ home in Arlington). The Alliance, in comparison, will begin play in two months and will compete in mid-sized markets in mostly college stadiums.

That discrepancy indicates that the XFL is much better funded, opined Bob Caporale, chairman of sports advisory boutique Game Plan and a former owner of Boston’s USFL franchise in the early 1980s.

“It’s not only the [cost of the] lease but putting up players, and when you are in a big market there is all kind of additional cost — transportation, lodging, food,” he said. And, he added, lack of capital is what sunk so many previous startup football leagues.

The AAF declined to comment. A source close to the league said the plan is to spend $850 million over the next five years, and that fundraising is ongoing, though he did not say how much capital has been raised.

The XFL targeted NFL markets because its research suggested that fans in those areas were more passionate for football, Luck said. The XFL tapped McKinsey for the markets study.

Business is moving rapidly for the XFL. It plans to announce its broadcast agreement later this month and is interviewing head coaches and team presidents. Team logos and names should come soon, too.

By next quarter, each franchise will hire its starting quarterback, and will pay each up to $300,000 annually. That will give teams up to a year to market around the QB.

“We are planning to sign players in 2019 and work with them all through the calendar year, building franchises around these players along with their head coaches and their coaching staff,” Luck said.

Don’t expect a reboot of the original XFL, which lasted only a few months in 2001 and was a venture between WWE and NBC. The XFL is wholly owned by McMahon, but no crossover promotions are planned with WWE.

In addition, Luck has made it clear that the XFL will not become a developmental league for the NFL, explaining that doing so would diminish the XFL’s control over player allocation.

The management team of driver Chase Elliott is considering whether to handle the driver’s merchandise sales in-house.
Photo: Getty Images

NASCAR, its teams and tracks are going back to the era of having different merchandisers after an unsuccessful attempt at finding an industrywide solution to replace Fanatics.

 

Fanatics this year terminated its trackside deal with the NASCAR industry six years early (though it is keeping its NASCAR.com relationship), and executives in the sport have been scrambling to line up a replacement by the time the 2019 season begins at Daytona.

 

The Fanatics deal started in 2015 and brought most of the industry under the same vendor umbrella. Now NASCAR, teams and tracks are making individual decisions on who to partner with since striking another industrywide deal proved too complicated on such short notice.

 

On the league side, NASCAR will partner with SMI Properties, the merchandising subsidiary of track operator Speedway Motorsports Inc., to transport and operate its handful of haulers around the country for NASCAR’s 38-race schedule.

 

On the track side, International Speedway Corp. is partnering with MainGate to run merchandise operations at its 12 venues. SMI, which controls eight speedways, will of course continue using its SMI Properties subsidiary for its inside-the-gates operations, as it did during the Fanatics era. Legends was another company that had spoken with track operators about replacing Fanatics, sources say.

 

SMI Properties has pitched its services to teams and is likely to land with several, although others are expected to choose different vendors. Teams that share merchandise alliances, such as the arrangement between JR Motorsports and Hendrick Motorsports, may do joint deals.

 

“We were encouraged by the amount of world-class companies interested in partnering on a unified trackside licensing model,” Paul Sparrow, NASCAR’s managing director of licensing and consumer products, said in a prepared statement. “By the end of the process, NASCAR and the industry had multiple options to choose from and we collectively decided to move in a new direction.”

 

Sparrow added that SMI Properties’ “experience in motorsports and knowledge of our fan base set them apart from other suitors.”

 

ISC COO Joie Chitwood III praised what MainGate will bring to the track operator. The company has more than five decades of motorsports experience.

 

“As we look ahead to the 2019 season, MainGate will debut its footprint at Daytona and this holistic model will not only be familiar to our fans, but engage customers with a renewed energy that will only improve the at-track retail experience,” Chitwood said in a prepared statement.

 

While the 11th-hour scramble is likely to lead to some late nights for team executives over the next couple months, the situation is likely to be resolved enough by the start of the season that fans will notice no effect when they visit tracks.

 

“We’ve just hit the tip of the iceberg,” Joe Mattes, vice president of marketing and licensing of JR Motorsports, said of the work to replace Fanatics. “Each team had to explore different options and waited to see if there was going to be an industry solution or not. … We are so far behind now, the work in front of us is pretty monumental.”

 

In another scenario, the management team of Hendrick Motorsports driver Chase Elliott is said to be mulling the idea of handling his trackside merchandise sales in-house. Elliott has replaced Dale Earnhardt Jr. as both the sport’s most popular driver and, accordingly, its top merchandise sales performer. Fanatics this past season started bringing a second hauler to tracks for Elliott gear, which was up twelvefold over last season as of late August.

Drivers who compete in the league will officially represent NASCAR’s actual teams.

After almost a year putting it together, NASCAR and the Race Team Alliance finally launched their new esports venture last week, the most significant move yet by the sport into the burgeoning space.

The eNASCAR Heat Pro League will be played on 704Games’ “NASCAR Heat 3” video game in 2019 and feature up to 16 actual race teams fielding spots for 32 drivers. The league will be novel in that this marks the first time that participants will officially represent NASCAR’s actual teams in esports competition.

Each team will field two drivers — one who will compete on PlayStation 4 and the other will compete on Xbox One. Participants will include all of NASCAR’s most well-known teams in the Monster Energy NASCAR Cup Series — like Joe Gibbs Racing, Stewart-Haas Racing, Hendrick Motorsports and Team Penske — plus Dale Earnhardt Jr.’s NASCAR Xfinity Series team, JR Motorsports.

The league will hold a draft in early 2019 — potentially during Daytona’s Speedweeks — and will start a 16-race season in the spring that will wrap up during the 2019 NASCAR Playoffs. All races will be livestreamed on NASCAR.com and Motorsport.com, the latter of which became a major investor in 704Games earlier this year.

NASCAR has dabbled in esports for years including a pro league with the subscription-based iRacing simulator, but that league is aimed more toward real-life racers and doesn’t include the involvement and backing of NASCAR’s actual teams.

Not all of the 16 teams have signed up, but the industry is working to get all of them into the fold before the launch. The RTA consists of 12 NASCAR teams, but a handful of others are not members, including Wood Brothers Racing and Front Row Motorsports.

Colin Smith, the former CEO of Motorsport Network, consulted on the deal on behalf of 704Games and Motorsport Network.

For more coverage of the business of esports, visit our partners, esportsobserver.com