The XFL: Xtreme Football League or Xtreme Business Risk?
Other than the NFL, football leagues have come and gone. The most success other leagues have had was the AFL getting absorbed by the NFL, and the USFL succeeding in an anti-trust suit just to be awarded practically nothing and fail anyway. All other start up leagues have folded including the Arena Football League, the AAF, and the previous iteration of the XFL.
Now the XFL is back from the dead, and the question is will it remain or make another fast exit like all its predecessors.
Money
Let’s start with the money, since the league will not last long without good funding. This was the problem with the AAF, a league I believed had a chance at being around for a while as a developmental league. However, one of the owners cut bait and ran after the NFL and the NFLPA declined to offer a deal with the still unproven league to be its affiliated developmental league. With one of its main sources of funding backing out, the league had to cease operations immediately.
Vince McMahon has sold some of his WWE shares and earmarked close to $500 million to devote to the league’s start up and operating expenses. The cost of a sports league such as the XFL is close to $150 million and will definitely come close to that expenditure in year one. McMahon is committed to getting the league off the ground, but he is estimated to lose over $300 million in the first 3 years of the league. However, the gamble will pay off if the league gets a TV deal.
Viewership
The first week of games showed a fruitful viewership with an average of 3.12 million viewers, and week 2 showed an average of 2.26 million viewers. This number may seem minuscule compared to the NFL’s weekly average of 16.7 million viewers, but even though it is the same sport, it is an unfair comparison.
Two comparable leagues are the MLS and WNBA. Both leagues average under 500,000 viewers per game, with the MLS peaking at 2.07 million viewers. Even NBA games only draw 1.2 million viewers. These leagues obviously play more games per week but the XFL is bringing in higher ratings and viewership so far and that looks promising. The WWE which is a minority owner of the XFL also broadcasts twice a week. It averages over 2.1 million viewers per wrestling broadcast.
If the XFL keeps its current viewership steady over the next 2–3 years, it will not have too much trouble finding a TV deal to keep the league afloat. However, if viewership drops below the other upstart leagues and does not find a tv deal, the league will be dead in the water once the seed money runs out.
While the old XFL attempted to live in a vacuum and pretended the NFL did not even exist due to its competition with the staple football league, its new strategy is to recognize that the NFL does exist. Its product is not an alternative but gives relief to fans who want football during the NFL and college offseason. The league is not advertised nor trying to be a developmental league for the NFL, but its player contracts allow for players to move on from the league if they are offered a chance with an NFL team. Allowing players to walk to another league may seem like a foolish business decision.
However, it is the complete opposite since it will create ease of mind for talented players on the border of the NFL and just need an opportunity to prove themselves. The strategy will bring more talent overall to play and improve the level of play, even if that means for one season with a talented player. Now, the XFL mentions current players and coaches NFL experience as a selling point to the talent they have gathered to create a great product for your entertainment.
Product
When the XFL was originally established it was a gimmick like any other WWE production from funny names on the jerseys to wild dashes to gain possession of the ball first. Also, the rules or lack there of allowed for dangerous hits against unprotected kick returners and wide receivers.
Now, the XFL’s resurrection has come with more sensible rules that satisfy what football players and fans have been asking for.
The new kickoff rules increase player safety with lower speed collisions, while at the same time allowing for more kick returns by incentivizing keeping the ball in play. The NFL has all but phased out kick returns with only 25% of kicks being returned, the days of exciting kickoff returns seen in the past by Devin Hester and Dante Hall are gone. However, the XFL new rules may show a return to the old way not in hard hits but exciting run back with a 90% return rate in the first week.
Additionally, all challenges come from the booth with more transparency of the official’s decision-making by giving access to their discussion huddles and communications with the booth. This was a radical rule change but every sports fan in their life has exclaimed, “How **** did they come to that decision?”
We asked and the XFL delivered by giving us access to the referees as well as in game on the field interviews with players and coaches. League broadcasts even go as far as allowing play calls to be shared with the viewers at home. With all the interviews and booth reviews the game may be thought to drag on but this is not the case with the XFL speeding up the game with running clock until the last 2 minutes of the game and only two timeouts per half.
There are several other changes made by the XFL, but the last one that addresses fans and players requests in improving the game is the XFL’s overtime rule. No ties like the NFL allows, the XFL has a shootout format giving both teams opportunities to have the ball. This will definitely bring closure and finality for every game. Multiple NFL players in the past have stated frustration with the NFL overtime rules allowing draws, even going as far as stating they would prefer a loss over the draw.
Promotion
If Vince McMahon can do anything it’s promote. From introductions to commercials the man is a real-life Jackie Moon, and all other sports leagues have been playing catch up for decades. The XFL social media team continues the legacy by being on top of their game every week. Combining their effort with the power move to hire people such as Pat McAfee to give the internet presence an extra push makes the XFL trend every weekend like clockwork. The access on the field with the help of the social media is bringing personality back to the game. A route the NFL has trended back to with allowing celebrations again. If the league fails, I can promise you it will not be due to a lack of promotion.
Conclusion
All start-ups can hit a road block and be out of business overnight, which is evident from the AAF going belly-up in less than a week. However, it is my belief the XFL will be here to stay by acquiring a TV deal if it meets these 3 requisites.
1) Vince McMahon holds steadfast on watching his investment seed money go into the league for 3 years, even if the league is not making a profit or is only breaking even. This is to be expected of a new sports league.
2) Keep average viewership above 1.5 million per game through the first 2 seasons. It would be hard to not get a TV deal with a number like that but showing growth will be necessary as well.
3) DO NOT GET SUED! The league needs to check and double check every contract and/or trademark it uses. The littlest dispute could divert necessary assets and cause a payroll problem down the line leading the league to a domino effect scenario of other lawsuits.
Vince McMahon heard the cry for more football in the offseason and smelt blood in the water. It looks like he learned from his mistakes from last time with not expanding the league past what he can afford. The AAF tried to beat the XFL to the punchline, but it looks like Vince McMahon will have the last laugh. He is not the type to fail twice, and this time around it looks like a serious venture and not a gimmicky pet project.
Twitter: @shivers_thomas @readZEAL
