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Subject: UFL
Posted by: Great One
- Sustainer [053272014] Wed, May 30, 2007, 11:26
First and Long — Very Long
By JOE NOCERA courtesy of the NY Times
Bill Hambrecht is a rich old Wall Street guy who has made his money tilting at windmills and disrupting the establishment. “That’s what I do,” he says. “It’s fun.” Almost a decade ago, at 62, he founded WR Hambrecht + Company, whose fundamental premise is that companies don’t need to use Wall Street investment bankers — and pay their outrageous fees — to go public. Hambrecht + Company has since become so threatening to traditional underwriters that they often refuse to be involved in any I.P.O. in which his firm takes part.
And now, at an age when most people are well into retirement, he has decided to tackle the establishment again. This time, though, the establishment isn’t Wall Street. It’s the National Football League. Bill Hambrecht, you see, is starting up a professional football league. So far, he and his partner, Tim Armstrong, a senior executive at Google, have pledged $2 million each. They’ve hired a C.E.O. and a C.O.O., both of whom cut their teeth at the National Basketball Association. They’ve got a name: the United Football League. And they’ve lined up a wealthy, well-known businessman as their first owner: Mark Cuban, the billionaire who owns the N.B.A.’s Dallas Mavericks. Like Hambrecht, Cuban loves nothing more than confronting the status quo.
Obviously, the U.F.L. is still in the early planning stages. It hasn’t yet hired a single football person and is still hunting for seven more owners with Cuban’s deep pockets and contrarian mindset, so that the league can begin with eight teams. It could easily fall apart before the first kickoff. Indeed, there has already been one setback: Boone Pickens, the oilman turned-corporate-raider-turned-billionaire-hedge-fund manager, recently abandoned his intention to buy a team. But Cuban remains committed, and if all goes according to plan, the U.F.L. will play its first preseason games in August 2008. I kid you not.
Hambrecht has been thinking unconventional thoughts about pro football for a long time. Back in the early 1980s, he was a minority partner in the Oakland Invaders, one of the original franchises of the late, unlamented United States Football League, a spring league that played its games during the N.F.L.’s off-season. The U.S.F.L. folded in 1985, after three seasons. “It was started by a bunch of guys who were riding high because of the S.&L. boom,” Hambrecht recalls. “As soon as the boom turned to bust, the league went broke.”
Most of us would go through such an experience and conclude, Never again. Not Hambrecht. He was convinced that the U.S.F.L. could have worked with a smarter game plan and owners who were more patient. At various times he discussed a new league with NBC, CBS and Fox, but those talks went nowhere. Then one day last year, Hambrecht told Tim Armstrong, whom he met when his firm helped manage Google’s initial public offering, about his dream of a new football league. The more Armstrong heard, the more excited he got. By October, the two men had committed their $2 million, hired their first three executives (Bill Daugherty, the C.E.O.; Jon Brod, the C.O.O.; and Andrew Goldberg, a senior analyst) and begun an extensive study to see if the idea was really feasible.
Let’s now take a moment to consider what the U.F.L. will be up against: a monopolistic sports league utterly unafraid to take advantage of its monopoly power. Over the years, the N.F.L. has squashed four competitors, most recently the NBC- and World Wrestling Federation-backed XFL in 2001. Right now, Arena Football is an alternate league, but it’s a marginal thing, with negligible TV ratings and an average of 12,000 fans per game. And with eight players to a side, games in the N.F.L.’s off-season and a field that looks like a hockey rink, it’s not exactly “real” football.
Where others might be daunted by the N.F.L.’s success and power, though, Hambrecht came to believe its monopoly status gave him an opening. “I really started thinking hard about this after the Los Angeles Rams left to go to St. Louis and the Houston Oilers went to Nashville,” he told me over drinks recently. “Why do you leave two of the top 10 TV markets in the country for these two smaller markets?”
The answer, of course, is that the N.F.L. doesn’t really have to worry about where its teams are located, since most games are televised and the bulk of the league’s revenues come from its network contracts. What’s more, with the right stadium deal and enough corporate sponsorship, team owners can make as much (or more) money in smaller cities as they can in larger ones. That’s why the N.F.L. does just fine despite not fielding a team in 21 of the country’s top 50 markets — including such enormous metropolitan areas as San Antonio, Las Vegas, Orlando and (of course) Los Angeles. Nor does the N.F.L., which now has 32 teams, have much incentive to expand. On the contrary: expansion dilutes the TV money. (Greg Aiello, the N.F.L.’s spokesman, told me that “expansion isn’t on the table right now.”)
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So the first step in Hambrecht’s plan is to enter big cities where the N.F.L. isn’t. As Mark Cuban put it to me in an e-mail, “There are quite a few good-sized non-N.F.L. cities that can support a pro team.” So far, the U.F.L. has decided to put teams in Los Angeles, Las Vegas and Mexico City. (Cuban is considering taking the Las Vegas franchise.) Each owner will put up $30 million, giving him an initial half-interest in the team; the league will own the other half. But eventually the fans themselves will become shareholders — because each team is going to sell shares to the public. Then the owner, the league and the fans will each own a third of every franchise.
Hambrecht and his executives believe that the initial public offerings will raise, on average, another $60 million per team, giving it about $90 million in working capital. They also hope that the stock sale will create intense fan loyalty. “This is going to be a very accessible league,” says Daugherty, the C.E.O. “Fans will own a piece of the team, and they’ll get tickets at more affordable prices.”
Hambrecht expects his owners to be wealthy — and patient — enough to absorb losses for up to five years. The league will need a television contract, of course, but its existence is not predicated on a megabucks deal, at least not at first. The U.F.L. is open to making a smaller deal with a cable network like USA, TNT or Comcast’s Versus network (the former OLN). One mistake other leagues have made, Hambrecht believes, is counting on an upfront TV deal — and bringing in owners who expect to make money instantly.
One television advantage the U.F.L. will have is Friday night. Thanks to the 1961 Sports Broadcasting Act, the N.F.L. is prohibited from televising games on most autumn Friday nights. (The prohibition was meant to protect high-school football.) Any new league would have televised football all to itself on that evening.
A new league’s biggest issue, though, is whether it really can approximate the N.F.L.’s level of play. As Daugherty puts it, “If you don’t put a good product on the field, nothing else matters.” When he first signed on, he and Brod immediately began looking into that question — and they came away convinced they could land decent players right away, and very good players eventually.
“Bill Walsh used to tell me that the last 20 players cut from every team were almost interchangeable with the last 20 players to make the team,” Hambrecht says. The new league will hire the best of those last 20 players — along with the best of the Arena players, the Canadian Football League players and so on. Though the U.F.L. will have a salary cap, it will be able to pay those players more than they are making now. It won’t be able to afford to sign marquee names like Peyton Manning or the biggest stars coming out of college, obviously. But the U.F.L. will be able to offer most rookies, who aren’t top draft choices, far more money than the N.F.L. would give them. And since the N.F.L. salary cap has been negotiated with the players’ union, it can’t be unilaterally changed.
“The average career of an N.F.L. player is less than four years,” Daugherty says. “They have a huge incentive to maximize their income.” The new league’s officials think they’ll be able to sign players drafted by the N.F.L. in the second round and later. And one former N.F.L. coach I spoke to — who asked not to be named because he didn’t want people to know he had spoken to the U.F.L. — agreed. “They are going to be able to get players and coaches,” he said. “That’s not going to be a problem.” It’s also worth remembering that many late-round draft choices are good football players. Tom Brady, for instance, was a sixth-round draft choice.
As U.F.L. executives see it, there has really only been one competing league that took the approach they want to take: the old American Football League. The A.F.L. played “11 on 11” football in the fall, mostly in cities where the N.F.L. did not. Its founder, Lamar Hunt, pioneered the concept of revenue-sharing and built a unified league with the staying power to last nine years before it merged with the N.F.L. That is the model the new league wants to emulate. Whether the ultimate goal is to merge with the N.F.L. or play alongside it — well, that’s the one place Hambrecht wasn’t going to go with me. “We’ll just see how it plays out,” he said.
When I asked Roger Noll, a sports economist at Stanford University, whether it is possible to compete with the N.F.L., he laughed, but he didn’t scoff. “The crucial barrier to entry is finding stadiums in the biggest cities,” he replied — something U.F.L. executives insist is not a problem in the places they are considering. “If you can do that, it would be easy to have a league.” Noll pointed out that for wealthy people who want to own a football team, it is far cheaper to start a new league than to try to land an expansion team — which, assuming that the N.F.L. were interested, would cost upward of $800 million. “You need to have enough money to experience losses that will amount to 20 to 30 percent of revenue in the first three or four years,” he said. It’s much cheaper to lose money over that time than to purchase an N.F.L. franchise.
When we met, Hambrecht said: “A guy asked me, ‘Why are you doing this?’ ” He shrugged. “I had trouble explaining, except that it made logical sense.” On paper, it does. Whether it plays out that way in real life — who can say? But it’ll be fun to watch. Bill Hambrecht ventures usually are. .
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| 1 | Electroman
ID: 73332719
Wed, May 30, 2007, 19:03
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Saw about this on PTI. They will be playing preseaon games in August, so I assume that the season will be in the fall. Head to head with the most succesful and popular sports league. If they want to waste time, got no problem with that. But if they want to waste money, why not just give it to someone, like me for example. This will fail.
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| 2 | Mötley Crüe
Dude
ID: 439372011
Wed, May 30, 2007, 19:13
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This makes me think of a fantasy football league where you're only allowed to pick players with an average draft position of round 20+.
For hardcore fans of the sport, it would be great. I really hope it gets off the ground.
This talk of competing with the NFL is silly, though. Supplementing is the way to go.
I'll watch Friday night UFL games to prime for the weekends in the fall.
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| 3 | Great One
ID: 201155199
Wed, May 30, 2007, 21:21
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And if people can bet on it (football being the primary for bettors)... it will get ratings. Thats why a University of Eastern Tennessee River State vs. SouthEast Missouri Northern State Technical College gets a higher rating on a Thursday night in October than the Stanley Cup Finals.
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| 4 | Mötley Crüe
Dude
ID: 439372011
Thu, May 31, 2007, 07:52
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That and hockey is a lame professional sport that's like a leper at this point.
ProFootballTalk has picked up on this and run a blog post.
Scroll down the page a bit to last night's entries.
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| 5 | boikin
ID: 59831214
Thu, May 31, 2007, 13:20
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I mean really is there any question about it failing? I mean who here watched the XFL. If you want watch some off season football watch AFl and MC if you want to prime for weekend there is usally a colledge game on wednesday, thursday, and friday.
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| 6 | barilko6
ID: 14424237
Thu, May 31, 2007, 13:23
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The UFL also could become a safe haven for former NFL stars who, for whatever reason, have fallen out of favor in the senior circuit. Pacman Jones, Chris Henry, and even Michael Vick are players who could ultimately land in the new league, and they likely would use their platform to launch verbal missiles at the old league.
I think this point, taken from MC's link, could ring very true. I really like what Roger Goodall is doing, but his housecleaning actions might lend players to a new prospective league.
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| 7 | Great One
Sustainer
ID: 053272014
Thu, May 31, 2007, 13:42
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I think part of the problem with the XFL is that people couldn't get past that fact that it was WWE backed. So there were questions surrounding the legitimacy of the outcomes... which is understandable as WWE is "sports entertainment" and has a script. The football games were not scripted, but some people had trouble getting past that.
I wonder if the sportsbooks even carried lines on the XFL games?
And if Cuban owns the Vegas team - they won't be "on the board" either to be wagered on I presume.
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| 8 | WiddleAvi
ID: 214453112
Thu, May 31, 2007, 13:45
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The XFL was stupid. They tried to mix wrestling and football. I mean how stupid was it that instead of a coin toss the 2 players would fight to get to the ball !! Ansd the stupid cameramen running onto the field between plays.
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| 9 | Great One
Sustainer
ID: 053272014
Thu, May 31, 2007, 13:57
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Should they eliminate piles of guys diving for fumbles and do rock/paper/scissors then?
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| 10 | WiddleAvi
ID: 214453112
Thu, May 31, 2007, 15:50
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GO - This was instead of a coin toss!!! Wow lets make the XFL more exciting. Instead of a coin toss to see who gets the ball we will have 2 players kill each other to see who gets the kickoff. The whole concept of the XFL (Xtreme football) was stupid. Football fans want more football and a game of football that has been changed. Give me another league that has QUALITY football and I will watch. It's not about what can we change about the game of football to make it more exciting.
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| 11 | boikin
ID: 59831214
Thu, May 31, 2007, 15:55
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Avi you can allways watch NFL europe the quality is about the same as what you can expect out the UFL
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| 12 | WiddleAvi
ID: 25102616
Thu, May 31, 2007, 18:34
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Your missing my point. All I was saying was that it seems stupid to compare the UFL to the XFL.
Lastly it seems like from what they are saying that the UFL expects to have better talent the NFL Europe. They expect to be able to offer more money to draft picks who are picked from the 2nd round and down. Now I am not sure where the NFL Europe ranks in the quality of players but I always assumed it was for players who had potential but were not able to make the 52 man roster. If thats the case then it seems like the UFL expects to get better talent then that.
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| 13 | THK
ID: 106322819
Sun, Jul 29, 2007, 01:03
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I did not read most of the comments in the thread, due to the fact I am bout to get to bed. However, I thought I would post my thoughts on the league.
#1) Competing with college football and the NFL in the same season is mistake #1.
#2) Competing with high school football on friday nights is BIG mistake #2. Especially for the franchise in Texas for example. Nothing is going to top high school football in some areas. Especially Triple A Football.
That said, this is a great idea for football junkies. I for one hope it gets off the ground and is successful. However, they MUST play these games in the summer. If they play them in the summer like the Arena League - this idea could actually work. Regular football to get people through the dog days of summer with only baseball to watch. There are plenty of people that would be interested.
Also, Mark Cuban and his cronies are going to be throwing some serious cash around. They are going to go after NFL players even using lucrative deals for marketable players. As well as the top rookie that went undrafted with solid deals. Furthermore, Joe Montana was rumored to be a possible commish with 2 rule changes (Roughing the QB changes and standard 15 yard pass interference).
This really could work. Put it in the summer and they would have a hell of an audience in my opinion.
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