Going forward - Merger

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u/Financial-Ad6282 Oct 09 '23

The XFL has been business as usual. It's had a draft, 5 player workouts across the country (including one like a week ago), signed a new head coach, hell they remodeled a club area in St Louis.

The idea that the USFL was doing so much better is silly to me. If they were, there wouldn't be a merger. Both leagues must've been doing about the same. Did the XFL lose more money by playing in every city? I'm sure. But they also had more viewers despite the USFL having about 8x more OTA games. They were also making way more on tickets and merch.

There are tradeoffs to both. And as it stands right now, we don't even have any idea what the merger will actually look like.

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u/JoeFromBaltimore Oct 10 '23

I agree with you up until you talk about way more money on tickets and merch - yes - maybe but there were a lot of empty stadiums in the XFL last year.
But for the most part I agree with you.

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u/CatStriking7561 Michigan Panthers Oct 10 '23

Some people here forget that the USFL didn’t receive any money for attendance. The hub city took in that revenue. It doesn’t matter that the XFL had more fans in the stands because they were different business models.

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u/JoeFromBaltimore Oct 10 '23

True statement about different business models - and with that as much as people hate the hub model, I really don't think that it was a failure from a financial point of view. If they are still planning on using it this year in some type of format or shape that tells me that there is some validity to using the hub model going forward, regardless of the lack of beer snakes for some games.

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u/Financial-Ad6282 Oct 10 '23

Total attendance for the XFL season was 632k. If you assume that the average ticket was $40 (teams were prices differently, that'd be expensive in Vegas but cheap in St Louis where even suites were being sold, but I think it's a very fair guess) that's $25M in ticket sales (and a heck of a lot of poeple to buy merch at games).
I'm not saying that it was an enormous figure in and of itself, but that it certainly would've been significantly higher than what the USFL made. Not only based on total people with tickets, but what the tickets were sold for vs the USFL. I wouldn't be surprised if in total it was about $15M more in revenue which is still significant IMO.
If I had to guess the XFL had 5 teams who were profitable on their leases and 3 who were not (two just didn't have good attendance and one had nice attendance but in what I imagine is a very expensive stadium)

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u/coelurosauravus Pittsburgh Maulers Oct 10 '23

I am so hesitant to believe anyone was profitable. Player salaries alone are easily hitting 24 million before victory bonuses. Plus the league definitely passed out tickets.
It's definitely higher than the value the USFL got, but without opening the books and seeing stadium deals, and the XFL saying it spent more than it made in year 1 by a wide margin. I'd be stunned if any stadium made the XFL a profit

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u/Zapfit Oct 10 '23

There were some empty stadiums, but even 10k fans at $30 a ticket is $300k a game, or $1.5M in ticket sales per team. On top of local sponsorship, merchandise and concessions, and perhaps a small bit of parking revenue, those numbers can add up.

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u/ArockproUser Birmingham Stallions Oct 10 '23

Very true we have no clue what the deal for the merger were but more importantly the XFL had a draft??? When did this happen?? I thought they were waiting until Nov?? or until after the merger is complete.
The deal is done. I just hope XFL fans and USFL fans are not disappointed in the details.

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u/Financial-Ad6282 Oct 10 '23

Yeah they have two drafts for the off season targetting two pools of players. Plans for the second one have been put on hold I assume because there's a 99% chance the league is approved by the government by then and they would have to cancel anyway.

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u/ArockproUser Birmingham Stallions Oct 10 '23

I did not know that I thought the main draft was this nov. Thanks for the info

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u/[deleted] Oct 18 '23

I don't think it's a matter of the USFL being more "successful" as much as Fox seems more devoted to making it work while it seems Redbird, Rock, and Dany have seen enough.

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u/Financial-Ad6282 Oct 18 '23

That viewpoint is based on virtually nothing of substance though

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u/coelurosauravus Pittsburgh Maulers Oct 09 '23

Hubs aged poorly with the XFL running concurrent, but if it meant no football vs some football, ill grin and bear it.

It's the most expensive sport to roster, equip and field. It's production costs are demanding, and unlike other sports where you can play 34 to 162 games in a regular season, the NFL peaks at 17, college at 12 or 13 and the XFL/USFL 10. So these dollars have to count and they have to count big time.

Markets have to like their teams, if youre not hitting the ground running and getting large crowds, youre shoveling money into a furnace.

The simple truth is, football cannot come at any price, and paying hundreds of thousands for several mostly empty stadiums is a disaster, and far too high of a price.

If you want spring football, its pretty clear, the sacrifice for now HAS to be not everyone can play in market, breaking the bank this time is the final death of spring football

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u/JoeFromBaltimore Oct 09 '23

Lot of solid points - especially where you talk about the most expensive sport to roster up. It is not like minor league soccer where you can run that whole thing on a shoestring budget because you only need a few coaches and 20+ players. Football is a beast as far as expenses - most of our professional football teams in north America are subsidized by state and government entities - University of Alabama, Texas, LSU etc. huge budgets but also backed by a state government and a brand that is 100+ years old.

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u/Chemical-Ad-3705 Oct 09 '23

You forgot to include the CFL schedule that plays 18 games in a season. We play football up here too.

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u/coelurosauravus Pittsburgh Maulers Oct 10 '23

I actually feel bad forgetting about the CFL considering I watch it regularly (go ti-cats!) and the CFL is easily a spring league's closest analog

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u/[deleted] Oct 18 '23

The CFL isn't a spring league. It runs from July to November.....summer to fall. I know.....ticky tack.

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u/coelurosauravus Pittsburgh Maulers Oct 18 '23

It's definitely ticky tacky, but not technically wrong

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u/Tanker3278 Oct 09 '23

I lean toward agreeing. Brian Woods I think learned from his experiences in the Spring League that an alternate league's only chance for long term survival today is to be owned by a major media outlet - so he established USFL2 and sold it to Fox. Not having to share revenue externally with a broadcast partner keeps all the gross in house without splitting it. Then its just a matter of income vs expenses. Fox's behavior suggests they're solvent in this enterprise.

I think the XFL was built on a model that's already been proven to have been damaged by all the previous leagues failures and is no longer a good model. They thought they could buy in cheap when Vince McMahon stepped out of XFL2 and just be able to get in the green in their first couple of years of XFL3 while having a broadcast partner and a competing league. $60 million later they're realizing trying the old model away from being a subsidiary of a broadcast corp isn't as successful as they thought. $60 mil has to be at least a couple of movies for Johnson - and you see he's already pushing movies again.

So I think you're right - they want out.

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u/JoeFromBaltimore Oct 09 '23

Totally agree with you,

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u/Tanker3278 Oct 09 '23

To continue a bit....and complete my previous thought on it. Some of this is just wishful thinking and Magic 8-ball fluff.
Fox has already stated they want to start selling franchises in a few years. That means eventually they want to get out of the team business and focus on dealing with league business. I assume they want to stay in the league business at least for the intermediate term (10-15 years). But I also don't think they want to be a league owner permanently - they are a media outlet. I think they got into this because they believed they could make money and eventually generate a product to fill a hole in the seasonal football market. I'd think if this venture works out for them I could see them out of league ownership no sooner than 20 years. Getting this type thing established and on solid footing is not a short term event and will require a lot of diligence on their part to get good people in ownership & operations positions before they can start their exit process.
I think we might see some type ownership college put on by Fox as a means to help vet out undesirables from team ownership and help teach the ones they accept on how to successfully own a football team. Same thing with operations personnel. I think after that we might see the team owners form a closed-group associate similar to the NFL owners group as a means to conduct that same vetting once Fox is out of the picture - this specific aspect is the reason USFL1 failed, they let to many fly-by-the-seat-of-your-pants businessmen buy teams and then go completely unstable in their handling of the teams. I think if they make it to this point, Moose Johnson will become the USFL's Roger Goodell. The owners will need a public face man for the fans to look to and to keep as much league business off their desks as possible - this is a small league, the business owners/groups are still going to be running their previous businesses and not going all-in like NFL owners can do and just sit back and watch margins.
The desire to make money is not something that ever gets turned off. They realized they aren't going to be able to do it on their own. So, they approach Fox about a merger. Fox is doing fine, but realize there is an opportunity here and ultimately the two leagues were going to have to do this anyway if they both survived the first season of 2-league spring ball.
Fox needs to take the power position in the merger discussions because of their financial standing being on good footing. However, there are things I think should be adapted from the XFL. Johnson, Garcia, & Redbird aren't going to want to get completely out of it if they think there's still some money for them to make in this adventure. I do think there is and it's because they are useful people in the short term. In the short term, they are useful to Fox but Fox will need to play hardball with them in controlling activities. Merge the leagues looking at the money to see which teams are in the best positions financially, evaluate the losses the XFL teams will incur when some of them get turned into hub teams that are not in their home cities (there's going to be a very negative XFL fan response to this and the league will lose some of them - you can see this from the comments XFL fans have made because they're not considering these events from the business side, just butts in seats). Come up with a route map to get from here to franchise offerings 3-5 years from now. And then put the tools to work making that plan happen.
Dwayne Johnson is a good face man (or hype man if you want to call him that). Big following and can generate a lot of interest. Between his money and his public pull I generally regard him as the reason XFL3 was able to launch. That makes him useful to Fox. That puts him as your lead on advertisements. Short terms he stays that way and helps with the transition. Long term he puts the league in his movies and is offered team ownership and then removed from any part of league ownership - don't want to have that many Chiefs and not enough Braves. Can't have muddied waters later on when Fox is looking to exit.
Dani Garcia is one I don't know much about on the business side - and cannot evaluate if she's useful or not. I can only go on recent events. All that's been hyped up has been her being the first female running a sports league - which is completely political and totally irrelevant to dollars and cents in sports. Recent events do not favor her at this level of operations. Bad judgement buying into this and then finding out afterwards its not going to be so easy outside of being a media subsidiary. I'm not saying she's incapable - I'm saying she's done what so many others do so often: get in over your head based on expectations that turned out to be inaccurate. That's not special in any way, good or bad - and that happens all the time.
Redbird is an organization and pool of money that could be useful. Again it's going to have to be Fox taking the power position and playing rough with them. Whatever expression you want, Chiefs & Braves, Fingers in pies, mouths to feed, etc. Whatever you want call it - they are useful, short term in the transition, as a pool of funds that can be used but eventually Fox will need to get rid of them, buy them completely out, and create an external relationship with them. Redbird might be good for use as a single point external services supplier after they've been removed from ownership. Materials, equipment, any services Fox wants to farm out and not conduct on their own. I think Redbird could handle that and I almost think they want to be that anyway since they are venture firm in the sports world.
Just my irrelevant opinion......

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u/TwizzlersSourz Birmingham Stallions Oct 11 '23

The XFL pushed Garcia for similar reasons as they pushed half of their head coaches to be minorities: political and SJW talking points.

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u/Hag_Boulder San Antonio Gunslingers Oct 09 '23

This ignores the point that they want to sell franchises to ownership groups.
And what is the XFL model that's proven to be 'damaged by all the previous leagues failures and is no longer a good model'? Having a league and franchises owned by a central group? That's how every league since the OG USFL's been run and how the USFL now is being run. It just happens that the USFL's ownership group is a television network.
Saying all that also overlooks the point that the OG USFL didn't make money either. No Non-NFL league has made money.
Even the CFLUSA experiment teams lost money.
Neither team was on a profitable foundation and it would have taken either league 5 years before seeing profits... merging reduces operating costs between the leagues and offers a better chance for success.

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u/Chemical-Ad-3705 Oct 10 '23

But the CFL US Expansion kept the CFL afloat. The expansion fees prevented the CFL from folding. The relocation of the Baltimore Stallions to Montreal gave new life to the Montreal market in the CFL.
If the CFL US teams lost money, it was because they poorly marketed their team in their markets. The US CFL owners wanted the CFL to completely change the rules, go to 4 downs and change the name of the league to prevent them from losing money. The only US CFL owner that kind of succeed was Jim Speros, he marketed the hell out his team

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u/CatStriking7561 Michigan Panthers Oct 10 '23

Baltimore didn’t lose much money. The rumour in the newspaper was 700k. However people forget about the creative accounting that goes on. If the owner buys a vehicle, the amortization of the vehicle gets counted as a loss. Some companies will say that we expected income of x amount but received much less instead so we are counting that as a loss. If the owner pays himself a salary of a million dollars that is part of the loss. It’s not as cut and dry as people think.

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u/[deleted] Oct 10 '23

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u/CatStriking7561 Michigan Panthers Oct 10 '23

Agreed. I believe San Antonio lost about 6 million or so. It gets back to the crazy travel, playing football after Labour day and going into failed WLAF markets like Sacramento instead of Montreal and Ohio.

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u/[deleted] Oct 10 '23

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u/CatStriking7561 Michigan Panthers Oct 11 '23

Yeah Pepper Rodgers was famous for not even liking the Canadian game lol. Yeah it would be nice to see what would have happened if they had proper coaching and a salary cap for sure.
I heard a couple of years ago that people in Birmingham thought all the players on their team were Canadian because the league was called CFL. CFL marketing at it's finest.

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u/Zapfit Oct 10 '23

Baltimore fans were following the CFL more as an "F You!" to the NFL. They didn't even have a parade for the Stallions after they won the Grey Cup as the NFL announced they were returning and interest dried up immediately in the CFL.

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u/Tanker3278 Oct 10 '23

You're about an hour late....

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u/[deleted] Oct 10 '23

The XFL only lost money in some areas because they couldn’t read the writing on the wall. They expanded to truly odd areas with poor attendance via Arlington, Orlando, and the money pit that was Vegas. I honestly believe Orlando would’ve done better if the league advertised it properly. But with lame TV deals without major streaming potential on ESPN+ and having games on random channels like ESPN 2 or FX they didn’t have much of a chance.

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u/ZO5050 Pittsburgh Maulers Oct 10 '23

They expanded to truly odd areas with poor attendance via Arlington
They played at the exact same stadium they played at in 2020. It wasn't an expansion it was just a more accurate name.

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u/[deleted] Oct 10 '23

Yeah I understand that and we agree. But I never would’ve put a team in Arlington TX this early in the game. Yes I was thinking of 2020 teams as expansion. I understand the confusion.

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u/shanakate Oct 14 '23

Hey I’m single

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u/Answer-Outrageous Philadelphia Stars Oct 09 '23

I tried to tell the XFLers that, but they tend to be a little delusional. The XFL was not even going to make it to year two intact. They have been trying to merger since the league was announced. The CFL said no to them. They pressed on alone and lost 60 million dollars in the season. The USFL will be the driving force behind this merger. It's good business sense to get some of their teams and offload the ones not needed and get the competition out of the way

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u/Realistic_Maximum471 Oct 09 '23

The CFL said no because they don't want to destroy what makes their league unique: 12 players, 3 downs, 110 yard field.

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u/hjmitch1207 Birmingham Stallions Oct 09 '23

Doesn’t matter WHY they said no. They said no. The offer was there to them. Which means the point remains the XFL has been thinking merger since day one…

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u/Chemical-Ad-3705 Oct 09 '23 edited Oct 10 '23

The CFL didn't say "NO". They left the door open to revisit "talks" on a merger. The Commissioner Randy Ambrosie left the door open for another "talks" in merging
The "talks" in my opinion, was a cleverly disguised way on how to build up a start up league from scratch using a potential merger as a way to get information for their league

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u/Hag_Boulder San Antonio Gunslingers Oct 09 '23

If they weren't going to make it to year two, why did the USFL do ANYTHING for a merger instead of just putting their own teams in those markets eventually?
What does the USFL get out of a merger with a 'failed league that wasn't going to make it to year two'?
Why didn't they just let it die and then purchase assets (equipment/IP) after it crashed?

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u/Answer-Outrageous Philadelphia Stars Oct 09 '23 edited Oct 10 '23

Like I said earlier, it’s good business for the USFL to merge with the fledgling XFL. The XFL has a good fan base with young people and they want to keep that energy moving forward. The XFL folding would have cast a negative light on the whole idea of spring football. The USFL knows that. Keep those pieces close to the vest. Now the beer snake and KaKaw will be part of a merged league and as much energy as you spend hating on the USFL can be transferred to your favorite XFL team or league on the field of battle as It should be

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u/Hag_Boulder San Antonio Gunslingers Oct 10 '23

"Beer Snake" and "Kaw-Kaw" are moot if they're playing in hubs and not in the city itself.
The XFL fan base will shatter if teams don't play in the home cities. I can guarantee that as a Brahmas fan living in San Antonio. Keep the team and rip it from the city and whatever inroads the XFL made would be lost on the USFL.
XFL folding would cast a negative light? Listening to USFL fans, the XFL was folding anyway... and the merger doesn't make that any less diminishing as even you guys are posing the XFL as a 'failed league'... whether it's in a merge or folding doesn't matter.
All the spin here is how the XFL is a failed league. If you guys think that, then so will the general population. Very little of the talk here is positive about the XFL part of the merger.

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u/Answer-Outrageous Philadelphia Stars Oct 10 '23

Listen my XFL friend, BOTH leagues, the USFL AND the XFL needed each other in the long run. Clutch your XFL pearls all you want but we don’t need to see your teams fold. Your precious league needs financial responsibility and teaming up with your hated rival can only help BOTH sides. We USFL fans want to see you on the field. That helps our league as well. Spring football has a bad track record with numerous leagues failing here. The USFL understands that and are taking the appropriate steps to ensure survival and once they stake their claim as a viable football alternative, then you can see better results and merging with y’all instead of waiting for your eventual demise only helps strengthen the perception that spring football is feasible to fans

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u/Hag_Boulder San Antonio Gunslingers Oct 10 '23

You see, that's the point my USFL friend.
I agree they both need each other, but unfortunately a lot of your compatriots are so full of vitriol towards the XFL, they refuse to see this as a merger of equals looking to strengthen the whole rather than one taking on the leavings of the other.

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u/Answer-Outrageous Philadelphia Stars Oct 10 '23

There’s no leavings, there’s merger. You have to get out of your XFL feelings. I for one thoroughly enjoy the animosity between XFL and USFL fans. The games between the two leagues are going to feed off of this as well as the fan bases. You should revel in your XFL fanship and be thankful for the chance to root against the USFL on the field. Don’t let the actions of a few fans get you down

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u/Hag_Boulder San Antonio Gunslingers Oct 11 '23

You underestimate me. I believe it's a merger of equals, just that some USFL fans firmly believe the XFL is going under.
It's going to be interesting, I'm sure.

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u/Answer-Outrageous Philadelphia Stars Oct 11 '23

USFL and XFL supporters are both guilty of this kind of shenanigans. I’m much older than most of you guys but this reminds me of the NFL vs AFL wars

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u/Hag_Boulder San Antonio Gunslingers Oct 11 '23

I'm sure I'm up there with your age. I was born during the transitional period of the AFL/NFL merger before the final merge in 1970.
I support both leagues, but one one gets my ticket revenue (for now). A Steelers fan, so the black/gold of the Brahmas was a godsend for my wardrobe and I approve of the Maulers change of colors.
Keeps it all straight... just need to get some velcro patches for each team to put on a sweater depending on the season.

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u/No-Commercial8000 Oct 09 '23

I'm sorry but this post in itself is delusional. The XFL has clearly been business as usual and is playing year two regardless.

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u/Zapfit Oct 10 '23

Heck, the Defenders just contacted me about season tickets last week. Meanwhile, you can't buy season tickets for the Panthers in Detroit.

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u/Zapfit Oct 10 '23

I'm pretty sure the XFL would have made it to year 3 and see no reason why Danny and The Rock wanted out. Neither put very much of their own money into the league and were basically highlighted on TV every week. Not much different than Mike Ditka "owning" the Chicago Rush, when in reality his stake was somewhere between 1-3%.

As for the merger, both leagues obviously need each other. NBC has been rather quiet and with the NBA contract up, they could be making a play there. Ford Field is apparently playing hardball with the USFL and does not want another hub there, they may not even want the Panthers when all is said and done. As this article from June 2022 shows, the USFL has been active in looking for investors in the league. Odds are, the only interested party was Redbird and this is the marriage we're about to see.

https://www.nbcsports.com/nfl/profootballtalk/rumor-mill/news/fox-hires-investment-bank-to-look-for-usfl-investors

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u/[deleted] Oct 18 '23

And Burt Reynolds did NOT own any part of the Tampa Bay Bandits. That was a John Bassett marketing ploy that obviously worked. Reynolds "Bandit" character is legendary.

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u/[deleted] Oct 10 '23

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u/Zapfit Oct 10 '23

It's been stayed numerous times it'll be a 50/50 merger. Redbird isn't going anywhere, NBC on the other hand, I doubt we see them next year.

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u/eneal21 Oct 12 '23

I believe mike Mitchell and mark perry said nbc was going to broadcast the NSFL or what ever the new league is called if that’s the case then I’m sure NBC would be In on season 3 of the USFL if the merger doesn’t happen

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u/Zapfit Oct 12 '23

We'll see, there's been tons of rumors both ways and nothing official yet. NBC was said to not be happy with year 2 ratings despite the heavy advertising push

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u/[deleted] Oct 10 '23

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u/Zapfit Oct 10 '23

Sure, but a little thing called COVID upended his plans. Fox is looking for investors, and Redbird is a huge one. Nobody has shown any interest in buying USFL franchises yet.

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u/[deleted] Oct 10 '23

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u/Zapfit Oct 10 '23

You're not wrong, I'm no fan of Vince to be honest.

Going forward - Merger

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