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Could an underdog football league ever rise to compete with the NFL?

St Louis Battlehawks v DC Defenders Photo by Scott Taetsch/Getty Images

This is underdog week at SB Nation. Team sites will be writing about various underdogs. In the days ahead I will likely have some content more narrowly focused on the Jets, but I wanted to start the week with a bigger picture topic.

The XFL is seeking a new owner following its recent bankruptcy filing. The league is the latest football startup attempt to struggle. Unlike the Alliance of American Football or the United Football League, the XFL’s fall was beyond its control. The league had to stop operating during its first season due to the pandemic.

Rival sports leagues have always interested me. Whenever a new league starts up, I root for it to succeed. Competition is a good thing in sports. The NFL wouldn’t be where it is today unless rival football leagues popped up throughout history to challenge it. The Jets and nine other franchises exist because of the American Football League. The Cleveland Browns and the San Francisco 49ers were born in an earlier rival football league called the All-America Football Conference. Strategic innovations have emerged from rival leagues. Many credit the United States Football League for the rise of the zone blitz that populates defensive playbooks. Even the way we watch games has changed. The original 2001 XFL brought us new television camera angles that are now staples of NFL games.

Rival leagues have impacted other sports as well. We have the World Series because the upstart American League challenged the National League over a century ago. The American Basketball Association and World Hockey Association left impacts on their respective sports that resonate to this day.

Could a new football league eventually rise and succeed? A lot of people would say no, but I’m not sure that’s the case. It would be difficult for a new fall league to gain any traction considering how saturated the market is with NFL, college, and high school games., but could a spring league work playing at a time of year when there is no football alternative?

I think an executive from the original 2001 XFL said it best.

“Spring football will work when people learn not to screw it up.”

Tom Veit, former president and GM of the XFL’s Orlando Rage

How do people learn to not screw it up? I have some ideas. Through the years I have spent a lot of time learning about the way various leagues have worked and mistakes they have made. I have spent way too much time thinking about this stuff and figuring out the finances.

This would be how I would try to start a new football league.

Make sure there is enough money.

This seems like the most basic and obvious element, but startup football leagues frequently underestimate how much money it will cost to operate. A league simply shouldn’t begin play unless it is properly capitalized. Seth Wickersham’s expose on the Alliance of American Football outlined a league that started out without the proper funding. The league needed a massive infusion of cash to make payroll after its first week of games. The league had $12 million in revenue against $100 million in operating costs.

It seems like few startup leagues follow the one of the most basic business models of successful established leagues. There is a large supply of very rich people who want to own a sports team. Instead of paying something like $2.5 billion for an NFL team, offer them the chance to operate one of ten teams in a new league for like 10% of that price. That can help provide a new league with the proper capitalization to deal with expenses. Any new venture is likely to lose a lot of money in the first year. An investment is for the long run. And in an obvious way, asking for more money from owners makes the franchises more valuable if they pay it. A high price might make it seem like a league is worth being in.

Make sure the league has ultimate power.

Major League Soccer wouldn’t really qualify as a rival league since there was no major soccer league in existence when it began play in 1996. Still some aspects of its business model would make a lot of sense for a startup league. One of these is the way the league is structured.

Owners in that league technically don’t “own” their teams. Instead they pay for the right to operate a team and share in the league’s profits. The league actually owns all of the teams. The majority of players sign with the league, not an individual team. After players are signed, there are mechanisms to get them to teams. This helps to prevent teams from bidding against each other for players and driving up prices. A new league really needs to be smart with its money. Having teams driving up each others’ costs isn’t the way to go.

Control the stadiums.

Another issue were new leagues have trouble is in their teams not having control over their own stadiums. Most of the time these leagues have to rent out big venues like MetLife Stadium. They don’t always get favorable deals on how much of the revenue they get to keep from concessions, parking, etc.

This is another area where Major League Soccer has had success. The league has had stadiums built for most of their teams. This gives the teams favorable terms on finances. It also allows their teams to make money off other events at their stadiums such as concerts, high school football, etc.

While NFL stadiums are billion dollar palaces, a smaller functional stadium can cost much less. A startup football league doesn’t need a 70,000 seat stadium. For year one XFL average attendance was around 18,000.

Back in 2010 the city of Vancouver built a temporary stadium called Empire Field for its city’s Canadian Football League and Major League Soccer teams while their permanent home was getting renovations. Empire Field was a modular stadium. Components were constructed off site and shipped to the location of the stadium, and the pieces were put together.

The stadium had a capacity of over 27,000 people. It was a real stadium. It had luxury boxes, a press room, video boards, locker rooms, and areas to shop. The stadium was widely praised for its great sightlines. The cost was $14.5 million. That is quite a bit lower than the billion dollar modern stadiums NFL teams open.

Empire Field lacked frills, and the fact it only needed to be built to last for two years undoubtedly drove the price down. Similar longer term stadiums would cost more money, and you would probably want to pay a bit more to have some amenities the temporary Vancouver stadium lacked. With that said, building a functional stadium can be done for a lot closer to $14 million than $1 billion plus, which is something that could used from the fee owners would pay to buy into the league. And stadiums using that modular system could be expanded as demand for tickets grew through the years.

Find the players.

I think this is the biggest area where startup leagues fail. Most recent attempts have exclusively tried to fill a niche as minor/developmental league. There are only so many people who will watch football just because it’s football. Most people are going to find something better to do than watch an inferior league.

I think a successful startup league would need to acquire star power to draw in fans. That doesn’t mean player quality needs to be equal to the NFL across the board. I don’t think many fans would care if the 9th best player on a team would be a practice squader in the NFL. I think there’s just a certain threshold for high end talent any league needs to hit.

The current structure of the NFL opens an opportunity on this end since players’ salaries are artificially low the first four years after they are drafted. Deshaun Watson and Lamar Jackson were well-known stars with exciting playing styles before they entered the league. Because of the NFL’s rookie wage scale, Watson’s average salary is under $4 million his first four NFL seasons while Jackson’s is under $3 million. If another league offered these guys triple or more before they entered the NFL Draft it might be tough to turn down. We could be talking about leaving $30 million or more on the table. (When a Tom Brady becomes a free agent looking for money, he might be worth paying more than any NFL team could afford.)

If you add star power, I think people will watch. Are you tuning into a league with Deshaun Watson and Lamar Jackson? I am even if most players are sub-NFL level guys making around the $55,000 average salary the XFL had.

Find the cities.

Finding the right cities that would support the teams is important.

For starters to sell the league to sponsors having teams in big markets like New York would be important.

It also would make sense to seek out markets where football is popular such as the South and Texas.

Other markets to look at would be cities with established football fanbases that the NFL has abandoned. Unsurprisingly the St. Louis team led the XFL in attendance. It seems like the league missed a real opportunity by not also putting teams in Oakland and San Diego. Back in the 1990s the Canadian Football League briefly expanded into the United States. (I’m not making this up.) The greatest success story was the CFL team placed in Baltimore. This was the period after the city had been abandoned by the Colts and before the Ravens arrived.

The final category would be small markets without a professional sports team. The NBA has done a great job fostering teams in these markets. There is a pride in having a pro team in a city which generates support. When the United Football League moved a team to Omaha, Nebraska, in 2010 the team surprisingly sold games out in a league that struggled to get anybody to the gate. The team with the second most support from that Canadian Football League expansion to America that I mentioned played in Shreveport, Louisiana.

Find the people.

One of the few things I think the Alliance of American Football did well was put credible people in charge of its teams. The league hired experienced coaches to develop players. The league also hired Bill Polian to hire personnel. Any new league would be tasked with finding and developing under the radar talent.

I think it also would be a good idea to scour lower college and high school levels for coaches who have brought interesting and fun strategic innovations. Those are the levels where football innovation usually originates.

Get on TV.

More than any other sport, football’s business model is based on getting revenue from television. Wickersham noted that the Alliance of American Football actually had to pay CBS to televise its first game. That wasn’t going to work. Things for the XFL seemed more promising on this front as the league struck deals with ESPN and FOX. That also meant those networks would advertise the league.

While we are in uncertain times, broadcasting rights have remained high over the last few decades as the media landscape has changed. Networks and companies have paid good money to broadcast (and stream) games. Landing a good TV deal is imperative. And this is why landing that star power is imperative. A league with established stars is a much more valuable television property.

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These are some of the broad outlines I would have for creating a league. I have spent way too much time thinking about this so I won’t bore you with my more detailed ideas. Thanks for indulging me.

Also if you happen to be part of or know a group of billionaires who want to start a sports league and are looking for a commissioner, I’m available.