Friday, July 29, 2011

Is the United Football League done?

Friday, 29 July 2011 14:21




It probably has not been a good business year for the former Google executive Tim Armstrong. After leaving Google, Armstrong took over America Online and decided to put together a new football league called the United Football League. Armstrong's AOL is still floundering and is not in any better shape after Time Warner made the decision to jettison the one time gold standard in Internet service. The United Football League seems to be, using a boxing parlance, taking a standing eight count just awaiting the knockout blow.

The United Football League was heavily in debt when the 2010 season closed and has not cleared up the financial problems. The 2011 training camp season for the league's five teams has been postponed as has the league's planned August kickoff. There is a question of just how many teams will be on the field if there is a 2011 season.

Will Hartford field a team? As of Wednesday, the answer seemed to be yes, maybe, well maybe not. The United Football League has been, to say kindly, a work in progress since the announcement in 2007 that a group of well heeled, well connected investors including the husband of the Speaker of the House of Representatives, Paul Pelosi whose wife Nancy wielded the gavel in Washington, and Armstrong.

The league had a plan to start in 2008. The United Football League missed the target and began playing games in 2009. The present Hartford franchise was located in New York with the plan to use the Mets new baseball stadium in Queens named after a taxpayers bailed out bank who bought naming rights from Mets owner Fred Wilpon while the stadium was being planned and constructed.

Team owner William Mayer never did get a deal done with Wilpon and ended up playing one game at Giants Stadium in East Rutherford, NJ, one game at Hofstra's football stadium in Nassau County and one game in Hartford.

Mayer moved the team to Hartford in 2010 and found a local partner, the operators of the Hartford stadium, to invest in the team.

The league "expanded" to Virginia Beach, Virginia in late 2010 but the owner of the Hampton Bay area team, Jim Speros, got out and the league was stuck with an ownerless expansion team. Meanwhile the Orlando-based Florida Tuskers (partially owned by the Tampa Bay Rays Major League Baseball franchise owners) folded last January leaving five teams, Hartford, Las Vegas, Omaha, Sacramento and Virginia Beach. At the time Speros left and Orlando dropped out stories began to surface that the league was not paying some of the league and franchise bills including paying players for the championship game.

The UFL is supposed to be a development league not a National Football League competitor and players contracts with UFL teams in theory end with the UFL's championship game. But after the 2010 season, UFL officials wanted a payment from someone (the player, an NFL team) to release a player that had an opportunity to join an NFL team.

Armstrong had concluded a multimillion dollar deal with Arianna Huffington to combine the Huffington Post and AOL’s version of a newsroom. Meanwhile, they fired a lot of AOL writers and brought on the Huffington Post—a website that prides itself on not paying all of the writers at the time the stories about players not being paid started to leak.

The United Football League probably will be a case study one day in sports business management programs in colleges and universities in the United States. The league's apparent failure fits a narrative laid down by National Basketball Association Commissioner David Stern.

Stern's formula for being a successful league and franchise can be best explained by looking at a three legged stool. A stool needs three legs to be operational.

A league, a franchise, needs three components or legs to make it work. Government, a large cable TV contract (regional and national sports networks are placed on a bundled expanded tier with other cable TV networks and the consumer pays for all of those networks whether that consumer wants the network or not as part of the tier thanks to Congress and President Ronald Reagan's signature in 1984) and corporate support (buying luxury boxes and club seats and dining at venues and claiming going to games as a business expense and getting tax breaks under federal law).

The UFL apparently has failed on all three counts.

Armstrong and league officials had no leverage strong arming politicians in making demands for new stadiums and getting 92 cents of every dollar generated in the facility to flow back into the league or individual owners. Mayer used three stadiums in 2009 for the New York Sentinels and settled on Hartford.

Hartford is a problem for a league made up of mid-level American cities looking for a large local cable TV deal. The regional sports networks in New York and Boston probably would not be interested in Hartford games at a premium price although a couple of Colonials games ended up on the Boston Red Sox, Boston Bruins owned New England Sports Network. The same holds true for Comcast's Sacramento region sports network, or Comcast's Mid-Atlantic sports network or MASN in the Virginia Beach territory. Las Vegas is part of the Los Angeles regional sports channel’s reach and Omaha is not enough of a draw for any Midwest sports channel to pay big dollars.

The league played games all over the calendar and flew under the radar in terms of scheduling games on Friday night and Saturday during the fall. The NFL doesn't play on Friday nights or during the day and not on Saturdays during the high school and college football seasons in a trade off for an antitrust exemption for television purposes. The NFL never plays a regular season game on Friday nights and presents Saturday games starting in mid-December.

The league never was able to land a big national cable TV contract and there was little hope for a national over-the-air network to pay any sizeable rights fees for an entity which in 2009 was located in New York, Sacramento, Orlando and Las Vegas. Mark Cuban's HD Net and Comcast's Versus had television rights.

In 2010, Hartford, Las Vegas, Omaha, Orlando and Sacramento had teams. Again that really is not appealing in terms of national footprint.

The UFL wanted fans not customers and pushed the league as a good place to watch football at a fraction of the price of NFL tickets. That doesn't work anymore in the world of big time sports. Attendance was poor in many spots.

There have been many "rival" football leagues that tried to gain a piece of the professional marketplace. There were four versions of the American Football League. The second version of the American Football League featured the Cleveland Rams in 1936. The Rams franchise jumped to the NFL in 1937 (that franchise moved to Los Angeles in 1946, Anaheim in 1980 and St. Louis in 1995). The All American Football Conference lasted four years between 1946 and 1949. The NFL took three of the AAFC's franchises, the Cleveland Browns (another Cleveland franchise that ultimately failed and was moved by the owner Art Modell to Baltimore in 1996), the San Francisco 49ers and the Baltimore Colts (a franchise that went to New York in 1951, Dallas in 1952, back to Baltimore in 1953 and Indianapolis in 1984). AFL IV, which was bankrolled starting in 1965 by David Sarnoff’s NBC-TV, merged with the NFL in 1966 with the NFL taking all ten of the AFL's teams in 1970.

Other rivals perished.

The World Football League folded in 1975 after nearly a two-year run. The NFL moved the Pro Bowl to Hawaii after the WFL ended perhaps as a thank you to Hawaiian land developer Chris Hemmeter, the WFL owner who put the league out of business. The United States Football League had a three year go between 1983 and 1985. The USFL sued the NFL on antitrust grounds in a lawsuit headed by Donald Trump in 1986. The league won the lost suit (the battle) but Trump lost the war as a jury gave Trump's league a dollar in damages (apparently Trump's lead attorney Harvey Myerson did a great job getting the court win but messed up after the jury came back with a one dollar damage fee by not asking the jurors why they came up with the dollar figure while he had the opportunity).

Trump pushed the lawsuit while the NFL was looking for another solution which would have included taking two USFL franchises into the league. It was thought that Baltimore and Oakland (replacing two NFL franchises that moved to different cities) were the two markets the NFL wanted.

The NFL did not want Trump.

The International Football League and the Professional Spring Football League never got off the ground. In 2000, Bill Futterer's Spring Football League played a few games and then folded. Vince McMahon's spring time XFL was backed by General Electric's NBC network with dollars and exposure but the league folded shortly after the completion of the 2001 season. NBC Sports executive Ken Schanzer pulled the plug on McMahon and the XFL.

The XFL had a cable TV deal with TNN at the time and ESPN was allegedly very interested in the league for the 2002 season according to one prominent XFL official who still rues the day that Schanzer ended the XFL. According to that insider Schanzer didn't want a GE-NBC property on ESPN and he simply folded the league. The XFL would have been a cable only entity in 2002.

UFL officials knew the financial history of rival leagues and decided to test the marketplace for football in a crowded football environment in 2008 (just before the collapse of Lehman Brothers) in the worst economic downturn since the Great Depression. The UFL pulled back in 2008 and did not play until 2009. The league is supposed to announce plans for 2011 by August 15.

By that time only the owners, coaches, players and UFL personnel and their families will be the only ones caring if the league folds or plods through another year.

Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at, Barnes and Noble or amazonkindle.

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