Cuban Spearheads Latest Attempt To Rival NFL

The enormous appetite for football in America shows no signs of waning. The National Football League is a behemoth, and in many blue and red states across the country, college football is a religion. So it should come as no surprise that another group of entrepreneurs has drafted plans to start a professional football league. An investment banker and a former investor in the United States Football League’s Oakland Invaders, Bill Hambrecht, intends to establish the United Football League. In a previous incarnation, a franchise of the same name lasted all of three years, from 1961 to 1964. In this lofty proposal, Hambrecht has joined forces with an executive of Google, Tim Armstrong, and a billionaire National Basketball Association franchise owner, Mark Cuban, whose high profile will either help or hinder the potential success of the fledgling league.Hambrecht and his partners have set a target date of August 2008 for the league’s first preseason game. Yet, as of now, the league has just one owner, and no existing stadium leases, network or cable television deals, though Cuban does own HDNet, a high-definition broadcasting channel.Still, Hambrecht has made one good move. He hasn’t, at least publicly, reached out to Donald Trump. More than anyone else, Trump bears responsibility for driving the USFL into the ground, according to sources that were closely involved with or had knowledge of the USFL, which played three seasons between 1983 and 1985. By insisting the spring league go up against the NFL in the fall, even as he angled for a way to gain entry for his New Jersey Generals franchise into the NFL, the New York real estate developer effectively torpedoed the new league.Hambrecht is keenly aware of Trump’s errors and the reasons for the failure of the USFL all those years ago. It remains to be seen whether he will heed the sage advice of the philosopher George Santayana, who once warned that “those who cannot learn from history are doomed to repeat it.” It’s also worth examining what Cuban has posted about the UFL on his web log, blogmaverick.com, and comparing it with what the organizers of the World Football League in 1973 and the founders of the USFL founders in 1982 had to say on the eve of launching their respective associations.“There is obviously demand for top level professional football. That is exactly what the UFL hopes to be someday, an equal of the NFL, if not more,” Cuban writes. “There are a lot of markets that are bigger than some current NFL markets that do not have teams that would love to have a pro-football team.” He continues: “There are a lot of smart people involved in the UFL. It’s a great TV product.”Those sentiments are not unlike the remarks given by WFL founder Gary Davidson and USFL founder David Dixon. The WFL was comprised of six large market teams created to compete directly with NFL franchises, and six teams from smaller market with populations of less than one million. But the investors in the WFL were under-financed from the beginning (it operated between 1974 and 1975). Each of the initial 12 franchises cost $100,000, with subsequent franchise fees ranging between $250,000 and $1.6 million. Although the WFL did not secure a major network contract, the league did get a television contract with Eddie Einhorn’s TVS network. The presence of the large market teams helped to secure a national television contract that paid each team $130,000 a year, significantly less than the $2.2 million per team negotiated for NFL television contracts that year.A Pro Football Hall of Famer, Ron Mix, briefly served as the general manager of the WFL’s Portland Thunder franchise. Prior to that, Mix had played in all 10 seasons of the American Football League, a professional league that operated from 1960 to 1969. According to Mix, the WFL could have had a major impact on football had the owners shown some fiscal responsibility.“My impression of it is that [the] league absolutely had a chance to become successful, if ever a league did,” Mix said during an interview conducted with this columnist several years ago. “What ruined that league was that individual owners went crazy and started signing players at outrageous [sums], like Larry Csonka I think received $1.3 million to sign. You cannot tell me that if the team had made a drop-[dead] offer of a $100,000 bonus and $100,000 a year, in other words, a couple of hundred thousand, they could not have signed Larry. I know they would have been able to. But they spent the league into absolute bankruptcy when the country was ripe for another thing.”Dixon’s USFL tried to avoid four problems that troubled the WFL. The USFL had not only a spring schedule that would not go headto-head with the NFL, but owners with deep pockets that could withstand losses as the league developed a following and brand. The USFL also landed two-year television contracts, and had better stadiums than the WFL.But the USFL did not stick to its business plan. Although the league founders recommended a salary cap of $1.2 million per team in an attempt to avoid the financial difficulties experienced by rival leagues, they were ultimately unsuccessful in establishing a cap.The signing and escalating salaries of top talent came at a cost to the USFL and its teams, which immediately began accruing debt. A former partial owner in the Boston/New Orleans/Portland Breakers, Randy Vataha, recalled in an interview with me, that the “payrolls were about $15 million a year, and [that of the] NFL was around $6 million to $7 million.” The overall costs, Vataha said, were “$42 million more than we had budgeted.” The losses amounted to an average of $3.3 million per team during the first year of operation, whereas the USFL had only projected losses of $2 million per team for each of its first three years of operation.Vataha said the failure of the league was attributable not to monopolistic actions by the NFL, but to poor management by USFL owners. “The salaries went up, we expanded too fast, and decided to play in the fall. We went out of business.”The made-for-TV XFL never had a chance. As soon as the owner of World Wrestling Entertainment, Vince McMahon, announced his plans in 2000 to create a spring football league, the skeptics were buzzing. Stock in the WWE (previously the World Wrestling Federation), which went public in 1999, plummeted, and many sports reporters forecasted the XFL’s demise before it had even gotten started. The XFL filled nearly enough stadium seats to meet the expectations of its business plan, falling about 10,000 short of its goal of 1 million. But it failed miserably with television viewers and that killed the league because at least 60% of league revenue was to come from advertising sales.Can the UFL work? If Hambrecht finds owners who can stick to a business plan, and subscribe to the one-for-all-and-all-for-one concept of “league-think.” If he looks to the example of Lamar Hunt, who employed a similar principle back in 1959, when he formed the American Football League, the UFL might just find a niche. But there is a lot of football product out there already. It’s going to be a challenge just to get the league off the ground.evanjweiner@yahoo.com

Cuban Spearheads Latest Attempt To Rival NFL

Cuban Spearheads Latest Attempt To Rival NFL

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