Monday, June 24, 2013

The new USFL --- why it will likely fail despite lots of good ideas and good people

I read a very interesting article on the latest effort to start a second incarnation of the very popular United States Football League.

The original USFL lasted for 3 years but boasted a number of players who went on to be Hall of Fame NFL players.  Guys like Reggie White, Jim Kelly, Keith Millard, Steve Young and others were USFL stars long before they played a down in the NFL.

The rights to the USFL brand and those of it's member teams were apparently acquired by a gentleman named Michael Dwyer.  From 2009 to 2011, Dwyer had a site up trumpeting a imminent return of the USFL.  He had allegedly recruited a number of former USFL players as advisers.

Over that 3 year period, a number of USFL fans called Dwyer a charlatan and a liar.  This may have been grossly unfair.  It is entirely possible that the existence of the UFL thwarted a legitimate effort by Dwyer to attract the minimum number of owners needed in order to get his USFL off the ground.

It appears that over the last year a group of investors have convinced Dwyer to convey the rights to the USFL brand to them.  (This cabal apparently did not see a need to acquire the right to the team names from Dwyer as well.)

The Boston article linked above is based off an interview with Jaime Cuadra, the president and CEO of this 3rd incarnation of the USFL.  One cannot help but admire the passion of Cuadra, but success may very well elude him --- with what we know of his plan.

This new USFL sounds much more like the recently defunct UFL than the old USFL.  That's a big problem.

At the start they want this to be a nationwide, small lineup, minor league.  They want to be the XFL or UFL. That is going to be nearly impossible to market and very tough to grow.

The main difference between Cuadra's plan and that of the UFL is that this USFL will be playing in the spring.  That will give a bump in attendance numbers, but I suspect it won't make fans care enough about a UFL v.2 for the league to make it.

And the article seems filled with fishy or off putting concepts.

The article states the new USFL has real estate interests associated with them who plan to build 25,000 seat stadiums at costs up to $500 Million in order to create lucrative communities around the stadiums.  That seems a little crazy to me.

Why not build a 40,000 seat stadium for $100 million at each target site?  That would still make for fantastic, revenue generating stadiums at a much smaller price.

But $500 Million stadiums for teams that cost $1 Million?  The numbers just seem way out of whack.

Now this kind of buildup around sporting arenas and stadia has become fairly common, but you are talking about a capacity that is kind of small and would likely only be filled to near capacity 7-10 times a year.  Now maybe if the stadium could host a USFL and a Major League Soccer team, OK.  But for now, I'll believe it when I see this particular element of the plan move past the planning stages.

The markets mentioned --- Connecticut (Hartford), Southern California (one would think probably LA), Texas (probably Austin and /or San Antonio), Louisiana (probably New Orleans or Baton Rouge), Alabama (probably Birmingham or Mobile) and Ohio (probably Columbus) --- do not seem to paint the picture of a media relevant league. Memphis, Omaha, and OKC are other candidates cities mentioned in the article who also would not appeal to broadcasters.

In this way the new USFL falls far short of the original. And to my thinking that is a real problem.

Finally, as I mentioned above, the USFL is charging $1M per franchise.... With a requirement that USFL owners prove they have access to $6.5 Million in ready cash to run the team for a year.  That seems like wrong thinking to me.  Getting in with minimal outlays seems to be courting trouble. 

My suspicion is that the UFL hangover in ownership circles has steered the league to take this path in order to entice people in. 

I think it is wrong thinking.  The WFL failed in large part because teams were under capitalized and their owners paid their bills out of available cash rather that properly budgeting.  The USFL v.1 required the opposite (with the exception of Clinton Manges's San Antonio Gunslingers).  Manges's team was one of the least financially stable teams in the league.

We will see how many of this new USFL's owners decline to spend that $6.5 Million when the time comes.


I was equally unoptimistic of the UFL's odds at a similar point in their launch.  This plan, like that one, hits me as a lot of good people lighting a ton of their money on fire. 

I think it would shock most NFL fans, but to me, the NFL is actually extremely vulnerable to competition today to a competing league with a good plan.  This incarnation of the USFL does not want to compete... And I personally do not think much of their plan. 

I want to see another pro league.  Wealthy people who are passionate enough to put their money up to build a football league are the required building blocks for such a league.  That is a limited pool of investors.  Every failed league shrinks that pool even more.

Should fans of the idea of a competitive league cheer for the arrival of USFL v.3 ...or hope it never materializes?

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