With the Alliance of American Football league starting play in February 2019, this will give the second incarnation of the XFL an opportunity to study carefully before their planned launch in February 2020.

Whoever coined the phrase “less is more”never spoke with the leadership of the XFL and AAF (Alliance of American Football) when it comes to gauging the demand for consuming professional football in the United States.

From a pure strategy perspective, it will be fascinating to watch how these leagues will compete against each other as they vie for the hearts, minds and dollars of football fans at a time of year where we are conditioned to stop watching live football.

Diminishing marginal utility be damned.  First-mover advantages will be tested.  Sequential games of business strategy will ensue.

Ultimately, we’ll see if the XFL’s decision to play mostly in significantly larger markets will trump the AAF’s decision to “start first” (in 2019) while picking markets where there are greater voids in live sporting entertainment for those local fan bases.

Assessing the AAF’s Strategy

To start a sports league from scratch, and especially in a sport where there is considerable coverage and content between August 1st and early February, you have to (1) choose your markets wisely, (2) be innovative with how you produce and deliver the content, and (3) have strong leadership at the league-level…which may include the ability and willingness to infuse significant capital resources.

Upon reviewing the 8 inaugural AAF teams, their site-selection strategy is fairly clear:

– Select markets which currently don’t have an NFL team (to avoid direct local competition for fan and corporate dollars), but have a passion for football (high regional avidity born from college football allegiances);

– Select markets with a paucity of other professional sports teams, thereby further increasing the likelihood of local fan and corporate support.

Indeed, 6 of the teams fit this description (throughout the article I reference census data of the largest Metropolitan Statistical Areas in the United States):

– Birmingham (49th largest MSA with population of 1.15 million) has no professional sports teams, but is smack dab in the heart of college football country;

– Salt Lake City (48th largest MSA with population of 1.20 million) has 2 professional sports teams (NBA’s Jazz and MLS’s Real Salt Lake), is home to the Pac-12’s University of Utah, and of course is only 40 miles from Provo which is home to the legendary BYU football program;

– Memphis (42nd largest MSA with population of 1.35 million) has 1 professional sports team (NBA’s Grizzlies), and with a college football program at the University of Memphis plus being in SEC country (Tennessee), there would appear to be an appetite for spring ball in Memphis;

– San Antonio (24th largest MSA with population of 2.47 million) has 1 professional sports team (NBA’s Spurs), but is located in Texas where the demand for football seems insatiable;

– Orlando (23rd largest MSA with population of 2.51 million) has 2 professional sports teams (NBA’s Magic and MLS’s Orlando City FC), and is also located in a football-crazed state (Florida) and in a city home to America’s current college football darlings from the University of Central Florida;

– San Diego (17th largest MSA with population of 3.34 million) has 1 professional team (MLB’s Padres), and was formerly home to the NFL’s Chargers before they moved to Los Angeles in 2017.  Thus, it’s safe to assume they still have an appetite for professional football.

Thus, the average (median) MSA population for these 6 markets is 2.00 (1.91) million.

The other two markets (Atlanta and Tempe/Phoenix) are obviously much larger in size relative to the rest of the league (9th and 11th in MSA, respectively…with Atlanta at 5.88 million and Phoenix at 4.74 million).  While these markets have significant competition for the sports entertainment discretionary dollar (Atlanta has teams in the NFL, MLB, NBA, NHL, and MLS…while the greater Phoenix area has teams in the NFL, MLB, NBA, and WNBA), they are also located in parts of the country where football is especially popular.

From an innovation standpoint, both leagues realize they need to stand apart from the NFL game without feeling too gimmicky.  With the AAF starting in less than 2 months, they have announced wrinkles they plan on adopting to create product differentiation, including:

    ▪    Telecasts will feature no television timeouts and 60 percent fewer commercials, with the league aiming for an approximate real-time game length of 150 minutes, down from just over 180 in the NFL.

    ▪    All teams must attempt two-point conversions after each touchdown; there will be no extra point kicks.

    ▪    There will be no kickoffs.  Halves, overtime periods and after scores will begin on each team’s own 25-yard line, the same as touchbacks in the NFL and NCAA. In lieu of an onside kick, a team can keep possession of the ball by attempting a scrimmage play from their own 35-yard line and gaining at least 10 yards.

    ▪    The play clock will run only 30 seconds, 10 seconds shorter than in the NFL.

    ▪    Two coach’s challenges per team are the only replays; no challenges in last two minutes of either half nor any overtime period, as they are automatic.

    ▪    Outside organizations will handle head-safety protocols.

From a leadership standpoint, it’s hard to argue against the “brand equity” of the names involved with the AAF.  The co-founders are Charlie Ebersol and Bill Polian.  Ironically, it was Ebersol’s father (Dick) who partnered with Vince McMahon on the original incarnation of the XFL almost 20 years ago in the league’s only season in 2001.  

With Ebersol’s media production expertise coupled with Polian’s football expertise (long-time GM who worked with Buffalo, Carolina, and Indianapolis before being inducted into the football Hall of Fame in 2015), there is certainly knowledgeable leadership for the on-field product and event production.  Furthermore, the league was wise to recruit well-respected former NFL players to play key advisory roles within the league (e.g. Troy Polamalu, Jared Allen, Hines Ward, Justin Tuck).

The other issue of note is one of timing.  AAF starts on February 9th, 2019…one year ahead of the XFL.  The benefits of being a first-mover in this instance is the ability to begin the process of brand building one year ahead of your competitor.

However, and thinking in the context of what game theorists describe as a “sequential game” (not unlike chess), the XFL will have a chance to learn from the AAF’s inaugural year.  What worked, what didn’t work…and then subsequently tweak their marketing, presentation, and on-field strategies to incorporate the AAF’s “best practices” while also learning from the AAF’s first-year missteps.

And with only a one-year lag between the start of each league, this really doesn’t allow the first-mover effects to take the same stranglehold over consumers  and corporations as it would if the gap were longer.

Assessing the XFL’s Strategy

Since the AAF is the first-mover in this pigskin play, I was fascinated to see what approach the XFL would follow from a site-selection process.

Would they, too, place teams predominantly in mid-sized markets devoid of NFL teams and with few other pro sports competitors?

Or would they pave a different path by selecting large markets – irrespective of the presence of other pro sports teams including the NFL – that (a) hopefully have large enough populations of avid football fans to draw from and (b) would likely generate more media revenue from eventually TV packages (given the historical correlation between market size and media value of sports content).

When the XFL announced their 8 markets on Wednesday December 5th, we got our answer.

With teams in New York, Los Angeles, Dallas, Houston, and Washington, the XFL has secured 5 of the largest 6 MSAs in America (only omitting #3, Chicago).  The average (median) MSA population of these markets is 10.84 (7.4) million.

That’s more than 5x of the average, and roughly 4x of the median.

The remaining 3 XFL markets are Seattle, Tampa Bay, and St. Louis:

– Seattle (15th largest MSA with population of 3.57 million) now has professional sports teams in 5 leagues (WNBA’s Storm, MLS’s Sounders, MLB’s Mariners, NFL’s Seahawks, and just received an NHL expansion team), and is home to an NFL team with extremely loyal fans;

– Tampa Bay (18th largest MSA with population of 3.09 million) has 2 professional sports team (MLB’s Rays and NFL’s Bucs), but is positioned in the football-crazed Southeast;

– St. Louis (21st largest MSA with population of 2.81 million) has 2 professional sports teams (MLB’s Cardinals and NHL’s Blues), has twice been home to NFL teams (Cardinals, Rams), and is only 1 of 3 markets inside the nation’s largest 21 MSAs (along with Riverside CA and San Diego) who do not have an NFL team.

Of these remaining teams, the average and median MSA population (3.16 million and 3.09 million, respectively) is more than 50 percent larger than what’s true for 6 of the 8 AAF markets identified earlier.

While the XFL has been relatively silent about specific tweaks they will implement to differentiate themselves from both the NFL and AAF(which is strategically shrewd, as they don’t want the AAF to adopt their ideas…thereby rendering them passe), the XFL website states “We plan to minimize idle time and speed up game time. We will increase on-field action. We are going to create in-game rhythm and flow. And we are going to use tech and insight to improve player safety, wherever possible.”

Again, I believe strongly in this particular instance that the XFL benefits greatly from seeing how the AAF addresses both on-field dynamics as well as off-field business practices. 

Separately, a big reason why the XFL is poised to succeed stems largely from their leadership.  You would be hard-pressed to find a more experienced and respected leader than Oliver Luck.  With McMahon hiring Luck as the XFL’s Commissioner, this alone proved a different tack exhibited by the WWF’s creator relative to the league’s failed efforts in 20o1.  With prior leadership roles in NFL Europe, MLS, major Division I college athletics (AD at West Virginia), and most recently an EVP of Regulatory Affairs at the NCAA, Luck has all the requisite leadership acumen to make me a believer that the XFL will be far more successful than its 2001 incarnation.

Couple Luck’s skill with the resources McMahon is investing in the league, that’s a formidable combination.  ESPN reported in June 2018 that McMahon was prepared to invest $500 million into XFL 2.0 over its first 3 seasons.  To my knowledge, the AAF has not made any such public statements as bold as McMahon’s in terms of capital commitments dedicated to launching their league.

Furthermore, the XFL’s advisory team is also full of well-respected industry veterans, like former coaches Jim Caldwell and John Fox, and former NFL and CFL quarterback Doug Flutie among the headliners.  With others like Josh Kosner, Kevin Guskiewicz, and Bill Squadron contributing their business operations and management insights to the league’s strategic vision, the XFL (like their AAF colleagues) has left no stone unturned on the advisory front.

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Do I think both leagues have a chance of being successful?  I actually do, at least for the first 3 years.  That said, it’s hard for me to believe that, eventually, diminishing marginal utility among football fans/corporations will eventually sink in.

That said, if I had to guess which league would be the “survivor” if only one were to survive, I’d say the XFL…because it’s more likely to generate larger media and corporate dollars given the market sizes of the teams in as compared to the AAF, and because the league’s founder, McMahon, has an estimated net worth of $3.8 billion and is prepared to invest considerable capital into ensuring that XFL 2.0 doesn’t fall flat on its face the way XFL 1.0 did.

However, don’t be surprised if these leagues merge within the next 5 years.  If not a full merger, then an absorption of 3-4 teams while the weaker league folds.

Source: Forbes

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Oliver Luck, Commissioner of the XFL sits down with Brian Berger at the Sports Business Radio Road Show presented by Boingo at The Players’ Tribune in New York City in front of a studio audience of students from Montclair State University’s School of Communication and Media as well as invited guests for an in-depth conversation.

Luck discusses the XFL, which will launch in February of 2020, including the cities that will have teams, rules for XFL games, broadcast and OTT partnerships, salaries for XFL players and structure for the league and teams.

Luck also discusses his past roles with NFL Europe, the Houston Dynamo, Athletic Director at West Virginia, Executive VP with the NCAA and as an NFL QB for 5 years with the Houston Oilers.

Oliver Luck also talks about his relationship with his son, Indianapolis Colts star QB Andrew Luck.

Source: Sports Business Radio

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The Seattle Time put out an article today outlining the XFL coming to Seattle and goes over some frequently asked questions from their readers. You can read the key snippets below:

Will WWE be a big part of XFL again?

No, and that is something the league is trying to make very clear. In 2001, the WWE (World Wrestling Entertainment) and NBC were co-owners of the league, and there was a big WWE influence, from the controversial scantily clad cheerleaders, to the rougher play with fewer rules and with WWE personalities as part of the broadcasts. None of that will be part of the reboot.

WWE Chairman and CEO Vince McMahon is the sole funder of the venture and will own all eight teams, under the arm of Alpha Entertainment, which he reportedly started from the sale of WWE stock worth about $100 million.

“We aren’t going to have much of what the XFL had, including the cheerleaders, who aren’t really part of the game anymore,” McMahon said recently as he announced the new league. “The audience wants entertainment with football, and that’s what we are going to give them.”

But they aren’t going to give them the opening scramble, where two players would scramble after a football placed at midfield to determine who got the ball first.

Who will the players be?

It will be a mixture. Expect a lot of players who came close to making an NFL team but were cut at the end. This could be another chance to impress NFL teams. The XFL will also lure players trying to get back into the NFL, and names like former Heisman Trophy winners Johnny Manziel and Tim Tebow are being mentioned.

The quality of play was poor in 2001, in part because teams didn’t have time to properly prepare as the league was rushed into existence. This time, there’s an extra year to prepare, and the league knows it can only survive if the quality of play is good.

One thing the league won’t be is a place for players with criminal records. McMahon said that will be a nonstarter.

What other cities have teams?

New York, Washington D.C., Los Angeles, Houston, St. Louis,  Dallas and Tampa Bay.

How will it be different from the NFL?

The football will essentially be the same when it comes to the basic rules. But the XFL is looking at a handful of innovations, many dealing with speeding games up. McMahon said earlier this year he would like to see games played in two hours. Expect shorter play clocks and — this is a guess — maybe a running clock after incompletions.

When will Seattle gets its coach?

Coaches and quarterbacks are expected to be signed in the first quarter of 2019. Interviews for front-office staff have already begun.

Who is the league’s commissioner?

Oliver Luck, father of Indianapolis quarterback Andrew Luck, who has a long background in football and administration. Oliver Luck, a former star quarterback at West Virginia, was athletic director at West Virginia from 2010-14 and president and general manager of the Houston Dynamo of MLS from 2005-10. The past four years, Luck was the NCAA’s executive vice president for regulatory affairs

How many games will teams play?

There will be a 10-game season, followed by two weeks of playoffs.

Where will the team play?

CenturyLink Field.

Can I buy tickets now?

Season tickets can be reserved with a $50 deposit for each seat on the league’s website at XFL.com.

Will the league succeed this time?

That’s a question I can’t answer, but it seems much more likely than last time as the preparation is so much better. A couple of big questions: Will people watch football year round, and even if so, how will the XFL compete with the eight-team Alliance of American Football, which begins in 2019?

Source: The Seattle Time

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The XFL’s Commissioner, Oliver Luck, joined the “It’s Mike Jones” Podcast to talk about what we will see with the XFL brand of football, why D.C. was a no-brainer city to get a team, Audi Field, how the coaches / players will come to each team, the schedule of games and more!

Source: It’s Mike Jones Podcast

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The Official XFL YouTube Channel posted the following video detailing the steps they’re taking to make the new XFL a safer game. 

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The official XFL YouTube channel posted the following video detailing the insights they learned during the mock games they recently held. 

Watch the full video:

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CEO and Commissioner Luck joined Tampa Bay’s Morning Blend to discuss the state of the new XFL. Among the regular details we’ve heard in recent weeks, Luck mentioned team names, colors and logos are coming in Q1 2019. 

Watch the full interview:

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Oliver Luck sat down with Cheddar to discuss the details of the “NEW” XFL. Commissioner and CEO Luck told Cheddar the league will succeed because it’s “much more knowledgeable about issues with football, particularly brain health,” and that there is a “deeper pool of competent players.”

• Luck explained that the XFL’s strategy is to appeal to die hard football fans, NFL season ticket holders, and people who regularly watch but don’t have football to consume during the off season. He says that they have the next year to create the most crisp, quality version of their product and to obtain players that they think will succeed.
• Luck says that they want to sign college football players that just barely don’t make the cut in to the NFL, whether it’s because they’re too small, too short, or too slow.
• He said one of their main focuses for linear success is broadcast and cable exposure. They’ll be announcing powerful partners in those fields within the next couple weeks.
• Luck said, with XFL as a startup, filling the stadiums and obtaining season ticket holders is the most important place to start. They plan to use the same traveling and marketing strategies that WWE uses with Wrestlemania, Raw, and SmackDown Live.
• He confirmed that fantasy leagues, betting, and mobile wagering will all be available through the XFL, likely through a platform they’ll supply.
• Luck said the XFL will be a more up-tempo, physical game of football and they will be modifying upwards of a dozen rules, a few of them being major deviations from the current NFL rule book.

Watch the full interview below:

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