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New Professional Football League

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The UFL. I predict this will fail miserably. I also predict that I will play in at least one UFL fantasy league before it does fail miserably.

 

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First and Long — Very Long

 

By JOE NOCERA

Published: June 3, 2007

Bill Hambrecht is a rich old Wall Street guy who has made his money tilting at windmills and disrupting the establishment. “That’s what I do,” he says. “It’s fun.” Almost a decade ago, at 62, he founded WR Hambrecht + Company, whose fundamental premise is that companies don’t need to use Wall Street investment bankers — and pay their outrageous fees — to go public. Hambrecht + Company has since become so threatening to traditional underwriters that they often refuse to be involved in any I.P.O. in which his firm takes part.

 

And now, at an age when most people are well into retirement, he has decided to tackle the establishment again. This time, though, the establishment isn’t Wall Street. It’s the National Football League. Bill Hambrecht, you see, is starting up a professional football league. So far, he and his partner, Tim Armstrong, a senior executive at Google, have pledged $2 million each. They’ve hired a C.E.O. and a C.O.O., both of whom cut their teeth at the National Basketball Association. They’ve got a name: the United Football League. And they’ve lined up a wealthy, well-known businessman as their first owner: Mark Cuban, the billionaire who owns the N.B.A.’s Dallas Mavericks. Like Hambrecht, Cuban loves nothing more than confronting the status quo.

 

Obviously, the U.F.L. is still in the early planning stages. It hasn’t yet hired a single football person and is still hunting for seven more owners with Cuban’s deep pockets and contrarian mindset, so that the league can begin with eight teams. It could easily fall apart before the first kickoff. Indeed, there has already been one setback: Boone Pickens, the oilman turned-corporate-raider-turned-billionaire-hedge-fund manager, recently abandoned his intention to buy a team. But Cuban remains committed, and if all goes according to plan, the U.F.L. will play its first preseason games in August 2008. I kid you not.

 

Hambrecht has been thinking unconventional thoughts about pro football for a long time. Back in the early 1980s, he was a minority partner in the Oakland Invaders, one of the original franchises of the late, unlamented United States Football League, a spring league that played its games during the N.F.L.’s off-season. The U.S.F.L. folded in 1985, after three seasons. “It was started by a bunch of guys who were riding high because of the S.&L. boom,” Hambrecht recalls. “As soon as the boom turned to bust, the league went broke.”

 

Most of us would go through such an experience and conclude, Never again. Not Hambrecht. He was convinced that the U.S.F.L. could have worked with a smarter game plan and owners who were more patient. At various times he discussed a new league with NBC, CBS and Fox, but those talks went nowhere. Then one day last year, Hambrecht told Tim Armstrong, whom he met when his firm helped manage Google’s initial public offering, about his dream of a new football league. The more Armstrong heard, the more excited he got. By October, the two men had committed their $2 million, hired their first three executives (Bill Daugherty, the C.E.O.; Jon Brod, the C.O.O.; and Andrew Goldberg, a senior analyst) and begun an extensive study to see if the idea was really feasible.

 

Let’s now take a moment to consider what the U.F.L. will be up against: a monopolistic sports league utterly unafraid to take advantage of its monopoly power. Over the years, the N.F.L. has squashed four competitors, most recently the NBC- and World Wrestling Federation-backed XFL in 2001. Right now, Arena Football is an alternate league, but it’s a marginal thing, with negligible TV ratings and an average of 12,000 fans per game. And with eight players to a side, games in the N.F.L.’s off-season and a field that looks like a hockey rink, it’s not exactly “real” football.

 

Where others might be daunted by the N.F.L.’s success and power, though, Hambrecht came to believe its monopoly status gave him an opening. “I really started thinking hard about this after the Los Angeles Rams left to go to St. Louis and the Houston Oilers went to Nashville,” he told me over drinks recently. “Why do you leave two of the top 10 TV markets in the country for these two smaller markets?”

 

The answer, of course, is that the N.F.L. doesn’t really have to worry about where its teams are located, since most games are televised and the bulk of the league’s revenues come from its network contracts. What’s more, with the right stadium deal and enough corporate sponsorship, team owners can make as much (or more) money in smaller cities as they can in larger ones. That’s why the N.F.L. does just fine despite not fielding a team in 21 of the country’s top 50 markets — including such enormous metropolitan areas as San Antonio, Las Vegas, Orlando and (of course) Los Angeles. Nor does the N.F.L., which now has 32 teams, have much incentive to expand. On the contrary: expansion dilutes the TV money. (Greg Aiello, the N.F.L.’s spokesman, told me that “expansion isn’t on the table right now.”)

 

So the first step in Hambrecht’s plan is to enter big cities where the N.F.L. isn’t. As Mark Cuban put it to me in an e-mail, “There are quite a few good-sized non-N.F.L. cities that can support a pro team.” So far, the U.F.L. has decided to put teams in Los Angeles, Las Vegas and Mexico City. (Cuban is considering taking the Las Vegas franchise.) Each owner will put up $30 million, giving him an initial half-interest in the team; the league will own the other half. But eventually the fans themselves will become shareholders — because each team is going to sell shares to the public. Then the owner, the league and the fans will each own a third of every franchise.

 

Go to Complete Coverage » Hambrecht and his executives believe that the initial public offerings will raise, on average, another $60 million per team, giving it about $90 million in working capital. They also hope that the stock sale will create intense fan loyalty. “This is going to be a very accessible league,” says Daugherty, the C.E.O. “Fans will own a piece of the team, and they’ll get tickets at more affordable prices.”

 

Hambrecht expects his owners to be wealthy — and patient — enough to absorb losses for up to five years. The league will need a television contract, of course, but its existence is not predicated on a megabucks deal, at least not at first. The U.F.L. is open to making a smaller deal with a cable network like USA, TNT or Comcast’s Versus network (the former OLN). One mistake other leagues have made, Hambrecht believes, is counting on an upfront TV deal — and bringing in owners who expect to make money instantly.

 

One television advantage the U.F.L. will have is Friday night. Thanks to the 1961 Sports Broadcasting Act, the N.F.L. is prohibited from televising games on most autumn Friday nights. (The prohibition was meant to protect high-school football.) Any new league would have televised football all to itself on that evening.

 

A new league’s biggest issue, though, is whether it really can approximate the N.F.L.’s level of play. As Daugherty puts it, “If you don’t put a good product on the field, nothing else matters.” When he first signed on, he and Brod immediately began looking into that question — and they came away convinced they could land decent players right away, and very good players eventually.

 

“Bill Walsh used to tell me that the last 20 players cut from every team were almost interchangeable with the last 20 players to make the team,” Hambrecht says. The new league will hire the best of those last 20 players — along with the best of the Arena players, the Canadian Football League players and so on. Though the U.F.L. will have a salary cap, it will be able to pay those players more than they are making now. It won’t be able to afford to sign marquee names like Peyton Manning or the biggest stars coming out of college, obviously. But the U.F.L. will be able to offer most rookies, who aren’t top draft choices, far more money than the N.F.L. would give them. And since the N.F.L. salary cap has been negotiated with the players’ union, it can’t be unilaterally changed.

 

“The average career of an N.F.L. player is less than four years,” Daugherty says. “They have a huge incentive to maximize their income.” The new league’s officials think they’ll be able to sign players drafted by the N.F.L. in the second round and later. And one former N.F.L. coach I spoke to — who asked not to be named because he didn’t want people to know he had spoken to the U.F.L. — agreed. “They are going to be able to get players and coaches,” he said. “That’s not going to be a problem.” It’s also worth remembering that many late-round draft choices are good football players. Tom Brady, for instance, was a sixth-round draft choice.

 

As U.F.L. executives see it, there has really only been one competing league that took the approach they want to take: the old American Football League. The A.F.L. played “11 on 11” football in the fall, mostly in cities where the N.F.L. did not. Its founder, Lamar Hunt, pioneered the concept of revenue-sharing and built a unified league with the staying power to last nine years before it merged with the N.F.L. That is the model the new league wants to emulate. Whether the ultimate goal is to merge with the N.F.L. or play alongside it — well, that’s the one place Hambrecht wasn’t going to go with me. “We’ll just see how it plays out,” he said.

 

When I asked Roger Noll, a sports economist at Stanford University, whether it is possible to compete with the N.F.L., he laughed, but he didn’t scoff. “The crucial barrier to entry is finding stadiums in the biggest cities,” he replied — something U.F.L. executives insist is not a problem in the places they are considering. “If you can do that, it would be easy to have a league.” Noll pointed out that for wealthy people who want to own a football team, it is far cheaper to start a new league than to try to land an expansion team — which, assuming that the N.F.L. were interested, would cost upward of $800 million. “You need to have enough money to experience losses that will amount to 20 to 30 percent of revenue in the first three or four years,” he said. It’s much cheaper to lose money over that time than to purchase an N.F.L. franchise.

 

When we met, Hambrecht said: “A guy asked me, ‘Why are you doing this?’ ” He shrugged. “I had trouble explaining, except that it made logical sense.” On paper, it does. Whether it plays out that way in real life — who can say? But it’ll be fun to watch. Bill Hambrecht ventures usually are.

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I'll watch it if for nothing else than to get a look at players who might move up into the real NFL & be a possibility for my Dynasty squads.

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Paging Vince McMahon. Vince McMahon. Please pick up the white courtesy phone.

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Paging Vince McMahon. Vince McMahon. Please pick up the white courtesy phone.

 

 

This may give Vince a chance to get back at Trump.

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my guess is it won't be too long before they rethink playing their games in the fall. The NFL has been spreading their games throughout the week more and more. Do they really expect people to watch "minor league football" in between those games and the college games? com'on.

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I hope it works out for them, nothing wrong with more football. but i don’t see how they can claim to be able to sign 2nd round draft picks from the NFL for more money.

 

I think its a smart move to have a team in México city especially with a large Mexican and Latin group of people here in the US. I wonder if they will try to get a team in Canada.

 

my guess is it won't be too long before they rethink playing their games in the fall. The NFL has been spreading their games throughout the week more and more. Do they really expect people to watch "minor league football" in between those games and the college games? com'on.

 

 

 

i think they will have all 4 games on fridays because the nfl can't

Edited by whitem0nkey

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People have tried to compete with the nfl, and every one of those people have failed. These are just more people to add to that list.

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People have tried to compete with the nfl, and every one of those people have failed.

 

No, not everyone.

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I thought the AFL did pretty well. :D

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I thought the AFL did pretty well. :D

 

The AAFC was OK as well.

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the NFL is 4-1 vs rival legues, (AAFC 1946-1949, AFL 1960-1969, USFL 1983-1985, world football league 1974-part of 1975 and the XFL 2001) looking at the trend it looks harder and harder to make the league last.

 

With the football season being only a 5 month season, you have 7 other months to have an alternite season. i think that is a big mistake.

Edited by whitem0nkey

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Okay everybody they are looking for more owners, lets all chip in a buck and buy a team.

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Okay everybody they are looking for more owners, lets all chip in a buck and buy a team.

 

 

 

Dallas Sooners sounds good to me....... :D

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As always it is a nice idea but going H2H against the NFL isn't my idea of a good time. Spring football is good for me. Gives me my fix until the NFL starts in the fall.

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Paging Vince McMahon. Vince McMahon. Please pick up the white courtesy phone.

 

nah, the XFL was the shiznit, but Vince thought "hrmm, instead of continuing to do what the fans like, i can make more money and try to attract my WWF fans as well...EVERYONE WINS!...MARCY..GET THE ROCK ON THE PHONE, HAVE HIM OPEN A GAME.....hey...where did everyone go?"

 

I hope it works out for them, nothing wrong with more football. but i don’t see how they can claim to be able to sign 2nd round draft picks from the NFL for more money.

 

I think its a smart move to have a team in México city especially with a large Mexican and Latin group of people here in the US. I wonder if they will try to get a team in Canada.

i think they will have all 4 games on fridays because the nfl can't

 

I think it's a great move as long as it doesn't go bubble gum. attract the hardcore fans...that's what college does..everyone always says "it's nice because you know it's not about the money, it's about the love of the game" and then the money comes from the nfl of course...

 

 

People have tried to compete with the nfl, and every one of those people have failed. These are just more people to add to that list.

 

 

everyone?

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Okay everybody they are looking for more owners, lets all chip in a buck and buy a team.

 

I was tiniking of starting a league.

Anyone want in? So far Emmanual Lewis and the mail box from Blues Clues are in.

Edited by CarryTheRock

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People have tried to compete with the nfl, and every one of those people have failed. These are just more people to add to that list.

 

 

As others have said, the AFL did pretty darn well. The USFL didn't fail because of the product or lack of viewers. It failed because over 1/2 the owners were tied to S&L's and when the S&Ls started failing in the mid 80's they went bankrupt. The USFL actually had a pretty good product. Think of some of the players they had: Steve Young, Herschel Walker, Reggie White, Doug Flutie, Jim Kelly, Nate Newton, Sam Mills, and Doug Williams. Those guys aren't scrubs. And they are just the ones I can remember off the top of my head, which is pretty damned good considering I was only 11 when the league folded.

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As others have said, the AFL did pretty darn well. The USFL didn't fail because of the product or lack of viewers. It failed because over 1/2 the owners were tied to S&L's and when the S&Ls started failing in the mid 80's they went bankrupt. The USFL actually had a pretty good product. Think of some of the players they had: Steve Young, Herschel Walker, Reggie White, Doug Flutie, Jim Kelly, Nate Newton, Sam Mills, and Doug Williams. Those guys aren't scrubs. And they are just the ones I can remember off the top of my head, which is pretty damned good considering I was only 11 when the league folded.

 

 

Not to mention all the coaches that got opportunities.

 

Tuesday and Wednesday nights. I'm telling you.....TV will love the programming. Advertisers will love the 18-54 yr old male demographic. Vegas will be way up for the action. Mexico City, Los Angeles, Toronto, Las Vegas, Portland, Orlando, Sacramento.....maybe San Antonio or Tidewater....Connecticut? There are all kinds of large markets to get into.

 

If the owners go into it looking at it as a new football league and not as a competitor to the NFL, I believe there is ample opportunity for it to be successful.

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Does anybody watch NFL Europa?

 

 

Naw, I didn't think so.

 

 

 

This idea is stupid. They would never have high enough ratings to guarantee decent television revenue--hell, they would have to PAY the networks to show their product. And they want to give their players comparable contracts to NFL players? How are they going to do that without TV money? Would any of you actually pay NFL prices to go see one of these games?

 

:D Good luck, Mr. Cuban. Hope this minor league thing works out for ya.

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Does anybody watch NFL Europa?

Naw, I didn't think so.

This idea is stupid. They would never have high enough ratings to guarantee decent television revenue--hell, they would have to PAY the networks to show their product. And they want to give their players comparable contracts to NFL players? How are they going to do that without TV money? Would any of you actually pay NFL prices to go see one of these games?

 

:D Good luck, Mr. Cuban. Hope this minor league thing works out for ya.

 

so because we dont watch NFL Europe, we should forget that the AFL, the USFL were relatively successful, and the XFL had many die hard fans until Vince couldn't handle having something not scripted? um...ok

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I would watch it unless it's on in the fall. I watch too much football then anyway.

 

Spring ball. That's where it's at.

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Paging Vince McMahon. Vince McMahon. Please pick up the white courtesy phone.

 

 

We had a fantasy XFL league that year.

 

 

I've always thought that 2nd through 4th rounds picks were underpaid in the NFL.

 

 

 

There are no underpaid players in the NFL.

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the NFL is 4-1 vs rival legues, (AAFC 1946-1949, AFL 1960-1969, USFL 1983-1985, world football league 1974-part of 1975 and the XFL 2001) l

I'd put it at 3-0-2 (the AAFC and AFL being ties), but the 3 wins were pretty well pantsings.

 

The Arena League seems to do well in its niche - if the new league keeps in mind that it is, for all intents and purposes, a "minor league", it should be able to build something of a fan base. Enough to truly compete with the big boys at some point, I don't know...

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As others have said, the AFL did pretty darn well. The USFL didn't fail because of the product or lack of viewers. It failed because over 1/2 the owners were tied to S&L's and when the S&Ls started failing in the mid 80's they went bankrupt. The USFL actually had a pretty good product. Think of some of the players they had: Steve Young, Herschel Walker, Reggie White, Doug Flutie, Jim Kelly, Nate Newton, Sam Mills, and Doug Williams. Those guys aren't scrubs. And they are just the ones I can remember off the top of my head, which is pretty damned good considering I was only 11 when the league folded.

Actually, part of the problem with the USFL (read the book The $1 League, good stuff) was that the founder had a solid business plan in place to slowly build brand recognition and profits, and some of the more flamboyant owners came in and decided to go toe-to-toe with the NFL immediately - mainly to pull and AFL and force a merger.

 

I wish ESPN classic still showed USFL games - the few I watched, the football seemed to be pretty good.

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