Sports Business: Pro Football
Holy Testosterone! The XFL Is Comin' at You
Even with NBC as a partner, can it score where other NFL-wannabes have failed?
Early in his career as a football impresario, Vincent K. McMahon learned exactly what it means to get sacked for a big loss. On Feb. 3, as he was announcing the creation of the Xtreme Football League, investors were nervously cashing out of XFL's parent, World Wrestling Federation Entertainment Inc. (WWFE) By day's end, WWFE stock had plummeted 25%, to $12.31 a share. Says the ever-confident McMahon: "I don't mind people doubting us. We'll just have to prove them wrong."
At this point, McMahon, 55, is doing just that. Eight months after the scared money bailed, the stock has recouped some of its losses, trading at just under $15 a share on Oct. 17. And there are signs that the quirky league, which promises real football with the in-your-face look of McMahon's WWF, may not be such a crackpot idea after all. "We'll deliver the game of football in a way it has never been delivered before," promises Basil V. Devito Jr., president of the XFL and a McMahon lieutenant for 15 years. "It's reality programming wrapped in a sporting event."
Of course, the offbeat XFL poses little threat to the National Football League. But for a league about to sell its first ticket, the XFL is making strides. Signing up NBC in March as a 50-50 partner may be the biggest coup. The network will televise an XFL game in prime time every Saturday night throughout the league's February-to-April season. And NBC's equity stake means it won't lose interest if ratings start out in a funk.
The XFL isn't exactly chock-full of stars. Initially, its eight teams will be stocked mostly with NFL castoffs and players deemed too small or slow to make the grade in other pro leagues. Rosters get filled out during a player draft on Oct. 28. "We don't need to spend huge sums of money chasing Heisman Trophy winners. We'll create our own stars," says McMahon. Still, the league's Chicago franchise raided the NFL Hall of Fame for its coach, Chicago Bears legend Dick Butkus, 57. "A lot of people have asked: `Why be involved? What about your reputation?' My answer is: `What about it?"' says Butkus, who retired as a player three decades ago and has never coached before. "I just firmly believe this thing is going to be successful."
Startup football leagues seldom are, however. The ill-conceived World Football League limped along for two seasons before folding in 1975. A decade later, the promising U.S. Football League went belly-up after two years, in part because owners such as Donald Trump ran up huge tabs to sign stars like Herschel Walker and Doug Flutie.NO BIDDING WARS. McMahon has had his share of headaches getting the XFL airborne. After he announced that the name of the New York/New Jersey franchise would be "Hitmen," the Calgary Hitmen, a minor-league hockey team, threatened to sue. (The XFLers are keeping the name.) And the XFL prematurely announced franchises in Miami and Washington, D.C., only to back away, saying it preferred markets where it wouldn't be competing with the NFL. But the wrestling king has sidestepped most of the usual pitfalls.
One of the biggest of these is payroll. Because the XFL is organized as a single entity, with McMahon and NBC in control of all eight franchises, there won't be bidding wars to sign a prize quarterback. All contracts are for one year. Instead of throwing millions at top talent, the XFL's rigid salary structure will put players in the same income bracket as assembly-line workers at Ford Motor Co. (F) Players will earn base pay of about $45,000 and incentives for each game they start ($500) and win ($2,500).
That pay scale may be meager by NFL standards, but it hasn't kept athletes away. About 1,200 XFL wannabes attended workouts sponsored by the league this summer and fall. And one of the league's eight franchises, the Las Vegas Outlaws, brought an additional 374 players in for private auditions recently. McMahon has given the franchises minimal advice on how to fill the rosters. "All he's told us: `I want team players. I don't want any jerks,"' says Outlaws head coach Jim Criner.
Lower player costs will help, but McMahon's gift as a showman is one of the league's top assets. His WWF shows are outrageous--and to some, offensive. Coca-Cola Co. (KO) and MCI Communications Inc. (WCOM) pulled their advertisements from Smackdown!, citing the program's excessive violence. But viewership among young males hasn't suffered. Last year, McMahon's wrestling programs drew about 50% more viewers than Monday Night Football among male audiences 12 to 24 years old (page 134).
XFL games will be real, say league officials, who promise no scripted endings or masked field-goal kickers. But the carnival atmosphere of the WWF seems to be a model for much about the fledgling football league. There will be plenty of hype at the stadium, for instance. Pyrotechnics and massive Titantron video boards will be part of the spectacle. So will enhanced sound systems that boom grunts from the line of scrimmage into the stands. McMahon even wants the league broadcasters calling the game from the stands, not in a skybox "where they're dining on quiche and sipping Champagne."
The rules of the game are being juiced up, too. Shortening halftime and snipping the play clock to 35 seconds will ensure that games don't spill over three hours. Other tweaks will tune up the violence. For example, punt returners won't be permitted to call a fair catch--a maneuver that allows them to avoid punishing hits. "On a short kick, a guy could get it right under his chin," notes Criner, the Las Vegas coach. Head slaps and permitting defenders to jostle receivers in pass coverage--moves banned by the NFL--are also kosher.
The bone-crunching hits fit with the smash-mouth image to which the league aspires. Even team names have a sinister spin: Along with the Hitmen and Outlaws are teams such as the Memphis Maniax and the San Francisco Demons. But the league will suffer if violence on the field overshadows the game itself, says Doug Allen, assistant executive director of the NFL Players' Assn. "The game becomes a car wreck or a street fight when it gets too violent. People see enough of that in real life," says Allen. Responds McMahon: "We're simply going back to the way things used to be in the NFL, before the accountants and owners ruined it." The sanitizing of the game by the NFL "makes me want to regurgitate," he hisses.
In the XFL, when a helmet gets banged, NBC will be there. The network, which was outbid for NFL TV rights two years ago, is promising a high-tech telecast that captures every grimace. "We are the league. We can go anywhere," says NBC Sports President Ken Schanzer.INSIDE VIEWS. As a part of its deal, the network purchased $30 million in WWFE stock and agreed to cover half the league's operating expenses. But it pays no rights fees for the games and doesn't have to grovel to get access to the sidelines or locker rooms. That should be obvious when XFL play begins: NBC will have microphones on coaches and players--in fact, league uniforms are designed to hold a wireless mike. Cameras will be stationed in the locker room during halftime and on the sidelines. There will be aerial views from above the huddle.
"We tried for years to get the NFL to do this," says Schanzer. "They had concerns about the ball hitting the camera, someone interfering with play. We all thought they were overwrought."
NBC has been hyping the new league for months. Explosive promos--featuring a football trailing flames--have been airing on sports programs, including the Major League Baseball All-Star Game and the Summer Olympics from Sydney. As it plugs the new league, NBC points to modest audience goals: a 4 to 4.5 rating in the first year. On a Saturday night, that would be a world-beater for NBC compared with its slate of shows in recent years. The network's chairman, Dick Ebersol, notes that NBC hasn't had a top 10 smash on Saturday night since the heyday of The Golden Girls.
The XFL and NBC are a long way from scoring a touchdown, though. The league is projecting losses of $100 million during its first two years, with plans to edge into the black in year three, says McMahon. But that assumes it attracts a TV audience and that attendance at XFL games hits the projected figure of 19,000 per game.
Team execs had a leg up as they launched ticket sales this month. Ticket prices are a relative bargain at $25 for a 50-yard seat at most stadiums. And to find its customers, the league can dip into a WWF database of 1.2 million fans and 60,000 more who have registered at XFL.com.
Still, filling seats may be a challenge for the Chicago and New York franchises, especially--XFL teams that play their games outdoors during the coldest months of winter. "The XFL fans will really have to be extreme fans to sit through the snow and sleet," says William A. Sutton, a professor of sport management at the University of Massachusetts. NBC's Schanzer agrees awful weather "could be an issue." But he adds: "Fans are fans. If the experience in the stadium is exciting, they'll come."
The new football league's biggest obstacle may be proving that it's legit. Wrestling fans may not care. But the die-hard pigskin crowd will punt at the first sign that the XFL and McMahon aren't playing it straight. McMahon shrugs off such talk. "I won't convince the fans--the fans will convince themselves," he says. Unless plenty of them buy in, though, McMahon's glitzy league could end up as a very expensive incomplete pass.By Mark HymanReturn to top