NFL, Media Partners Give New Spring Football League a Chance

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NFL, Media Partners Give New Spring Football League a Chance

The NFL season is over. But football returns on March 30th when the inaugural United Football League (UFL) season kicks off. The spring league was formed following a merger of the XFL and USFL.

There is little reason to get distracted by the specifics of which league ‘won’ the mash-up. The deal’s spirit was meant to be symmetrical.

Its significance isn’t about that, anyway. The merger is noteworthy became it brings together the NFL’s two biggest media partners –Fox and ESPN (the two companies also dominate the CFB distribution landscape)– in support of a single spring football league.

Eric “Shanks is one of the best sports programmers in America and both ESPN and FOX clearly have a strong strategic relationship with the NFL,” Gerry Cardinale (founder and managing partner, RedBird Capital Partners) said. “You put that together with Dwayne Johnson, Dany Garcia, and us, and you can see how this works.”

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Spring football has failed time and again. So, there’s certainly no guarantee the UFL ‘will work’. But this league does appear to be the most viable attempt at it in decades. 

The path to building a sustainable spring league undoubtedly includes an association with the National Football League. The XFL had one, and the UFL will assume its player development, rules, and innovation-focused partnership with the league. 

The combined spring entity should also benefit from having the NFL’s two biggest broadcast partners at the table (think: exposure/promotion across FOX, ABC, and ESPN).

"Everything starts with ownership and we are blessed to have a dynamic and committed group with world class skill sets,” Russ Brandon (CEO, UFL) said.

Cardinale, Johnson, and Garcia chose to pursue a centralized ownership model after buying the XFL out of bankruptcy in ‘20. The trio planned to establish terminal value in the league before they would consider selling franchises later. 

The XFL looked to be building fan bases in a couple of its local markets, and one could argue it was outpacing the USFL at a league level (see: ratings). So, it’s fair to wonder why Cardinale, Johnson, and Garcia agreed to a merger.

But their goal was never to best another spring football league. It was –and remains– to become the fifth most valuable sports property in America.

It was also evident the marketplace does not need two competing leagues. Fragmentation contributed to staggering losses across both of them. The two sides are collectively in for several hundred million dollars to date.

A merger “is probably the best thing that could have happened for both leagues,” Daryl Johnston (football operations lead, UFL) said.

Had it not happened, one of the two would have eventually fallen.

The UFL is projecting to reach break-even within the next year or two. The league’s financial profile is supported by signing a meaningful media rights distribution deal with FOX and ESPN.

Leadership is not concerned about how the shrinking pay TV universe might impact market dynamics. 

“We’ve got plenty of upside given that [it is football and] the scale of our business is in kind of that sweet spot,” Kevin LaForce (managing director, RedBird Capital Partners) said. “On broadcast, we have already proven our ability to reliably get audiences north of a million across most of our games, and we think that will grow going forward. Not many properties can do that–especially at launch.”

The league also won’t be looking for billions of dollars annually.

The key to the UFL’s success may ultimately be its ability to attract outside capital. Football is expensive, even for a pair of deep pocketed backers, and both leagues have struggled on that front to date (in part, because of the competition between the two).

It remains to be seen if the NFL will back the combined enitity and make it a true minor league (i.e. shuttle players back and forth), or if the UFL decides to sell franchises as it flushes out its local market strategy.

“I think that we're going to find ourselves in a market where there's going to be a number of suitors to [purchase teams],” Johnston said.

Vending the spring league into TKO could eventually become an option too. Remember, Johnson is now on the company’s board. 

Those last two paths are not mutually exclusive, by the way. The UFL could, in theory, sell some franchises now and still achieve a large-scale exit down the road.

The NFL or its owners could even be the buyers.

They’re “circling above watching to see how we do,” Johnston said.

RedBird and the league have partnered on several successful endeavors prior (including, On Location). So, the track record, relationships, and credibility needed to make a leap of faith would seemingly exist.

Losses aside, RedBird was pleased with how the ’23 XFL season went. It felt the on-field product and linear game distribution (see: 8 games on ABC, 35 games on ESPN) were representative of a premium sports property.  

And it believes the data confirms a demand for spring football exists, both on television and in some of the local markets. XFL games on free-to-air broadcast drew an average of 1.2 million viewers. Those on cable drew ~640,000.

Fans turned out at the stadium in several XFL cities too. St. Louis averaged 35,000+ fans/game and Washington D.C. started to draw upwards of 20,000 late in the year.

The USFL didn’t fair quite as well on TV, but its games helped to reinforce the narrative that there is an insatiable demand for football in this country (see: record NFL and college football ratings). The Fox-backed league averaged 970,000 viewers on NBC and 725,000 on FOX. Viewership dipped below 300,000 when league games moved over to cable.

Still, “if you stacked them all up and compared them against the rest of the sports marketplace, [spring football] proved to be [viable],” La Force said.

And that was with two leagues causing confusion, and likely some dilution, amongst fans in the marketplace. The UFL hopes with a singular focus on one league and steady stream of promotion it can build to an audience of between 1.5-2 million viewers/game.

The average XFL game was played in 2:49 minutes (~23 minutes shorter than the NFL product). But pace of play was just one of several factors that helped to create a positive local live event experience. 

The league wisely chose to play in smaller confines (think: 17,000-25,000 seat venues versus NFL stadiums) and priced its tickets to be affordable.

“When you can show up with your two kids and buy $25 tickets, and it’s a high-quality professional product, that’s a great value proposition for those families,” La Force said. 

The league was also successful in marketing and selling the experience in certain markets (see: beer snakes in D.C.). The UFL plans to take what worked across the XFL and USFL and improve on those best practices. 

“You bring [them all] together [and] the potential for you to have sustainability is amplified multiple times,” Johnston said.

The combined league will have eight teams operating from a single hub but playing in local markets during the ‘24 season (D.C., St. Louis, Arlington, Houston, and San Antonio, Birmingham, Memphis, and Detroit). The plan is to expand to ten clubs next year.

Cities without big four team saturation, east of Texas (scheduling made Seattle a challenge), with a strong facility are going to get the first crack. The league will also consider television DMA size and local weather during the months of February and March (if playing outdoors) when making expansion decisions.

If all goes right, more markets will follow and the UFL’s vision of becoming a top five sports property just might become reality. But the two leagues –and their media partners– had to come together first.

“We’re hoping the whole is greater than the sum of its parts,” Johnston said.

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