Death of the Alliance of American Football

[Gothamite]

11 minutes ago, dfwabel said:

Again, I'm claiming that McKay wasn't lying.

 

Oh, I don't think he's lying.  I just think he's delusional. 

 

They're not going to get 30-40,000 people per game.  Which means he's going to need television revenue to fund this little venture.  So either delusional, or not actually serious about this.

[Sykotyk]

The other problem is that with games ONLY on their app and CBSSN, there's going to be so much in advertising to get people to watch. Football, and professional sports, is supposed to be the other way around. When talk of the new XFL included possible internet streaming, the thought was things like Twitter, Amazon, YoutubeTV, Hulu, etc. NOT, just creating an XFL app and hoping people download it and then watch it.

 

This sounds more and more like the UFL.

[dfwabel]

29 minutes ago, Sykotyk said:

The other problem is that with games ONLY on their app and CBSSN, there's going to be so much in advertising to get people to watch. Football, and professional sports, is supposed to be the other way around. When talk of the new XFL included possible internet streaming, the thought was things like Twitter, Amazon, YoutubeTV, Hulu, etc. NOT, just creating an XFL app and hoping people download it and then watch it.

 

This sounds more and more like the UFL.

Streaming company NeuLion being bought by Endeavor (fka IMG-William Morris) is unlikely to help their overall costs, unless they partner with FloSports, but they're not very reliable and seem to be scammy.

[Mac the Knife]

On 3/29/2018 at 9:23 AM, Gothamite said:

 

They're going to try to do this on ticket sales?  Yikes.

For every league except the NFL, it's about ticket sales - putting butts in seats.  The NFL is the only league, on Earth, that doesn't have to place a high level of emphasis on ticket sales, thanks to the massive amounts of TV revenue they receive. 

 

On 3/29/2018 at 10:31 AM, dfwabel said:

Again, I'm claiming that McKay wasn't lying.

I've long been skeptical of each of these attempted ventures and this is no different. The fact that in their opening press conference, Ebersol expressed that in order to drive the live gate that the concession prices would be low told me that nobody in his circle knew how that side of the business worked and a stadium board/municalpity already in a concessionaire agreement isn't likely to change terms just for the AAF. The Falcons did it because they run the stadium and helped write the term sheet with Levy.

Yeah, I noticed that as well.  Neophytes don't understand that, unless you really have made some kind of special arrangement, the best you're going to get is a percentage of the net profit generated by food/beverage concessions, a portion of parking revenues, and exclusivity in terms of team merchandise sales on gamedays.  You're not going to dictate pricing to anyone unless you're the one actually providing the concessions services, and that's not a business that any professional sports franchise operator wants to be in because (i) it's a huge distraction from everything else you're trying to do, (ii) odds are you have zero expertise in doing it, (iii) the start-up and operations costs are incredibly high, as is true with any sector of the food service business, and (iv) the gameday logistics involved are simply staggering, and if you're operating a team you've got enough going on than to worry if 4,500 hot dogs made it to the concession stand on concourse D.

 

1 hour ago, Sykotyk said:

The other problem is that with games ONLY on their app and CBSSN, there's going to be so much in advertising to get people to watch. Football, and professional sports, is supposed to be the other way around. When talk of the new XFL included possible internet streaming, the thought was things like Twitter, Amazon, YoutubeTV, Hulu, etc. NOT, just creating an XFL app and hoping people download it and then watch it.

 

This sounds more and more like the UFL.

I don't think these guys are going to be in as good a shape as the UFL was coming out of the gate... and that's saying something.  The people behind the UFL actually kinda, sorta knew what they were doing, and still managed to burn through so much money that they could only afford to start with 4 (or was it 5?) teams playing a simple double round-robin season; and from that point on, plans changed as financial circumstances permitted them to.  How they burned through that much money?  I'd really like to know.  But they did.

 

I think both AAF and XFL are missing the "loss number" they're going to have to put up with to get through year one.  XFL lost $70 million in year one, but that was two decades ago and operating on a comparative shoestring compared to what a "real league" (e.g., USFL) had tried before.  I think if these guys aren't each prepared - seriously prepared - to burn through a quarter billion dollars a year for each of the first three years?  They might as well just stop right now, say "mea culpa," and slink off the stage. 

 

Because what each are going to try to do is not going to be accepted by football fans in the way they're expecting.  Instead of football fans saying, "Hey, this technological aspect was innovative" or "Hey, I like the ability to play fantasy football on a play-by-play basis," or even if they'll be able to say, "Hey, I like the idea that I can plunk down a $20 wager online as to whether my team's going to cover the spread through the AAF/XFL website?"  They're going to have fans saying, "Hey, the quality of what's on the field sucks, and it's not worth paying attention to," and no amount of technogimmickry is going to balance that out.

[Gothamite]

6 hours ago, Mac the Knife said:

For every league except the NFL, it's about ticket sales - putting butts in seats.  The NFL is the only league, on Earth, that doesn't have to place a high level of emphasis on ticket sales, thanks to the massive amounts of TV revenue they receive.

 

But no professional league can do it without television.  They might not be fully funded in the way that the NFL is, but they still receive a decent proportion of their operating funds from the television contract.

 

To try and launch a professional league without television money is... insane.  Stupid.

[dfwabel]

2 hours ago, Gothamite said:

 

But no professional league can do it without television.  They might not be fully funded in the way that the NFL is, but they still receive a decent proportion of their operating funds from the television contract.

 

To try and launch a professional league without television money is... insane.  Stupid.

Rivals Professional Football League apparently does it; wait, that seems to still semipro even with the promise of a 4 year/$255K contracted to the overall #1 draft pick.

[Mac the Knife]

6 hours ago, Gothamite said:

 

But no professional league can do it without television.  They might not be fully funded in the way that the NFL is, but they still receive a decent proportion of their operating funds from the television contract.

 

To try and launch a professional league without television money is... insane.  Stupid.

 

You know, up until the past year or two, I'd have agreed with that.  But I can now at least envision a time when a top-tier pro sports league can operate without seeing a single dollar from a traditional terrestrial/cable/satellite television network.  That day's not here yet.  But it's coming.  And it's going to be here sooner than a lot of people expect.

[Gothamite]

9 minutes ago, Mac the Knife said:

You know, up until the past year or two, I'd have agreed with that.  But I can now at least envision a time when a top-tier pro sports league can operate without seeing a single dollar from a traditional terrestrial/cable/satellite television network.  That day's not here yet.  But it's coming.  And it's going to be here sooner than a lot of people expect.

 

But even so, you’re talking about replacing television money with some other kind of media money like streaming rights.  Not about ignoring it altogether.

[Mac the Knife]

No, of course not.

 

I might be wholly wrong about this, but I think the NFL's in for one helluva rude awakening when their current TV deals start being renegotiated.  They may wind up with an uptick in overall revenue when all the tallies are in, but I think there are a lot - and I do mean a lot - of other pro sports leagues that are just licking their chops at the prospect of cutting into the NFL's monetary pie.  And unlike in the past, this time the network's are going to consider giving it to them.

[dfwabel]

1 hour ago, Mac the Knife said:

No, of course not.

 

I might be wholly wrong about this, but I think the NFL's in for one helluva rude awakening when their current TV deals start being renegotiated.  They may wind up with an uptick in overall revenue when all the tallies are in, but I think there are a lot - and I do mean a lot - of other pro sports leagues that are just licking their chops at the prospect of cutting into the NFL's monetary pie.  And unlike in the past, this time the network's are going to consider giving it to them.

But when? FOX just threw another $500M at them for Thursday night and will likely bid for Monday Night Football since they've got nothing else.

[Mac the Knife]

2 hours ago, dfwabel said:

But when? FOX just threw another $500M at them for Thursday night and will likely bid for Monday Night Football since they've got nothing else.

 

But what's actually happened there?  The NFL sold more of its programming content - further overexposing its core product - for that money.

 

You now have a situation in which Thursday night games are to air on Fox, Sunday games air on CBS and Fox, Sunday night games air on NBC, and Monday night games air on ESPN (which is, de facto, ABC).  Every major terrestrial network is already at the dance.

 

Now if CBS suddenly wants to give up their current AFC slate in favor of the Sunday night package NBC holds, there'll be some battling there and the numbers could rise appreciably.  But you also have a pissed off ESPN paying $1.9 billion for the right to air a lousy slate of Monday night games that, had they known what they were getting back then, would'nt have paid 2/3rds that much for.

 

So to review...

-  ABC (through ESPN) is either going to demand better games, or pay less for them.  Either way, no substantive rights fee jump there.

- CBS is happy with the AFC package, and that everyone else is fine with their spot in the landscape.  So no big jump comes from the Tiffany Network.

- Fox may lose the Thursday night package to some online distributor who overpays for the privilege, but their bread and butter Sunday games?  They're not going anywhere.  So no big jump in rights fees come from Fox.

- NBC could theoretically try to snag away the AFC or NFC packages from CBS or Fox, but why?  They're 'loss leaders' for those networks, while with the Sunday night package, NBC has the only clear financial cash cow of the bunch.  So unless someone challenges NBC for SNF rights?  No real bump there.

 

The most significant bumps in TV rights revenues aren't coming from the networks.  They're coming from DTC, in the form of DirecTV's Sunday Ticket Package.  And while that revenue has tripled in the past 7 years?  It's the only source of NFL revenue that's tripled during that time - and it's not likely to sustain that pace thanks to cord-cutters, and people simply unwilling to pay whatever the NFL DirecTV package costs nowadays (I've never even considered paying for it, so I've no idea what it costs).

 

In short?  They've tapped every revenue source for TV rights money that currently is known to exist.  An Amazon or Facebook or someone could swipe away the Thursday night package and bump the overall numbers up, but not even they're crazy enough to bid $1B/year on them.

[Gothamite]

I would love for you to be right, but I am very skeptical.  

[dfwabel]

49 minutes ago, Mac the Knife said:

 

But what's actually happened there?  The NFL sold more of its programming content - further overexposing its core product - for that money.

 

You now have a situation in which Thursday night games are to air on Fox, Sunday games air on CBS and Fox, Sunday night games air on NBC, and Monday night games air on ESPN (which is, de facto, ABC).  Every major terrestrial network is already at the dance.

 

Now if CBS suddenly wants to give up their current AFC slate in favor of the Sunday night package NBC holds, there'll be some battling there and the numbers could rise appreciably.  But you also have a pissed off ESPN paying $1.9 billion for the right to air a lousy slate of Monday night games that, had they known what they were getting back then, would'nt have paid 2/3rds that much for.

 

So to review...

-  ABC (through ESPN) is either going to demand better games, or pay less for them.  Either way, no substantive rights fee jump there.

- CBS is happy with the AFC package, and that everyone else is fine with their spot in the landscape.  So no big jump comes from the Tiffany Network.

- Fox may lose the Thursday night package to some online distributor who overpays for the privilege, but their bread and butter Sunday games?  They're not going anywhere.  So no big jump in rights fees come from Fox.

- NBC could theoretically try to snag away the AFC or NFC packages from CBS or Fox, but why?  They're 'loss leaders' for those networks, while with the Sunday night package, NBC has the only clear financial cash cow of the bunch.  So unless someone challenges NBC for SNF rights?  No real bump there.

 

The most significant bumps in TV rights revenues aren't coming from the networks.  They're coming from DTC, in the form of DirecTV's Sunday Ticket Package.  And while that revenue has tripled in the past 7 years?  It's the only source of NFL revenue that's tripled during that time - and it's not likely to sustain that pace thanks to cord-cutters, and people simply unwilling to pay whatever the NFL DirecTV package costs nowadays (I've never even considered paying for it, so I've no idea what it costs).

 

In short?  They've tapped every revenue source for TV rights money that currently is known to exist.  An Amazon or Facebook or someone could swipe away the Thursday night package and bump the overall numbers up, but not even they're crazy enough to bid $1B/year on them.

NFL is still the highest rated network programming, period. That's forever in the NFL's pocket.

 

Remember, 37 of the 50 most watched TV shows in 2017 were the NFL.

http://awfulannouncing.com/nfl/37-50-watched-tv-shows-year-nfl.html

 

 

 

[BBTV]

4 hours ago, dfwabel said:

But when? FOX just threw another $500M at them for Thursday night and will likely bid for Monday Night Football since they've got nothing else.

 

I thought Fox was going to get WWE for Monday nights?

[Mac the Knife]

55 minutes ago, dfwabel said:

NFL is still the highest rated network programming, period. That's forever in the NFL's pocket.

 

Remember, 37 of the 50 most watched TV shows in 2017 were the NFL.

http://awfulannouncing.com/nfl/37-50-watched-tv-shows-year-nfl.html

 

 

Yes, but the overall landscape is shifting.  People don't "watch TV" anymore; they "consume content."  Advertising patrons are becoming harder and harder to reach across the board, making the vehicles used to deliver the message less and less effective - and thus, less and less valuable.  There are reasons there are suddenly two springtime challengers to the NFL's crown - because they each see vulnerabilities in how the NFL is doing what it's doing in reaching their audience. 

 

Whether they have the solution is obviously in question, but the NFL has been riding its status as king of the hill for a generation now - just as Major League Baseball did from the 1950's until they got knocked off their perch by the NFL, and just as professional boxing did before it got knocked out of the box by baseball.  When you've been atop the hill that long, your view of the landscape only changes so much.  And when you overexpose your core product (as I believe the NFL has been doing for the better part of a decade), you gradually diminish its value as "event programming."  

 

If you're old enough to remember it, during the 1970's and early 1980's ABC and NBC each ran what today would be considered pretty mundane regular season Major League Baseball games - NBC doing a "Game of the Week" on Saturday afternoons, and ABC doing "Monday Night Baseball" in an attempt to keep its MNF audiences together during the summers.  There was virtually nothing special about the games they aired - NBC would run a Reds/Cardinals game, ABC would go with an A's-Angels game or some such... again, nothing memorable.  But the audience numbers were pronounced, because it was something you couldn't see just any old time.

 

That's no longer the case today.  I can watch any game, in any sport, from anywhere on Earth, on a laptop computer with a little effort... evidenced by the fact that I just watched Anthony Joshua beat Joseph Parker for a bunch of alphabet soup boxing belts.  Aside from a Super Bowl, a potentially clinching game of a World Series or NBA Finals, an NCAA championship game?  That "appointment watching" doesn't exist anymore.  It was starting to be true when the NFL locked up its last round of TV deals - and they knew it, otherwise they wouldn't have locked them in for as long as they did. 

 

They wanted the landscape to shake itself out a little before having to go through another round of rights negotiations.  They may score one more huge television rights-based payday with the 2022-???? contracts, because the technology hasn't evolved as fast as everyone thought it might.  But once it does?  The varying methods of content distribution will make television a vehicle for it... but not the vehicle for it.  And television networks aren't going to pay top dollar to maintain a level share of a shrinking audience.

[Gothamite]

People have been predicting its death long enough that I’ll believe it only when I see it.

[MJWalker45]

The NFLs biggest issue the last 3 years has been oversaturation and off field issues. This year there's no Zeke, Kapernick is a punchline instead of the main story and everyone's talking about the draft. The NFL has managed to survive the bad press that everyone said signalled its end. I think the big question is how many lean years is the AAF willing to endure.

[Sykotyk]

35 minutes ago, MJWalker45 said:

The NFLs biggest issue the last 3 years has been oversaturation and off field issues. This year there's no Zeke, Kapernick is a punchline instead of the main story and everyone's talking about the draft. The NFL has managed to survive the bad press that everyone said signalled its end. I think the big question is how many lean years is the AAF willing to endure.

Yeah. The Thursday and Monday games have been brutal the past couple of years. And there's no way to flex them to something better. And the players really hate the Thursday games and I wouldn't be surprised if that rights fee NFL gets for them might wind up going straight to the players as a pay off.

 

 $500 million is only $16 million per team. And if the players put their foot down, will the NFL scrap Thursdays or will they agree to a higher cap for the players because of it?  And, another thing players might argue is guaranteed contracts. The time has come, I think, that the players realize the money is there that there's no reason to risk life and limb for a contract that can be scrapped at any time and leave them from well-paid star to washed-up free agent with no guarantee of income.  And, honestly, I think fans are starting to side with the players and agreeing that the owners are the greedy ones (TNF, London, etc proving they're out to squeeze every penny from the golden goose they can).

 

[MJWalker45]

Part of the problem for Thursday is that it had been used to show rivalry games, usually against the worst teams. Cleveland alwaus plays Cincinnatti or Baltimore on a Thursday and who really wants to see that?

[Gothamite]

2 hours ago, MJWalker45 said:

The NFLs biggest issue the last 3 years has been oversaturation and off field issues.

 

I think the off-field issues have been extremely overblown.   Even the ones I wish would be a big deal aren’t really a big deal.