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Single entity v. Individual Ownership


omnivore

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So, you all might have some idea about single-entity owned leagues, where owners either purchase market rights into a league, but all the teams are owned by the league. Or you can have a regular league like most professional leagues where the teams are owned by individual owners.

Now, the obvious criticism to single-entity is that it doesn't promote competition between the owners because there could be an incentive to rig the league, since teams in bad markets could be buoyed or the results could simply be tweaked or whatever. I'm sure there are other criticisms to it.

Anyway, I have a teleconference tomorrow for Viperball and we're discussing this very topic. I was looking for feedback related to why people are say, skeptical of a league like MLS where single-entity reigns supreme versus say other minor/major leagues like hockey's minor leagues. It hasn't exactly worked for the WNBA.

I tend to think it's better to avoid it, but then, there is some evidence that you can effectively transition from single-entity to individual franchise ownership. So, I'm looking for "fan" feedback, because I think that does play into the marketing.

Thoughts?

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have you explored membership ownership like with the AFL teams over here? no-one in particular owns the team, it is just 30k people that keep the club alive, obviously ther first few years would be private ownership before it switches to membership ownership.... i dunno really

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I was looking for feedback related to why people are say, skeptical of a league like MLS where single-entity reigns supreme versus say other minor/major leagues like hockey's minor leagues.

First of all, Major League Soccer isn't a minor league as the phrasing of your question seems to imply. I believe a better phrase to describe what you're talking about is "niche sport" (i.e. a sport that enjoys support from a very specific fan base, as opposed to the more across-the-board support enjoyed by leagues like the NFL, NBA, MLB, etc).

Additionally, fan skepticism of MLS has little to do with its single-entity ownership structure. Amongst fans of North America's more "mainstream" sports leagues, skepticism of MLS - indeed, of American professional soccer in general - is fueled by the fact that with every other sport besides soccer the American consumer knows that they are watching the best athletes competing in that sport. The NBA is populated with the world's best basketball players, MLB with the world's best baseball players, the NFL with the world's best football players, and so on. This is clearly not the case with Major League Soccer. The world's best soccer players don't compete in MLS during their prime and that flies in the face of what American sports fans are used to. That is why many US-based fans are "skeptical" of MLS.

Ultimately, it is your decision. However, with a start-up such as your league, single-entity would probably be the way to go. Given the fact that your sport is a completely new entity on the American sports scene, you may well have an easier time convincing investors to simply shoulder a portion of the league's initial start-up costs than taking on the responsibility of launching an individual franchise in the sport.

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well, MLS is about to kick off its 10th season, so it must be doing something right. looks like tip #1 is don't sell your league to Isiah Thomas...see CBA.

MLS has some seriously committed owners with very, very deep pockets. Otherwise it'd have been dead by year five.

From a fan perspective, the single-ownership model isn't cool. It decreases competitiveness leaguewide as owners aren't vying for talent.

From an owner's perspective, the single-ownership model can cut both ways. If your team is flagging financially and another brings in the money, great. If you're the one proppin' everyone else up though, obviously that's not so cool.

Viperball? It won't matter what structure it'll use - it'll be gone in a year. Two tops.

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I was looking for feedback related to why people are say, skeptical of a league like MLS where single-entity reigns supreme versus say other minor/major leagues like hockey's minor leagues.

First of all, Major League Soccer isn't a minor league as the phrasing of your question seems to imply. I believe a better phrase to describe what you're talking about is "niche sport" (i.e. a sport that enjoys support from a very specific fan base, as opposed to the more across-the-board support enjoyed by leagues like the NFL, NBA, MLB, etc).

Additionally, fan skepticism of MLS has little to do with its single-entity ownership structure. Amongst fans of North America's more "mainstream" sports leagues, skepticism of MLS - indeed, of American professional soccer in general - is fueled by the fact that with every other sport besides soccer the American consumer knows that they are watching the best athletes competing in that sport. The NBA is populated with the world's best basketball players, MLB with the world's best baseball players, the NFL with the world's best football players, and so on. This is clearly not the case with Major League Soccer. The world's best soccer players don't compete in MLS during their prime and that flies in the face of what American sports fans are used to. That is why many US-based fans are "skeptical" of MLS.

Ultimately, it is your decision. However, with a start-up such as your league, single-entity would probably be the way to go. Given the fact that your sport is a completely new entity on the American sports scene, you may well have an easier time convincing investors to simply shoulder a portion of the league's initial start-up costs than taking on the responsibility of launching an individual franchise in the sport.

I wasn't trying to imply MLS was minor league. But I do also recognize that without deep pocketed owners that wanted it to survive. It would've been dead by now. That's all.

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The single-entity structure is designed to make an end-run around anti-trust concerns. Technically, the owners of the teams can't collude w/ one another because there's only one entity -- and thus no one else w/ whom to collude.

W/o going into the question of whether teams compete w/ each other -- for talent or otherwise -- the single-entity structure allows teams to dictate players' and coaches' salaries, restrict franchise relocation and otherwise skirt the Sherman Antitrust Act.

Me, I'm a labor guy. I don't particularly care for having the players aced out. But I have to credit the ingenuity of the single-entity design.

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Here are a few clips of indoor toccer - the close cousin to viperball. About the only thing missing, is tackling - and of course, we used kids. But oh well.

Strike! is worth 7 points and is scored when a player hits the ball into the goal.

Another strike

A throw is worth between 1 and 3 points, depending where you are on the field.

Getting some air

Attempting to score a raindrop A raindrop is essentially a touchdown pass. A player throws a ball into the zone where a teammate tries to catch it for 6 points.

Another attempt at a raindrop

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I think Brian in Boston hit the nail on the head. In the developmental stages, single entity ownership is the way to go. If and when the sport takes hold and there appears to be enough interest to spread viable ownership across the roster of league teams, you can decentralize and start selling franchises.

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Wanna say why? It'll be helpful to know, so maybe it'll last three.

I'd be glad to:

(I) It's a new sports concept.

New sports concepts usually don't fly very well with the original league that originates the game. Before the NFL there were Ohio-based pro leagues. Before the NBA there were two or three predecessors (the NBA itself is a result of a merger between the NBL and the BAA, if I recall correctly). The NHL had the NHA before it. The only exception might be the National League of MLB, but I'll bet it had a predecessor as well.

(II) Ownership Motivation (or lack thereof)

Sports team owners get involved in new leagues for one of three reasons nowadays: (1) to have a loss leader for their other enterprises so as to balance out their tax situations, (2) to assuage their healthy, but perhaps overinflated, egos, or (3) to make an honest effort to bring forth a new product (i.e., their league). If the league is comprised of (1)'s, the league dies when those owners are satisfied that the losses are sufficient, or worse - when the losses are much greater than they'd anticipated. If it's comprised of (2)'s, the league dies when the owners see just how much its costing them to help pump up those egos. If it's comprised of (3)'s, odds are the people involved don't have enough jack to keep things going long-term in the first place, and will go broke trying to keep it afloat, seeking out that "angel" who'll either buy their franchise, kick in a major corporate sponsorship deal, or be the angel of all angels and somehow land some minor television deal.

(III) The Fickle and Uneducated Public.

People are averse to paying their money for something they won't understand from the get-go.

For example, Arena Football is easily enough understood, yet it was on the verge of extinction three or four years in, being financed by Jim Foster's credit cards because people weren't going to the games in enough numbers. The league is nearly 20 years old and its still a very dicey proposition to own a team.

Indoor lacrosse? Pretty much a similar story - always on the search for fresh owners with new money, franchises moving, folding, etc. after every season. Why? Because its introducing something new to people... and if not done exactly right the first time they attend a game (that is, IF they bother to attend one), they won't be back.

I can only see the "ignorance factor" multiplied 10, maybe 20 fold when it comes to something like this.

(IV) Ineffective management.

New sports leagues are almost always administered by either (1) one of the founders (see either version of the MISL), or (2) someone the founders choose as a "name," despite the fact that they have no real administrative capacity or experience in operating a league (see new WHA, subsection Bobby Hull). In either case, the league doesn't have the benefit of the best possible business management, or alternately someone who lacks the impartiality and rationality to act in a completely responsible manner.

The best Commissioner of a new league ever was Chet Simmons of the USFL. He lended tremendous weight to the league's launch and was instrumental in the league getting its television deal. Unfortunately when the owners began to feel handcuffed by the very contract he helped land them, they kicked him to the curb and picked Harry Usher to replace him. Usher had been Peter Ueberroth's #2 on the LA Olympic Organizing Committee, but had never prior to his appointment attended a pro football game.

I'm not one who likes to shoot down new ventures (quite the contrary, I pull for new leagues to succeed, even the ABA), but unless a league can overcome these types of hurdles, its almost certainly dead in the water.

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i think basically what mac is trying to say is:

stay small, for now.

by staying small, you cut down on expenses (mainly travel)

you also being to grow a fan base in that area, who in time will spread the word to new areas. begin with playing exhibitions in different areas of the country, to gauge interest.

dont charge much, but charge enough to make money (staying small will help keep this a reasonable amount.

once the league has shown profit for a few years, and fans have shown support in certain cities for expansion, do so. dont try to force a team into a city, the fans wont go for it (look at the aba on this one, they are doing expansion way too fast).

by staying small, it has its disadvantages, but if you stick with it, and only expand where the chance is it will not affect profit besides in the first year of the teams existance,odds are the league can grow.

also, have a good marketing plan/logos. im sure several of us here would like to help you in this department (i would be delighted to as i have worked for you before and you are a great client). if you use ripped off logos, the fans will just see you as some second rate league (i know you arent planning to use ripped off logos based on our conversations, that was just an example).

basically with a new league travel costs alone can kill profit. i would say keep everything within a 6 hour drive of each other for now. since you are in wyoming i would suggest say billings, cody, sheridan, laramie, cheyenne, and casper as teams. i would also go with no more than 6-8 teams in the get go.

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The problem with going with Billings, Cody, Sheridan, Laramie, Cheyenne and Casper as your initial markets is that it screams "minor league". No offense to the aforementioned cities, but they aren't close to being major markets. If you're going to attract the attention of the national media and, by extension, fans for your product... well, you've got to have the financial wherewithal to line up facilities in some major markets.

I'd go with Major League Lacrosse as a basic blueprint for your league, also adding in single-entity as a component.

1) Identify a single region of the country. MLL went with the Northeast, as that has always been the cradle (no pun intended) of field lacrosse in the United States. You have the freedom to select any region as your sport is, for all intents and purposes, just being born.

2) Select six medium-to-large markets in the aforementioned region. MLL had a nice mix of markets: New York Metro (2), Boston, Baltimore, Rochester and Bridgeport. Additionally, MLL placed their teams in the two largest markets (NY and Boston) just outside the cities themselves. Greater New York is represented by teams on Long Island and in New Jersey, while Boston's franchise originally called Lowell, Massachusetts home.

3) If at all possible, try to "piggy-back" your franchise's operations on those of another sports team. The Rochester Rattlers are owned by the same group that owns and operates the Rochester Ragin' Rhinos of the United Soccer Leagues. MLL's Los Angeles expansion franchise will be owned and operated by Anschutz Entertainment Group, the investor/operators of the Los Angeles Galaxy (amongst other sports holdings).

4) Unless "piggy-backing" operations affords you the opportunity to utilize a professional stadium at a reasonable cost, target using college, high school or municipal facilities. All of MLL's current member franchises are currently calling either college (Boston, Baltimore, Long Island, New Jersey, Philadelphia) or high school (Rochester) stadiums home.

5) Once you've built-up a substantial, sustained following in your original region, play some exhibitions in several cities in another region of the country. Roll out expansion in a regional manner (i.e. bring on one new geographically-based division of four to six teams at a time).

I'd say that keeping the league close to your base in Montana would be ideal, but targeting six medium-to-major markets out there is still going to require more travel than Major League Lacrosse's fairly tight Northeastern geographic alignment has done for the first few years. Still, if the Northwest is your goal, I'd target the following cities (or their immediate suburbs):

* Seattle, Washington

* Portland, Oregon

* Salt Lake City, Utah

* Boise, Idaho

Then, I'd select two of the following four cities (or their immediate suburbs) to round out an initial line-up of six charter franchises:

* Vancouver, British Columbia

* Tacoma, Washington

* Spokane, Washington

* Eugene, Oregon

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First off, I really appreciate the feedback here. It's helpful to get people's perspectives who aren't involved with the development of all of this. We get it, but the people we talk to most of the time will say anything to sell you something or to get you to give them money.

Well, my partners and some others talked today and we came up with a few things for next season, Viperball and hazed things out a lot better.

1. Scrap the tour

We decided that the viability of the league long-term would be much better suited for being in an area, growing the sport or just figuring out that after a year or so, there isn't interesting and going on to something else. But ultimately, it just made more sense to do that in a formal league structure, rather than messing around with a tour that might or might not be successful.

2. Regional League

We're going to setup the NVL as a league in the Greater Midwest/Mountain West area. Because we only play matches once a week, the travel considerations that other leagues have - while still an issue for us - aren't quite as bad as they could be, especially by bus, etc. We're looking at an initial lineup of up to 10 teams, but more likely 6-8.

3. Single Entity

At this point in the game, we're going single-entity. We've decided that - after some rankling - that it just made more sense, as this was the original plan we had anyway. It just makes more sense for the league, keeps things centralized and allows us to do a lot more, for a lot less - with fewer headaches. Our ultimate goal, of course, would be something else.

4. Exhibitions this year, but in much smaller venues

We're going to do a tour of sorts, but what we're really looking to do, is head to indoor soccer facilities and the like, promoting the game through exhibitions that will showcase the game. It'll be a way to generate interest, especially in cities where teams will either be at or nearby, as well as work the bugs out of the sport for next season.

The 2006 season will actually start next May or June, with the season ending in August. We'll stick to our base region, with a range of small, mid-major and major markets, with the idea that we'll be able to get more people interested and more important, some media attention and lots of pictures and such alike.

So that's where we are. A press release announcing our initial cities - four now, the others later - is forthcoming.

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Wanna say why? It'll be helpful to know, so maybe it'll last three.

I'd be glad to:

(I) It's a new sports concept.

New sports concepts usually don't fly very well with the original league that originates the game. Before the NFL there were Ohio-based pro leagues. Before the NBA there were two or three predecessors (the NBA itself is a result of a merger between the NBL and the BAA, if I recall correctly). The NHL had the NHA before it. The only exception might be the National League of MLB, but I'll bet it had a predecessor as well.

(II) Ownership Motivation (or lack thereof)

Sports team owners get involved in new leagues for one of three reasons nowadays: (1) to have a loss leader for their other enterprises so as to balance out their tax situations, (2) to assuage their healthy, but perhaps overinflated, egos, or (3) to make an honest effort to bring forth a new product (i.e., their league). If the league is comprised of (1)'s, the league dies when those owners are satisfied that the losses are sufficient, or worse - when the losses are much greater than they'd anticipated. If it's comprised of (2)'s, the league dies when the owners see just how much its costing them to help pump up those egos. If it's comprised of (3)'s, odds are the people involved don't have enough jack to keep things going long-term in the first place, and will go broke trying to keep it afloat, seeking out that "angel" who'll either buy their franchise, kick in a major corporate sponsorship deal, or be the angel of all angels and somehow land some minor television deal.

(III) The Fickle and Uneducated Public.

People are averse to paying their money for something they won't understand from the get-go.

For example, Arena Football is easily enough understood, yet it was on the verge of extinction three or four years in, being financed by Jim Foster's credit cards because people weren't going to the games in enough numbers. The league is nearly 20 years old and its still a very dicey proposition to own a team.

Indoor lacrosse? Pretty much a similar story - always on the search for fresh owners with new money, franchises moving, folding, etc. after every season. Why? Because its introducing something new to people... and if not done exactly right the first time they attend a game (that is, IF they bother to attend one), they won't be back.

I can only see the "ignorance factor" multiplied 10, maybe 20 fold when it comes to something like this.

(IV) Ineffective management.

New sports leagues are almost always administered by either (1) one of the founders (see either version of the MISL), or (2) someone the founders choose as a "name," despite the fact that they have no real administrative capacity or experience in operating a league (see new WHA, subsection Bobby Hull). In either case, the league doesn't have the benefit of the best possible business management, or alternately someone who lacks the impartiality and rationality to act in a completely responsible manner.

The best Commissioner of a new league ever was Chet Simmons of the USFL. He lended tremendous weight to the league's launch and was instrumental in the league getting its television deal. Unfortunately when the owners began to feel handcuffed by the very contract he helped land them, they kicked him to the curb and picked Harry Usher to replace him. Usher had been Peter Ueberroth's #2 on the LA Olympic Organizing Committee, but had never prior to his appointment attended a pro football game.

I'm not one who likes to shoot down new ventures (quite the contrary, I pull for new leagues to succeed, even the ABA), but unless a league can overcome these types of hurdles, its almost certainly dead in the water.

Actually, from 1871 to 1875, the NL was preceded by the National Association of Professional Baseball Players [NA].

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NVL WELCOMES FOUR NEW CITIES

Tuesday, 15 March 2005

COLORADO SPRINGS - The National Viperball League (NVL) today announced four of its inaugural cities today for the 2006 season. League officials said the other cities - reportedly another four - will be released in the coming weeks.

The four cities are Everett, WA, St. Paul, MN, Fort Collins, CO and Sioux Falls, SD.

The league will begin play in June of 2006, playing a 14-game season with teams playing double-header matches on weekend days. "We're entertainment for the entire family and look forward in the coming months to introducing our member cities to the sport of Viperball and preparing them for the excitement that awaits them," said NVL Founder Ron Bronson, Jr.

"We're excited about the opportunity to establish the sport in the West, where it began," said Chris Klinesmith, who was recently named VP of Public Relations for the NVL. He said the league would working in each of the member cities to create programs aimed at introducing a modified version of Toccer - the sport Viperball is based on - called Viper Rules that will introduce the game in schools and in the community.

"We truly believe the sport can gain popularity and we're going to do the grassroots work necessary to ensure its success long-term," said Bronson.

The league opted for mid-market cities, rather than large cities under the premise the sport needed to grow first. "We believe it makes far more sense to start smaller and grow the game. Even if it takes longer that way, we believe that long-term the sport will benefit," said Bronson.

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I personally like knowing that Arthur Blank is doing all he can for the Falcons. The conglomerate that owns the Thrashers or the evil corporation that owns the Braves? Screw them. I dont know them. I dont know if they care.

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I like individual ownership, though, with a new league, the NVL should maintain an extensive amount of control over teams until they are established. By establishing control over them, you assure positive growth in the team's life, unlike the ABA, which is more like the Anarchy Basketball Association these days. <_<

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