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September 27, 2007

Sports: Is This New Football Startup Made to Stick?

If you knew who Marcus Katz was, you would probably think he's crazy. Katz is a San Diego entrepreneur who made his money in private school loans. And now he's committed $75 million to start a new professional football league.

We've seen this before. From the USFL to the XFL, startup football leagues invariably fail -- quickly. In 2001, the first televised broadcast of the XFL on NBC was seen by an estimated 14 million viewers. By the end of its inaugural season, fan interest was so low that the league was forced to shut down. Since the AFL-NFL merger in the late sixties, no league has had what it takes to last.

Enter the All-American Football League, set to begin play next spring. Crazy, you say? I assure you, Katz is not.

Think for a moment about why regional sports networks have been successful. They draw upon local passions to provide content (games, shoulder programming, etc.) that national networks cannot. Now apply that strategy to a startup football league and you get Katz's brainchild, the AAFL.

Unlike his failed predecessors, Katz is targeting a very specific audience. He has no intention of competing with the NFL or even the Arena Football league -- in which ESPN now has a stake -- which also plays its games in the spring. Instead, Katz is going after passionate college football fan bases that are only served four months out of the year.

Back in June, Chuck Klosterman wrote about the AAFL on ESPN's Page 2. He quoted a league source, who provided the following explanation:

The intention is to play in areas where there are two sports: college football and spring [college] football. These are places like Tennessee, where they cram 110,000 fans into UT games and turn away another 80,000 who want to get in. Or in Alabama, where they just had 92,000 show up for U of A's spring game.

In 2008, the AAFL will have six teams: Alabama, Arkansas, Florida, Michigan, Tennessee, and Texas. Each roster will feature at least 15 players from the major "home" university or nearby colleges -- players that fans are used to rooting for. They will wear school colors. The league has signed agreements to play at the University of Florida and the University of Tennessee, as well as War Memorial Stadium in Little Rock and Legion Field in Alabama, both historical football venues. Katz has put strong leadership in place, too, with former NCAA Chairman Cedric Dempsey acting as Chairman of the Board.

The bigger question, as with any startup league, concerns the level of competition, the quality of the product. It is in this area, that Katz may have a problem.

While there are plenty of good football players an inch too short or a tenth of a second too slow to make it in the NFL -- certainly enough to fill six rosters -- the AAFL is taking a unique stance on player eligibility: it will only employ players who have graduated from college.

From a business perspective, this is Katz's only bad move. Sure, it might draw some positive attention to the league. But it also severely limits the talent pool and almost guarantees that the quality of play will suffer. And in the end, fans just want to see good football, no matter who is playing.

Hopefully, Katz's moral ambition won't kill an otherwise impressive idea. Otherwise, the AAFL will just be another note on a long list of failures.

Posted by Matthew Finkelstein at September 27, 2007 12:24 PM | Category: sports | 4 Comments