The Business Behind XFL Football
High school students with a passion for sports analytics are anticipating a whole new selection of numbers to examine and compare. The XFL, a professional American football league that is otherwise known as “spring football” because it follows the traditional fall National Football League season but with different players, kicked off its inaugural season last Saturday to throngs of cheering crowds.
Sports fans, observers and analysts alike have been buzzing about this XFL launch, particularly since the league first tried to get off the ground 19 years ago — and failed. All eyes are on this XFL reboot, which involves eight teams in key cities, a 10-week regular season and a two-week post-season. Diehard football fans, who admittedly get a bit depressed after the NFL season-ending Super Bowl, which aired on February 2, are hungry for more tackles and touchdowns.
How Fast Was that Pass?
Sports analysts likewise see potential – especially in an era where data drives business in so many ways. Adi Wyner, a Wharton professor of statistics and a faculty lead for the Wharton Sports Analytics and Business Initiative, said last week during the Wharton Moneyball radio show on SiriusXM, that he sees a wide-open opportunity for in-game analytics in the XFL that would give fans more access to the game.
While Wyner and his colleagues interviewed XFL team president Erik Moses on the show, they advocated for trying to build a culture of greater data availability for the public. “What Major League Baseball has done well with the data is use data to make the fan experience much more compelling,” said Wyner, who also helps to run Wharton’s summer sports analytics Moneyball Academy and Moneyball Academy: Training Camp for high school students, as well as the summer Sports Business Academy for high school students to study sports business leadership at Wharton. “You go to a baseball game now and you have detailed information about the velocity of the pitch, and when you watch the game you see the whole strike zone and the curvature of the ball,” added Wyner. “I’d love to see some of that stuff for football. I’ve been hankering for that for years. How fast was that pass? I’d love to have the data to show some of that information. [The XFL] could be a leader for the availability of information.”
Moses, president of the XFL team the DC Defenders, agreed that data capture is an XFL priority. “Over the last 18 months in getting our game prepared for presentation, we’ve done a lot of that measuring and trial and error around rule innovation,” said Moses, who is one of eight presidents leading the eight teams in the XFL. “We can’t underestimate the importance of making certain that people talk about the game in a way that fans can follow. We have rule innovations that give you different stats to capture…We were measuring different things with sensors on guys to measure velocity off the edge and how much force they were using to hit pads. We are a 21st Century sports league and will look for every opportunity to measure and analyze things.”
“There’s a commitment from the highest levels of leadership for this to be a long-term endeavor and something that is going to be a part of the sports landscape nationally.” — Erik Moses, President, DC Defenders
Moses also underscored other business-focused changes that he and his XFL colleagues believe will drive success with this league the second time around. During a visit last week to Wharton Business Daily, Wharton’s flagship radio show on SiriusXM Business Radio Channel 132, Moses and Heather Karatz, president of the XFL’s Los Angeles Wildcats, discussed the business of the XFL. Here are a few of their takeaways:
Structure. When the XFL was first launched in 2001, it was controlled by the World Wrestling Federation and NBC. This time is different. “The XFL essentially started the first time around as a joint venture between NBC and the WWF,” said Moses. “And this time it’s a separate company and Alpha Entertainment (owned by Vince McMahon) owns all eight teams in the league. We’re self-contained and have some really experienced and great people working at the league level and all eight teams. The single-entity structure helps you to get the organization and the teams set up really quickly and in a way that shows some continuity in the early stages. We have eight strong presidents in our markets and we’re focused on the football this time.”
Market Research. Understanding your market is key to success in business. The XFL has turned to, among other things, its fan base to build a more sustainable league. “What did our fans want? We had to find our fans and give them a voice and listen,” said Karatz. “Back in June or July, we said we didn’t know our fans. We put stuff out on social media: Meet at this bar and let’s talk all things XFL. It started with 15 people around the table and [we asked], what do you want out of a new league and team? What I heard form the fans sitting around that table is that it’s great to have affordable ticket prices, but then don’t gouge me on parking and concessions and all the other ancillary items. Here in LA, we are offering $20 parking where you can also tailgate. It’s a really affordable paradigm for this market.”
Innovation. XFL decision-makers are taking an innovative approach to the game of football, introducing new rules and even challenging some old traditions in the spirit of staying competitive with traditional football and relevant to fans – like any good business. For one, games will be under three hours with a much shorter play clock. “We have a style of football that is less stall and more ball,” noted Moses. Other innovations include a kickoff spot that is set at the kicking team’s 30-yard line, rather than the 35, and the extra-point kick after a touchdown was replaced with a scrimmage play, giving teams the opportunity to score one, two or three extra points. “While it’s important to sell tickets, we want the game-day experience for our fans and our players and our coaches to be lively and energetic,” added Moses.
Looking Long-term
In the end, the revived XFL has broadcast the message that it is coming together as a league of football experts, both on the field and off, who are focused on what they know best – delivering a strong football product. A big investment of time and money (including $500 million from McMahon’s own bankroll) has laid the foundation for success the second time around. “There’s a commitment from the highest levels of leadership for this to be a long-term endeavor and something that is going to be a part of the sports landscape nationally and in these eight markets and maybe more markets to come in the future,” said Moses. “We are building it the right way.”
Are fans convinced? Coming off the first weekend of play, during which Moses’s DC Defenders beat the Seattle Dragons 31-19 to a reported crowd of 17,163 at Audi Field in Washington, D.C., they are hopeful, if not even a bit euphoric. “There are certainly aspects about this new attempt that are very positive, and the first week was a great success,” observes Wharton statistician, Wyner. “The play seemed genuinely high level. The game really seemed like football (without any qualifiers). And the rule changes are interesting and exciting. Sports analytics Twitter was very positive, and by and large everyone seemed to enjoy the games. I am certainly hopeful and really would like it to succeed!”
Related Links
- Listen to the Wharton Moneyball Podcast
- Wharton Sports Analytics and Business Initiative
- NBC Sports: DC Defenders Win Inaugural XFL Game
- NYT: This Is Not Your Crazy Uncle’s XFL
- Wharton Business Daily
- Wharton Moneyball Academy for High School Students
- Wharton Moneyball Academy: Training Camp
- Wharton Sports Business Academy
Conversation Starters
Do you think this new XFL league will succeed? Why or why not?
Using the article and the related links, explore more about the XFL’s failure in 2001. How did Vince McMahon and others learn from their mistakes?
What are some of the biggest challenges to success for the XFL and how do you recommend that they overcome them?
In any business, constant innovation is necessary for survival. This is especially the case in professional sports leagues, in which massive monopolies like the NFL have huge market power and the barriers to entry are massive. In order to succeed, a new football league like the XFL needs to create a unique product that is ancillary to the NFL, offering more of what fans love without trodding on the football giant’s footsteps. Avoiding a direct rivalry with the NFL lets the XFL act as the sport’s offseason football hub and a minor league for the NFL, in which successful players can move up to the larger league. Every football league that tried to directly compete with the NFL’s season, like the FXFL or UFL (there’s a reason you haven’t heard of them) failed immediately after trying to play their games in the fall, putting them in direct competition with the NFL. The seasonal positioning of the XFL gives it an actual chance to succeed. Another reason to feel better about the XFL this time around is that it is more soundly run and structured. Instead of acting as a joint investment between NBC and WWE, this iteration is run solely by Vince McMahon’s
Alpha Entertainment.
Additionally, the league acquired a highly respected and experienced commissioner in Oliver Luck, a former GM and pro quarterback. The stable leadership allows the XFL to appear as a more stable league than its failure in 2001, inciting more investment and fan support. The XFL mainly initially failed because it was seen as a gimmick. Inappropriately dressed cheerleaders, over the top announcers, and illogical promotional stunts (such as the infamous “He Hate Me” jersey) left fans confused and disappointed.
A general lack of talent didn’t help either. To compensate, the new XFL is investing deeply into analytics, hoping that it can help offset the talent gap with the NFL. If teams have more data, the quality of games will increase. Analytics also helps the fan experience. Knowing the speed of a throw or the force behind a tackle makes games all the more interesting to watch. Add ons, such as live betting lines or microphones on players during games, make the league even more interesting. Cheap ticket prices and an emphasis on listening to fan feedback only help the league’s odds of success. Finally, the league also vastly improved its rules since 2001, getting rid of silly ideas like banning pass interferences (which made games low scoring and extremely unsafe) while adding interesting new twists like reworked extra points and overtime.
While the league certainly has considerable challenges to overcome, not the least of which being that literally every other American expansion football league has failed due to a lack of talent and fan support, I am cautiously optimistic that this iteration of the XFL has learned enough from its previous failures that it can find success. However, the league first has to survive the nationwide shutdown of sports leagues brought on by the COVID-19 virus. If the league can make it to the next season, I am excited to see what comes of Oliver Luck’s XFL. The games I watched this year were entertaining (the DC Defenders are my favorite team) and as a football fan I am excited to be able to watch my favorite sport during the NFL’s offseason.
Sources:
https://www.usatoday.com/story/sports/nfl/2019/04/03/aaf-joins-xfl-usfl-wfl-start-up-pro-football-leagues-failed/3349422002/
https://businessofsport.net/2019/02/02/xfl-fails/
Hey Benjamin! Enjoyed reading your perspective very much. As a fan, is there anything about the XFL that you don’t like or that you think needs improvement? If you had a chance to talk to Erik Moses (see story), what would you ask him?
I’d like to start by saying that I found this article incredibly interesting, so hats off to the author. There were a few things I realized that, if the XFL fails to succeed in doing, could really hurt them. Before I start, I’d like to point out that I believe the XFL has done a great job in their outside marketing and reaching out to consumers. They’ve showed their audience and they want to hear them, and they’re general audience has responded well.
Additionally, the “$20 parking ticket” allowing fans to tailgate is a brilliant idea as well. This is a new age of fans that want to go out and experience the game, even if that’s from outside the stadium. We’ve seen this concept when a team is playing on the road, and yet there are thousands of people outside the home stadium rooting for their team on a jumbo tron. While the XFL is far off from that kind of fandom, it’s a start.
However, here are the issues I present. When the XFL began the first time, while they may have had good intentions for a successful league, they failed. While they failed for a number of reasons, I believe the main issue is that the whole league was really just a gimmick. There was so much going on with the league, outside of football, that made it hard to just focus on the game. At the end of the day, what this league needs to survive is real, good football. Rule changes that make the game more fun and faster are great, but eventually it won’t be able to mask poor play. Showing analytics and stats in real time is a great idea to draw in new game and a bigger audience, but that too won’t be able to mask poor play forever.
Now, I’m not saying the league is destined to fail- far from it. At the time at which comment was written, the XFL had already hosted a number of games and one of their quarterbacks even got signed by the Carolina Panthers (a big win for the league). If players continuously get signed, it will not only bring in a higher level of play by some players who could have chosen to play in other leagues or internationally, but it will confirm the legitimacy of the league without a doubt. That’s what the XFL needs, they need acceptance from the football world, and they can only do with true football.
Hey there Isaac, I admire your critical eye when looking at and judging the new business model and the supposed success of the XFL. It’s always good to be skeptical about something that is new and with a prior history of failure. Now I understand your concern about the lack of overall skill in the XFL and why you are calling the XFL a gimmick. However, I want to point out something that you might have overlooked when composing your comment. And that point is on scarcity.
If someone made a knockoff Louis Vuitton bag, would you buy it? While you may not, many people do. The alternatives and fakes are cheaper, but there is another driving factor behind the purchases of many. This driving factor is one the article touched upon that I want to explain in further detail: the concept of scarcity. Many name-brand clothing stores such as Louis Vuitton and Nike burn their excess products rather than put them up for sale because they don’t want their product to drop in worth and price to a point where everyone can have them. By doing so, they are promoting the concept of scarcity. When there are less clothing and product to go around, the price usually increases. Simple supply and demand. When prices get too high, that’s where the fakes and “off-brands” come in.
The same concept goes for the business plan for the Xtreme Football League or XFL. The article, in its brief introduction before going into the specifics, mentioned how some depressed NFL fans after the Superbowl wanted more action, more tackles, and more touchdowns. The article even specifically called the XFL ”spring football.” This is perfect for the XFL’s business model, because it does not have to compete with the NFL’s fanbase, and in fact, are welcoming them with open arms, right after the Superbowl.
This brings me back to the point of scarcity. The NFL has used this concept to rake in a lot of fans and viewers as well, back when they only streamed live television games on Sunday. Because viewers didn’t have a wide selection of times to view NFL games, they had to settle for the one day where games were actually played, making the games ever so rare and ever so exciting to watch and leading viewers to cherish every moment they had during the football games. Since then, the NFL has come a long way, and because their image and brand has gotten so popular, they have started airing football games more days of the week to accommodate and appease their viewers.
Now to address your skepticism of the XFL, once the league increases its popularity with its ability to play off the scarcity of year-round football, it will get more fans and viewers. Once XFL can get more fans and more viewers to watch, this is going to increase the chances that pro players actually want to play for an XFL team. Now once better players start joining the XFL, the quality of the games of XFL will increase and we will have in your words, “real, good football.”
The article does talk about how a deeper understanding of pure data and analytics will shed new light on football, which is what the XFL is trying to do. However, that is just icing on the cake. What it should be pushing for is how to draw out those fans besides by just providing additional numbers. It needs something that the NFL can’t easily take away or mimic—the NFL can also implement novel measures such as giving out data to the audience. The XFL can play around the scarcity of year-round football and incorporate the depressed fans as mentioned in the article to boost their business model and overall success. I can see the XFL being a success because I personally love football (Green Bay Packers!!!). From kickoff to the last play in the game, I watch intently and get excited over every little play that happens. I am one of those “depressed” football fans when the season ends, and when I saw that XFL was starting its season, I was willing to give it a go. A lot of people don’t like change because it differs from what they do usually, but when the norm runs out, people have no choice but to look elsewhere for alternatives. In this case, the XFL with its new innovations and the ability to play around the scarcity of year-round football is the perfect alternative.
As a huge football fan, I was ecstatic when I saw a notification on my phone a week after the Super Bowl, saying that the first game of the XFL was going to start soon. I was unaware of the commencement of the season, but I must say, it was a pleasant surprise! The XFL offers an extension, in a sense, to the regular NFL season, a treat which many football fans would love. While the XFL does offer some interesting football, there are strengths as well as weaknesses to their model.
The strengths of the XFL are numerous. For starters, I love the “less stall, more ball” mentality. This was a great strategy for developing the new league’s rules. In the status quo with the NFL, there are about 30 seconds of wait time between each play. Personally, I get distracted during this time segment, and I would suspect that other people would too. With the game running more efficiently and less time between each play, people will be more engaged in watching the game. This is what make the final minutes of countless NFL games so interesting and enjoyable to watch. When the clock is ticking, when there is a limited amount of time left on the clock, and when the score is close, teams begin to speed up their offense. Even college football employs this strategy, offering a faster paced game. This is just one example of an opportunity which the XFL saw, and successfully capitalized on.
Being a new league, the XFL had to play it a bit safe in their starting season. They kept lower prices as compared to the NFL allowing them to gain traction more easily. The affordability is a major advantage they have, as NFL games are quite expensive to go watch, with parking alone being 50 dollars. Another great strategy they employed is one often seen in entrepreneurship: the creation of MVP or the Minimum Viable Product. Starting with 8 teams and 10-12 weeks season in select 8 cities was a good approach to test out waters. By starting small, they were able to protect themselves from losses they might have incurred. If the league turned out to be a failure, then at least they wouldn’t have lost as much money as they would have with a larger schedule and more teams. Even with the COVID-19 crisis, which was completely unexpected, they protected themselves from losing millions of dollars in their first season by starting small. By targeting 8 major cities, with pre-existing large football fan bases such as Dallas, Seattle, Los Angeles, and New York, they went into the areas where there was the largest possible demand for more football, thereby increasing their probability of success. However, one weakness in this plan was the introduction of 2 teams in Texas. When starting a new league, with only 8 different cities, it would have been better to have them each in a different state, at least until they expanded. Nevertheless, targeting major broadcasting channels such as FOX and ABC was a great tactic, allowing access to a majority of Americans hoping to tune in to the game, thus increasing their viewership. I would recommend that they move all of their games to these channels instead of ESPN and FS1, as they would lose viewers who don’t want to pay extra for the subscription.
Another recommendation I have for them is to hold their season over the summer. When summer hits, people, especially students, gain more free time. However, there are almost no sports to be seen on TV. The NBA Summer League is boring, to say the least, and the only good games anyone can watch are the regular season’s replays. This leaves an entire season, without a single major sport going on; theoretically, it’s the perfect opportunity. If the XFL were to hold their season at least partially during the summer, it would provide for more viewers, as compared to the current February to April. The only competition they would face, is the Olympics and the FIFA World Cup, but each of those only come once every 4 years.
When examining why the XFL failed in 2001, it all comes back to the quality of play. The NFL has the best football players in the country, leaving the XFL with a small pool of players who are good enough to play professionally. The problem they face is that the NFL offers very high salaries, so all of the best players go there. One strategy for improvement would be to get college players hopeful of playing professional football, but who haven’t yet gotten the attention they desire from the NFL. Additionally, it would be best for them to add in their own quirks, making the game more fun and interesting to watch, whether that be through adding in analytics, or shortening the play clock as they did. Some other ideas which could make it a bit different and more interesting include: holding a tournament each weekend of the season at one of the different locations and at the end of the season, the bracket for the playoffs can be decided based off of the number of tournaments won. The games in these tournaments can be made shorter; thus, making them faster paced, and more competitive. There could be two preliminary games for each team on Saturday and a bracket with the top half on Sunday – this is similar to how high school lacrosse and speech and debate competitions are held.
Overall, I think that the XFL has the potential to be a very successful league, considering the love for football our nation has. They have already come a long way since 2001, fixing some of the safety issues they had, as well as making it family friendly. If they figure out a way to make a strategic alliance with the NFL or even the NCAA, I believe they will be able to better capitalize on the market they have identified.
As a diehard football fan, my least favorite time of year is when the football season comes to an end. After this part of February my Sundays are bleak and uneventful until early September. Because of this, I was overjoyed to discover the XFL, a professional football league that promised to fill the void left by the NFL’s offseason. As a passionate follower of the game, I found myself captivated by the XFL’s unique approach to football. The league’s rule innovations, shorter play clock, and faster-paced gameplay injected a fresh energy into the sport I love. This created a perfect blend of familiarity and excitement that left me exhilarated every game day. But what makes the XFL Special is its commitment to data and analytics. The XFL’s determination to make data-driven decisions enhances the fan experience, elevating my enthusiasm to new heights. With each passing game, my admiration for the XFL grew stronger. The league’s high-level play, innovative rule changes, and data-driven approach made me inspired to visit the local New York Guardians.
NFL Games are a large commitment, with big crowds and a loud environment. In contrast, the XFL game were relaxed and exciting. The XFL game I visited felt like a quick enjoyable day while NFL games are a large time commitment. This seems to be part of the plan for the XFL with their games being less chaotic than an NFL game. This led to a leisurely, enjoyable, football experience. It was great seeing my favorite players in person and rooting for my favorite team. Unfortunately, the New York Guardians have been relocated to Orlando, tampering my love for the league.