Man, Economy & Sport

There are two basic models for creating a rival professional sports league. The first is to form a de facto minor league, filling in perceived market gaps left by the established major league. The second is to try and compete head-to-head with the goal of forcing the absorption (merger) of some or all of the new league’s teams into the established one.

In the 1980s the United States Football League went from trying the first model, with some success, to the second model, which was a complete disaster. The USFL name lives on with a new group that aims to start a league—based on the first model—in early 2014. On Monday the new USFL offered some details as to its plans:

The United States Football League (USFL) announced today that it has signed a confidential agreement with an established real estate development company to build multiple commercial developments throughout the United States, with the centerpiece of each development to be a mid-sized stadium to host a USFL team.

The USFL and its development partner have identified and secured the first five of these markets and plan to begin construction on stadiums to seat up to 20,000 fans in time for the league’s inaugural season, which is scheduled to kick off in the spring of 2014. The markets include locations in Southern California, Texas, Louisiana and Alabama.

[…]

Each development will contain a USFL football stadium, a sports and entertainment complex, residential and retail space. The USFL and its development partner plan to build the new developments across the spectrum of small, mid-size and large markets, with the goal of bringing economic development to underserved areas and creating jobs and a sustainable economy for these selected cities.

In striking this deal, the USFL gains an experienced development partner with the resources and ability to quickly construct stadiums that will fit the needs of an emerging and state-of-the- art sports league. The development company benefits by securing an anchor tenant for developments in five of its locations across the United States.

This whole things sounds like a pyramid-building scheme. The new USFL isn’t so much responding to consumer demand for more football as it is the appetite of local governments for stadiums and large-scale developments. No doubt the new USFL is counting on some healthy subsidies and tax breaks from these local governments.

The notion of “anchoring” major developments with an untested football league that will only play a handful of games a year is dubious on its face. Note the USFL’s emphasis on mostly southern markets—the heart of college football country—which suggests a belief that Southeastern Conference fans will be eager to spend their money on third-rate football (behind the SEC and NFL) during the spring months. Other upstart football leagues have made similar attempts in the past to no avail. Even the NFL has struggled with its attempt to convert an SEC-first market in Jacksonville.

And despite the football punditry’s propaganda that demand for the sport is inelastic, the market reality is that there has never been significant evidence that customers want year-round football, particularly when there’s a significant drop-off in player quality. There’s certainly high demand for talking about football year-round and following incidental events like college recruiting or the NFL Draft. But this does not translate into customers spending time or money on minor-league games outside the established fall/winter season. Football is like the Cadbury Creme Egg: It thrives on the marketing buildup to a short, well-defined season.