Business 2.0 Article -- Link to Article -- Still Works!
Check this Out!
This fine article is one of the places that XFLBoard.com first appeared in the media!
G. Beato, January 2001 Issue
Thirty years ago, the father of instant replay and "slo-mo" brought the National Football League to prime time with Monday Night Football. It was a risky experiment that gave us, among other gimmicks, lingering shots of cheerleaders, splashy infographics, and Howard Cosell. The show used nine cameras instead of the traditional four, mounting some of them on golf carts and racing them up and down the sidelines. It pioneered a whole new way for professional athletes to keep in touch with their moms. And in just a few seasons, by packaging sports as mainstream entertainment, Arledge and his colleagues at ABC Sports had turned the NFL into the true national pastime of the television age.
Thirty years later, Monday Night Football remains the centerpiece of the NFL regular season. And it continues to evolve. This season's innovations include ump cams, even splashier infographics, and the arcane broadcast booth audibles of comedian-turned-commentator Dennis Miller.
But for the purest contemporary expression of the Arledgian ethosand thus, for a glimpse of where football and indeed all sports programming is headedwe must now look elsewhere. That's why, on a Monday night in mid-November, I'm sitting in the second row of Iowa State University's Hilton Coliseum amid 8,000 devotees of an event being telecast live to cable watchers everywhere as the World Wrestling Federation's incredibly popular Monday Night Raw.
It has been 15 months since the WWF last visited Ames, and the crowd has clearly been looking forward to the occasion. Flashbulbs start popping with each new wrestler's entrance. Thousands of fans have brought signs fashioned from neon pink and orange cardboard and bearing cryptic slogans like "Get the table!" and "Wild Bill no puppies for you."
In the ring, The Rock, a half-Samoan, half-African-American Adonis with an autobiography on The New York Times best-seller list and as good a shot as anyone to replace Arnold Schwarzenegger as Hollywood's leading action movie he-mannequin, is battling the 400-pound Rikishi, who sports a bleached blonde goatee and hindquarters so huge his thong should be getting paid overtime. The Rock wins by disqualification after another wrestler jumps to Rikishi's assistance. But Rikishi gets the last word, rendering The Rock unconscious with a post-match flying ass slam.
In the floor-level area where the seats go for $40 a pop, a slight, middle-aged woman wearing an "American Badass" T-shirt is on her feet screamingas is a 6-year-old boy balanced on his father's shoulders and waving a large foam cutout of a hand with its middle-finger extended in profane salute. The crowd noise makes it difficult to hear the rap-metal soundtrack thumping through dozens of loudspeakersto say nothing of the howls of pain being emitted by The Rock from under the lethal glutes of his adversary.
The WWF is a world where entertainment has completely superseded sport: Complex story lines characterized by soap opera-like plot twists and cartoon-like acting are more important than the wrestling, which is entirely scripted anyway. Who cares if some old-school wrestling fans decry the WWF as sleazy bunkumthe camera loves it.
The matches are almost as brief and fast-paced as one of ESPN's SportsCenter highlight segments. The rivalries are intense. The back stories are intricate enough to sustain endless straight-faced analysis from the announcers. The sports-as-entertainment approach that Arledge pioneered with Monday Night Football has worked so well for the WWF, in fact, that the company, which went public in October 1999, now boasts a $1.06 billion market cap. And it's preparing to expand in a big way.
On February 4, 1999, WWF Chairman Vince McMahon announced plans to form a new eight-team football league called the XFL. Investors greeted the news with skepticism: The WWF's stock price dropped 25 percent in a single day, from $16.50 per share to $12.31. A couple of months later, however, NBC paid $30 million for what amounted to a 3 percent stake in McMahon's enterprise (officially known as World Wrestling Federation Entertainment), while agreeing to a 50-50 split of the costs and hoped-for profits of the XFL. Then two more television partners, UPN and TNN, each agreed to broadcast one game per week. Burger King, Anheuser-Busch, Procter & Gamble, AT&T, Quaker State, Pennzoil, Spalding, Gatorade, and Valvoline signed on as sponsors. Minnesota Gov. Jesse Ventura enlisted as a color analyst for the NBC broadcasts, which are scheduled for Saturday nights.
In October 2000, five months before the first kickoff and well before a single player had been drafted, the official Website of the new enterprise, XFL.com, attracted a quarter of a million unique visitors. By early November, the XFL had sold over 40,000 season tickets, more than half of those sales coming from the Web. And now, with the season opener just a few weeks away, there's mounting curiosity about just what the XFL is going to deliver: over-hyped farce or a first taste of what sports programming will increasingly be like on television and, all too soon, on the Internet as well.
Every great circus needs a ringmaster, and in the WWF, that title belongs to 55-year-old Vince McMahon Jr. Visually, McMahon fits the role of wrestling impresario perfectly. With his barrel chest and injection-molded pompadour, he's like an action figure come to life, and his rubbery facial features have been engineered for all the outsized emotions (Outrage! Surprise! Disgust!) that come with managing a pack of vain, scheming wrestlers. Variously described as a contemporary Barnum, a craven panderer of sex and violence, and, most simply, the devil (in, of all places, the New York Post), McMahon grew up in a trailer park in Pinehurst, N.C. There was wrestling in his blood. His father and grandfather were wrestling promoters, and despite its recent IPO, the WWF remains a family business at heart. McMahon's wife, Linda, is the CEO, his son, Shane, holds the title of president of new media, and his daughter, Stephanie, is a key member of the WWF writing team.
McMahon was 37 when he purchased the WWF from his father and set out to revolutionize the industry. Pro wrestling had been a regional business, with promoters sticking to well-defined territories. Major advertisers shunned the sport, a fact commonly attributed to its undesirable demographics. "What has 14 teeth and an IQ of 50?" ran an industry joke of the time. Answer: "The first 10 rows of any wrestling audience."
McMahon's great insight? He realized that television could help extend his wrestling empire far beyond the bounds of the Northeast, where the WWF had been confined. What put advertisers off, he grasped, wasn't the nature of the audience so much as wrestling's lack of national reach. So McMahon started buying television time on local stations and cable channels, and broadcasting WWF matches in his competitors' territories. By the mid-1980s, the WWF's USA Network telecasts were among the highest-rated shows on cable, WWF pay-per-view events were earning record amounts, and WWF superstar Hulk Hogan had become a genuine pop culture icon with his own Saturday morning cartoon series on CBS.
At this point, fate attacked the WWF with a surprise snap jab, a vicious eye rake, and a devastating monkey toss. In 1991, allegations of rampant steroid abuse surfaced during the trial of a doctor who said he'd supplied steroids to Hulk Hogan and four other wrestlers. A year later, a former WWF television announcer filed a lawsuit against the company, claiming that he'd been fired for resisting the advances of a WWF executive. Soon there were allegations of non-consensual locker-room buttocks-squeezing and ring-boy foot-fondling. Eventually, two WWF executives resigned, one contract employee was fired, and the wronged ring boy received an out-of-court settlement. In 1994, ringmaster McMahon himself was accused of passing out steroids "like candy" to his wrestlers and indicted on charges carrying a maximum 11-year prison sentence. Although a jury ultimately acquitted him, the negative publicity came at a bad time, taking a heavy toll on McMahon and his company.
In September 1995, Ted Turner scheduled his own wrestling show, WCW Nitro, for the same time slot as Monday Night Raw. McMahon was caught off-guard. "Sometimes things come along that you can't predict," he recalls. "I couldn't see Ted Turner deciding to lose hundreds of millions of dollars in this industry. I couldn't see that coming because it didn't make good business sense. But when he decided to overspend exorbitantly for talent and buy all of our superstars off, it took us a while to regroup."
As Jay Leno is to David Letterman, Nitro was to Rawnot as original, not as inspired, and yet somehow more popular. By the following summer Nitro had established its dominance, and from mid-1996 on, the WCW enjoyed a run of 83 straight weeks on top, Nielsen-wise. WWF revenues declined sharply, and profits disappeared altogether. In 1997, the company lost $6.5 million.
McMahon eventually responded by hiring writers from Late Night with Conan O'Brien and MTV, and becoming "more contemporary," as he puts it. "We introduced more elements in terms of action, adventure, humor, and soap opera," he says. And also, his critics would charge, megadoses of those old television standbys, sex and violence. Thong-clad lady brawlers engaged in cat fights. Crazed grapplers attacked one another with flaming two-by-fours wrapped in barbed wire. There were mock crucifixions. Nun-wrestling. Simulated masturbation, simulated drug use, and simulated old-lady breasts. During one pay-per-view event, a 78-year-old veteran ring diva named Mae Young dropped her top, exposing a pair of prosthetics so convincing that many fans refused to believe they had seen anything other than genuine 78-year-old cleavage.
The result was a comeback as improbable as any that McMahon's writing staff could possibly have manufactured. Ratings surged again, and to the dismay of many parents, obscene WWF slogans such as "Suck it!" became catchphrases in schoolyards across the land. Stone Cold Steve Austin, a scowling, beer-guzzling Texan, emerged as a new pro wrestling phenomenon: the "heel" as "babyface" (wrestling-speak for the bad guy as good guy). The same dynamic worked for The Rock as well. Endless WWF spinoffs were launched and licensed: neckties, cookbooks, meat snacks, throw rugs, credit cards, greeting cards, videogames, music CDs, sweating toy wrestlers, a WWF theme restaurant in Manhattan. English professors started writing 4,000-word analyses of the WWF phenomenonessays about "postmodern wrestling" and the "decline of the old nationalism." McMahon, taking the role of corrupt, scheming corporate overlord, assumed a greater part in the story lines. In 1998, the company turned a profit of $8.5 million on revenues of $126.2 million. In 1999, the WWF went public, and by last year profits had reached $58.9 million on revenues of $379.3 million. In the age of Nielsen, however, perhaps the most significant measure of the WWF turnaround was that among 12- to 24-year-old male viewers, Monday Night Raw outperformed Monday Night Football by 47 percent last season.
Purists will note that pro wrestling is to sport as ER is, more or less, to emergency-room medicine. Indeed, McMahon himself describes his product as "sports entertainment," a phrase he is said to have coined in order to avoid the regulatory and taxing authority of the various state athletic commissions. But it's not as if McMahon operates in a vacuum. Since roughly 1939, when NBC broadcast a Princeton-Columbia baseball game to 400 or so homes equipped with televisions within a 50-mile radius of the game, athletic events have reflected an ever-increasing awareness of the electronic media. Nowadays, the line between sports and entertainment is about as solid as the yellow, computer-generated first-down marker employed by Fox in its NFL coverage.
That first baseball broadcast got bad reviews. "Television is no substitute for being in the bleachers," wrote a New York Times critic, expressing a viewpoint that still has its adherents. By 1960, however, sports comprised 5 percent of all network programming; three decades later, the figure was nearing 20 percent, and all-sports cable channels such as ESPN were thriving as well.
Success led to a boom in TV rights feesthe money the various leagues collect from networks and cable channels. In 1997, the National Basketball Association signed a four-year $2.64 billion contract with NBC and TNT. Last September, Fox agreed to a $2.5 billion deal with Major League Baseball. When the NFL renegotiated its TV contracts in 1998, it wound up with an eight-year commitment worth $17.6 billion, courtesy of Fox, ABC, CBS, and ESPN. NBC, left out in the cold, had calculated that it would be all but impossible to turn a profit at those rates. The network thus found itself without an NFL contract for the first time in almost three decades.
But the means of deliverance from that terrible fate already existed, at least in prototype form. ESPN's X Gamescreated in 1995 by an accountant-turned-programmer who had drawn his inspiration from Mountain Dew commercialsturned daredevil pastimes like sky-surfing and bungee-jumping into competitive sports. The games also demonstrated a degree of TV-centric flexibility unheard of among the legacy leagues. After one season, for example, the original name, "Extreme Games," was shortened in the interests of "increased brand identity." The X Games quickly developed into an extremely profitable franchise for ESPN. Even though the 2000 edition averaged only a 0.3 Nielsen rating over 28 hours of programming, the event is so inexpensive to produce and its audience (12- to 34-year-old males) so coveted that ESPN recently decided to introduce an international version in 2002.
Last September, NBC unveiled an X Games clone called the Gravity Games. And now comes the XFL, which extends network-owned sports programming to league-oriented sports for the first time. But NBC and McMahon did not find each other immediately. For 18 months, the network was in hot-and-heavy negotiations with Turner Sports over a proposal to found a new football league. In the end, nothing came of those discussions: There was no way for such a league to succeed, the network is said to have concluded. McMahon went about his efforts very differently. "We didn't do the kind of market research that NBC did," he says. "Quite frankly, a lot of that I think was wasted money. I've had the idea for the XFL for a long time, and finally I just decided that the market conditions were right and the time to do it was now."
Notwithstanding the network's research, NBC Sports President Dick Ebersol jumped at the chance to back a new football league, once McMahon was involved. The two had worked together in the mid-1980s, putting together a monthly WWF wrestling show called Saturday Night's Main Event that ran on NBC for six seasons. Ebersol was confident the XFL could deliver the young male viewers that NBC wanted as a lead-in to Saturday Night Live. Two months after McMahon's initial XFL press conference, NBC purchased its 50 percent stake. With the two companies splitting expenses, McMahon estimates that the league will spend at least $100 million in its first three seasons.
Just a few years ago, when NBC was the undisputed intercontinental ratings champ, it no doubt had little interest in the five million or so households that consider Monday Night Raw must-see TV. But as television audiences continue to fragment, even the Big Three networks are starting to pursue cable-sized market niches. And in the world of market niches, McMahon's young male audience is as good as it gets. "It's been a long time since the days of The Golden Girls on NBC," Ebersol remarked while announcing NBC's XFL investment. Indeed, for the XFL to achieve the 20-and-higher Nielsen ratings that The Golden Girls enjoyed in its heyday, McMahon would have to convince Bea Arthur to play linebacker for the Memphis Maniax. But NBC has no such expectations: The XFL only has to achieve an average Nielsen rating of 4.5 or so, and everyone will be happy.
Of course, ratings assumptions are much different for Monday Night Football. Measured against the $550 million a year it spends on rights fees alone, a 4.5 Nielsen rating would be a catastrophe for ABC. In the world of the XFL, expenses and expectations are far more modest. The league is organized as a "single-entity" structure, which means that the leaguenot individual team ownerscontrols the franchises. No owners means no bidding wars: Most players will be paid $45,000 a seasonquarterbacks a little more, kickers a little less. There's a $500 bonus for each player who starts a game, and a $100,000 victory prize to be shared by the players on each of the week's winning teams. The championship team splits $1 million. All told, the yearly payroll of the entire league is approximately $19 millionless than half the cost of the players on a single NFL team.
"Is the XFL going to be a success? I think it's going to be real tough," says Dave Meltzer, editor of Wrestling Observer. "The idea is that McMahon can figure out a way to make football appealing to wrestling fans, but football and wrestling are two different things. If you don't like the NFL, then why would you want to watch a league where the players aren't good enough to play in the NFL? Yeah, Vince McMahon created the WWF and the WWF's a success, but do you watch the latest Aaron Spelling show just because you liked [Beverly Hills,] 90210?"
But a large element of the XFL's strategy rests precisely on not being the NFLthe "No Fun League," as McMahon likes to call it. "You've got suits who never played football running the football business," he observes. "You've got billionaire owners making rule changes to protect their most important investmentthe quarterback. They say they're doing it for safety reasons! Come on! They're trying to protect their investmentthat's all it is." McMahon portrays himself as a football purist harking back to the days before the game got distorted by NFL-style economics. The XFL, he vows, will be the second coming of "the game of football you knew and loved many years agowhere there wasn't this over-regulation, when there weren't any uniform police and all of that crap!"
Bombastic? Self-serving? Of course. (It's not for love of the game, after all, that McMahon has come up with a salary scale so low that the players will hardly be worth protecting.) But, ultimately, he has a point. "In a lot of ways, watching the NFL has become like watching a golf tournament," says Terri Ritenour, a sports analyst for market research firm Paul Kagan Associates. "It has become very formalized, very structured."
A black football with red stripes. Jesse Ventura doing color commentary. No fair catches on punts, no quarterback slides, no restrictions on end-zone celebrations. Less time between plays. A shorter half-time. Cheerleaders who talk. Uniforms with built-in wireless mikes. Cameras in the huddle. Cameras in the locker room. A live ump cam, not to be confused with the one on Monday Night Football, which is used for replays exclusively. "What good is a camera unless you used it live?" McMahon says. "We're going to have cameras all over the place, but not just for the sake of being more technologically advanced than Monday Night Footballwe want to give you an all-access pass to any place on the field!"
The action, according to McMahon and pretty much everyone else involved with the XFL, will be unscripted. But the presentation of that action will be so immersive and so fast-paced that it may feel more like playing Madden NFL 2001 on a Sony PlayStation than watching the Dolphins-Jets on CBS.
And those talking cheerleaders? They won't just talk. A few months ago, McMahon caused quite a buzz by suggesting that unlike the NFL, which prohibits dating between cheerleaders and players, the XFL will actually encourage such relationships. "Am I going to play police chief here?" he asks. "The players and the girls are over legal age." Down the road, he even holds out the prospect of cameras and mikes in the cheerleader locker rooms.
The XFL has come in for a fair amount of criticism, considering that it has yet to air a game. The Parents Television Council, a group that has convinced major advertisers like Coca-Cola and the U.S. Army to abandon the WWF, is preparing a similar assault on its spinoff. (The WWF recently sued the council's chairman, L. Brent Bozell, for conspiring to damage its image.) Industry pundits have labeled the league a "joke" and a "fiasco."
But some pragmatists take a less vitriolic view. "I am not going to stand here and, like Zola, shout 'J'accuse!' at Dick Ebersol and [NBC President and CEO] Bob Wright," says Bob Ley, a veteran telecaster who currently anchors ESPN's Outside the Lines. If his network didn't have a conflicting agreement with the NFL, he says, ESPN might well have participated in the XFL bidding, too. "Every broadcast operation is under intense economic pressure not only to make money but to increase the rate of increase in its profitability," he says. "The day for standing on taste and ethics is long past."
Cameron Blanchard, director of communications for NBC Sports, takes the argument a step further, depicting the XFL as a blow for freedom of the sports press. "For the first time ever," he says, "a broadcaster is going to have as much access as they'd actually like to have." Blanchard sees the XFL as "a sports version of reality television."
Unlike the XFL, the NFL predates television. So there's a constant tussle between the traditions of the game and the demands of the media. The NFL, for example, does not like on-field cameras. Sideline reporters must stand in certain places and can only talk to players and coaches at designated times. Microphones in the huddles are out of the question. But where the NFL sees conflicts and distractions, the XFL sees opportunity. "If a player takes issue with a call and goes over and starts yelling at a ref, we're going to be there," says NBC's Blanchard. "If there's an altercation between players, we're going to be there too."
In other words, the XFL may be the first league borne of the Internet age, where the barriers separating the "fans" and the "games" are broken down in the interest of a more interactive and immediate experience. And the sensationalism that goes with that? It's just a bonus.
While the Web hasn't been a priority, there's already substantial interest in XFL.com. "We've gotten over 45,000 applications for league-related jobs," says XFL President Basil DeVito Jr. "And over 15,000 player applications. So I absolutely believe that when we kick off, at least one guy in the league will have made it onto an active roster because he logged onto our Website."
The site has a better conversion rate when it comes to selling season tickets. By early November, more than 80,000 people had registered. Using this list, along with a much larger list of registered WWF.com visitors, the XFL has run an email-based marketing campaign that has helped sell more than 20,000 tickets online.
For a glimpse of what XFL.com could ultimately become, have a look at WWF.com and the 40 other sites comprising the WWF New Media Network. According to Media Metrix, WWF.com drew 1.58 million unique visitors last October, and XFL.com had 377,000 visitors. Company officials say that its Web network attracts, in all, more than 4.4 million people a month, generating more than 240 million monthly page views and serving more than 7 million monthly video streams. Its major weekly email newsletter, "The Full Body Press," has more than 1.2 million subscribers.
In fiscal 2000, WWF.com's revenues were $6.9 million, up from only $800,000 the previous year. (Some of those revenues came from pay-per-view Webcasts that WWF.com has temporarily discontinued as it continues to refine the service.) There is also an online store, of course, and a WWF auction area, where you can bid on memorabilia such as a metal folding chair personally dented and autographed by The Rock (last known bid: $265) or a lace-up bustier with matching thong worn by a female wrestler known as The Kat (last known bid: $2,601). So who knows? XFL players may be able to supplement their relatively modest salaries by selling autographed shoulder pads and such, and the cheerleaders could really clean up.
But the future of the XFL may be transformed by Webcasting. Although the league has no such plans for its inaugural season, it's an extremely vertical operation: The teams are the league and the league is the broadcaster. By contrast, while CBS and the NFL may have a mutual interest in the other's success, they are, in the end, two different companies with two different sets of not-always-corresponding goals. And to a certain degree, the same dynamic applies to the NFL and each of its individual teams. But in the XFL, there are no such distinctions. And at a time when professional sports has become, more than anything, a source of entertainment programming to deploy across multiple platforms, this vertical structure holds a unique advantage.
Consider what's been happening with some of the other major professional leagues. In the TV world, the relationships between the various entities that work together to produce sports programming are fairly well established. On the Web, where anyone can distribute content relatively easily, those relationships could be much more fluid. What's stopping the Oakland Raiders from Webcasting games directly from its site? Or from the official NFL.com site, rather than from a media site such as ESPN.com or FoxSports.com? What's stopping them now are the NFL's lucrative TV contracts. In September 1999, the NFL actually produced its first broadband Webcastsbut it did them overseas, in Austria, Singapore, and The Netherlands, where there wouldn't be any television conflicts. Currently, individual NFL teams are operating under a two-year agreement that bars them from selling their Internet rights.
But what will happen two years hence? Will the NFL choose to broadcast its games from its own site? In October 2000, the NBA decided to forsake the rights fees it had been collecting from ESPN.com in order to create NBA.com. In the case of the XFL, however, such potential conflicts don't exist. Because the league owns the individual teams, one large point of contention is eliminated. Because both NBC and the WWF will benefit equally from any Internet revenue streams that develop, they'll be able to take advantage of the opportunities without fear of jeopardizing their TV deals.
That flexibility coupled with the XFL's willingness to entertain technological innovations that encroach on the game itself, opens up all kinds of possibilities. And fans have already started imagining them at XFLBoard.com. "I think a live video feed from Bubba the linebacker's helmet and an audio from a mike on him would really bring you into the game," writes a fan calling himself Btbolt. "Then for five bucks or so you could follow one of the players throughout the game. You could mike the more popular guys and thousands would pay just to see the entire game from his perspective while at the same time they are tuning in to get the total picture on TV."
After Roone Arledge's great success with Monday Night Football and ABC Sports, he was rewarded with the president's job at ABC News. So perhaps critics will take cold comfort from the fact that Vince McMahon is merely starting a football leagueand one that is far from assured of commercial success. Certainly, the track record for new football leagues is not encouraging. In the mid-1970s, the World Football League lasted just two seasons before going bankrupt. In the mid-1980s, the United States Football League, which started with more capital than the WFL, endured for about twice as long. But in the end its heftier financing simply enabled to lose more money: approximately $200 million in four years.
Yet at Monday Night Raw in Ames, Iowa, more than a few fans like the XFL's prospects. "It's going to be more of a show than the NFL," says Geff Gescheidler, the 32-year-old executive director of the Boys & Girls Club of Ames. "There's going to be more chances for the fans to interact."
Down in the ring, fan favorite Stone Cold Steve Austin is taking on former Olympic gold medal winner Kurt Angle, a clean-cut schemer with a reputation for whining. "People may see me as a sports entertainer, but I see myself first and foremost as a wrestler," he complained earlierremarks that set off an audience chorus of "Asshole! Asshole Asshole!"
Austin smashes Angle's face into a turnbuckle, and then, after a tumble through the ropes, against a set of stairs and, finally, against the announcer's table. The crowd is delighted. "One! Two! Three! Four!" it chants, dutifully recording each of the blows that Angle absorbs.
But Angle's fortunes change suddenly when a wrestler named Triple H bolts into the ring in his street clothes, whips off a leather jacket, and goes after Austin. "With the NFL, you fall asleep during the game and wake up to watch the last three minutes," says 29-year-old research scientist Shawn Baier, as Triple H slams Austin's neck against a metal folding chair. "But if the XFL is anything like this, you're not going to fall asleep!"
Roone, you have no one but yourself to blame....