The AAF Is Currently Not Making Money Off Their TV Deal

[XFL_FAN]

https://www.reddit.com/r/aafb/comment ... t_update/

The league is not receiving rights fees from networks. Ebersol described the league’s relationships...as 'partnerships that extend beyond just broadcasts.' At its core, the league is equal parts sports and technology startup... As more states begin to legalize sports gambling, that technology could be marketed to other platforms. “What we are looking to do is create a structure that is equitable for the network,” Ebersol said. “People paying for media rights are losing money.

This means that CBS, NFLN and Turner has all the AAF's games for nothing. I assume this means that the AAF went to every network asking for a deal and they got no offers, so they had to offer it for free to any network that wanted it. CBS, NFLN and Turner accepted. Does this mean the XFL will get money for their TV deal? If they do, then FOX and ABC/ESPN would have valued the XFL way more than the AAF. It seems as if these TV networks have voiced their opinion on who's winning the battle for spring football. Hint: the league they value more and think has the better chance of surviving starts with the letter X.

[MikeMitchell]

https://www.reddit.com/r/aafb/comment ... t_update/

The league is not receiving rights fees from networks. Ebersol described the league’s relationships...as 'partnerships that extend beyond just broadcasts.' At its core, the league is equal parts sports and technology startup... As more states begin to legalize sports gambling, that technology could be marketed to other platforms. “What we are looking to do is create a structure that is equitable for the network,” Ebersol said. “People paying for media rights are losing money.

This means that CBS, NFLN and Turner has all the AAF's games for nothing. I assume this means that the AAF went to every network asking for a deal and they got no offers, so they had to offer it for free to any network that wanted it. CBS, NFLN and Turner accepted. Does this mean the XFL will get money for their TV deal? If they do, then FOX and ABC/ESPN would have valued the XFL way more than the AAF. It seems as if these TV networks have voiced their opinion on who's winning the battle for spring football. Hint: the league they value more and think has the better chance of surviving starts with the letter X.

That AAF model is not going to make money. They are going to need the NFL to bankroll them. Unless their league grows in popularity, which leads to them getting a network deal by seasons end. Getting to year two and playing it rests on the league finding funds fast.

[MikeSherman]

Getting to year two and playing it rests on the league finding funds fast.

We don't know how much funding they already have, do we? When they launched, Ebersol said they had enough for a 7-10 year runway. I sort of suspect that's bullshit, but we don't know what the runway actually is. I wouldn't assume that they necessarily need new investment to play Year 2.

[XFL_FAN]

Getting to year two and playing it rests on the league finding funds fast.

We don't know how much funding they already have, do we? When they launched, Ebersol said they had enough for a 7-10 year runway. I sort of suspect that's bullshit, but we don't know what the runway actually is. I wouldn't assume that they necessarily need new investment to play Year 2.

Agree. The AAF, like the XFL has the funding to get to year two no matter what. The AAF's rating for their championship game on CBS will be where the negotiations start next year for money on a TV deal. If the AAF gets really bad ratings on that game then CBS won't want to expand the amount of broadcast games that the AAF gets. Maybe the AAF will get money for their games next year, but I assume it won't be a lot if they can't get CBS to be all in on their product. Meanwhile the XFL looks like they are getting a "blockbuster" deal year one. The details of that deal will be interesting to see. If the XFL makes big money off of their TV deal year one then they are setting themselves up for long-term success.

[MikeMitchell]

Getting to year two and playing it rests on the league finding funds fast.

We don't know how much funding they already have, do we? When they launched, Ebersol said they had enough for a 7-10 year runway. I sort of suspect that's bullshit, but we don't know what the runway actually is. I wouldn't assume that they necessarily need new investment to play Year 2.

All start ups lose money. The cost of running a football league even at the bare bone minimum is in that 100 to 200 million dollar range. It could be more. Ebersol has mentioned that they are looking to raise 750 million through investing over the course of a 5 year span. Because that’s how much they need just to run the league, let alone be profitable.

There are so many expenses from insurance to advertising to production costs to travel expenses, lodging, venue rentals, equipment, technology costs etc etc etc

Not to mention office personnel and league personnel. The overall expenditure of all the areas, I mentioned will be in that 100 to 150 million range. Insurance alone costs tens of millions of dollars.

The total player payroll for all AAF 8 teams is 29 million dollars. 70k per player, 52 players per team, 8 teams, 416 players total.

Footballscoop.com reported the teams coaching salaries. Each coaching staff payroll is roughly 4 million per season. That’s 32 million dollars for all 8 staffs. Not counting general managers, equipment managers, training staff etc

So between players and coaching staffs. That’s a 61 million dollar expense.

So how do you recoup it? Let’s assume that the league’s average ticket price is 35 dollars. Let’s also assume that the league’s overall average attendance per game is 20,000. Each team has 5 home games. On average per team, that would be 700,000 dollars per game earned from ticket sales. 5 games would net 3.5 million per team. Total that for 8 teams and you got 28 million dollars. So this area won’t break even alone. It won’t even pay for player salaries. Mind you, we don’t know the breakdown of how the league will split up profits from the games.

If the league is lucky. They’ll only lose 100 million this year.

[MikeSherman]

We all agree that they need a ton of money. My point is that we don't actually know how much they've already raised.

[XFL_FAN]

Getting to year two and playing it rests on the league finding funds fast.

We don't know how much funding they already have, do we? When they launched, Ebersol said they had enough for a 7-10 year runway. I sort of suspect that's bullshit, but we don't know what the runway actually is. I wouldn't assume that they necessarily need new investment to play Year 2.

All start ups lose money. The cost of running a football league even at the bare bone minimum is in that 100 to 200 million dollar range. It could be more. Ebersol has mentioned that they are looking to raise 750 million through investing over the course of a 5 year span. Because that’s how much they need just to run the league, let alone be profitable.

There are so many expenses from insurance to advertising to production costs to travel expenses, lodging, venue rentals, equipment, technology costs etc etc etc

Not to mention office personnel and league personnel. The overall expenditure of the all areas, I mentioned will be in that 100 to 150 million range. Insurance alone costs tens of millions of dollars.

The total player payroll for all AAF 8 teams is 29 million dollars. 70k per player, 52 players per team, 8 teams, 416 players total.

Footballscoop.com reported the teams coaching salaries. Each coaching staff payroll is roughly 4 million per season. That’s 32 million dollars for all 8 staffs. Not counting general managers, equipment managers, training staff etc

So between players and coaching staffs. That’s a 61 million dollar expense.

So how do you recoup it? Let’s assume that the league’s average ticket price is 35 dollars. Let’s also assume that the league’s overall average attendance per game is 20,000. Each team has 5 home games. On average per team, that would be 700,000 dollars per game earned from ticket sales. 5 games would net 3.5 million per team. Total that for 8 teams and you got 28 million dollars. So this area won’t break even alone. It won’t even pay for player salaries. Mind you, we don’t know the breakdown of how the league will split up profits from the games.

If the league is lucky. They’ll only lose 100 million this year.

Here's the thing. If the AAF made money off of their TV deals they wouldn't be in such a hole.

The MLS makes 75 million a year with their TV deals with ESPN and Fox. I assume that the XFL will get something around that. Let's assume that the XFL gets 70 million on their TV deal (less games, bigger ratings, balances out).

Basing off of the AAF's coaching staff size and salary we'll say that the XFL pays 30 million for all their coaches.

Since the XFL will have 45 man rosters, "team 9" will cost around 3.375 million.

It'll cost 4.2 million for the practice squad players league wide.

I'll assume 1 "big player" per team at 250k. 4 "mid range" players at 175k per team, and that the rest of the team gets 85k to balance out the winning bonuses and such (75k base, 10k bonus avg.) So that's 4.4 million per team. So it'll cost around 43 million for all players.

We're at 73 million total, but don't forget the stadium deal, which basing off the St. Louis deal the XFL will pay around 4 million to play in the 8 stadiums.

Let's say that the XFL averages 20k league wide and their tickets average $35 like you said and they get 28 million.

The XFL would be much better set up to not lose 100 million year one, thanks to the "blockbuster" TV deal that they are supposed to get.

[MikeMitchell]

We all agree that they need a ton of money. My point is that we don't actually know how much they've already raised.

Benjamin Allbright says that the money comparison between the XFL and AAF is 9 to 1. This was on the recent Alliance to XFL podcast. My guess is that the AAF has the initial investment to carry them for a certain amount of time. Maybe it’s two years. In theory.

They are banking on a few things. That the league will grow in popularity and get more sponsors/advertisers. That ticket sales will improve with word of mouth and that by seasons end. They will secure a rights deal.

If they don’t. The league is going to need financial backing from the NFL. The UFL had billion dollar investors but once they started bleeding money. The financial backers bailed.

My guess is that the league makes it to year 2 but I wouldn’t guarantee it. Depends on how things look in April.

[XFL_FAN]

We all agree that they need a ton of money. My point is that we don't actually know how much they've already raised.

Benjamin Allbright says that the money comparison between the XFL and AAF is 9 to 1. This was on the recent Alliance to XFL podcast. My guess is that they have the initial investment to carry them for a certain amount of time. Maybe it’s two years. In theory.

They are banking on a few things. That the league will grow in popularity and get more sponsors/advertisers. That ticket sales will improve with word of mouth and that by seasons end. They will secure a rights deal.

If they don’t. The league is going to need financial backing from the NFL. The UFL has billion dollar investors but once they started bleeding money. The financial backers bailed.

My guess is that the league makes it to year 2 but I wouldn’t guarantee it. Depends on how things look in April.

I think the NFL will fork out money to the AAF like they did with the WLAF and then bail if/when they realize it's a losing proposition. To make sure I'm understanding this correctly, the XFL has 9 times moremoney than the AAF right now? I knew the XFL had more, I just didn't realize it was that much!

[MikeMitchell]

We all agree that they need a ton of money. My point is that we don't actually know how much they've already raised.

Benjamin Allbright says that the money comparison between the XFL and AAF is 9 to 1. This was on the recent Alliance to XFL podcast. My guess is that they have the initial investment to carry them for a certain amount of time. Maybe it’s two years. In theory.

They are banking on a few things. That the league will grow in popularity and get more sponsors/advertisers. That ticket sales will improve with word of mouth and that by seasons end. They will secure a rights deal.

If they don’t. The league is going to need financial backing from the NFL. The UFL has billion dollar investors but once they started bleeding money. The financial backers bailed.

My guess is that the league makes it to year 2 but I wouldn’t guarantee it. Depends on how things look in April.

I think the NFL will fork out money to the AAF like they did with the WLAF and then bail if/when they realize it's a losing proposition. To make sure I'm understanding this correctly, the XFL has 9 times moremoney than the AAF right now? I knew the XFL had more, I just didn't realize it was that much!

Allbright might be exaggerating the figure but the XFL has a 500 million dollar investment from one man already before any profits or other investors have jumped on board versus a company that’s hoping to raise that amount over a 3 to 4 year span. That’s a big difference. It’s like if you and I were hoping to buy the same house. You are willing to pay 100k down and I only have 20k but I am hoping to round up some loans/funds. I can take care of mortgage fees for awhile, but I am going to need to find a way to generate a larger investment or generate new income.