Rumors Going Around That The AAF Is Looking For 4 Expansion Teams Next Year

[XFL_FAN]

https://mobile.twitter.com/AAFfanNetwor ... 79200?s=19

Take it with a grain of salt for now, but if the AAF does this it'll be a big mistake. One of the reasons the USFL failed was rapid expansion. Adding 4 teams would dilute their product more. Maybe the AAF should be more worried about getting through their 1st season than adding 4 more teams after it. Man, I can't wait for "disciplined descision-making" football in 2020.

[XtremeFanForever]

https://mobile.twitter.com/AAFfanNetwor ... 79200?s=19

Take it with a grain of salt for now, but if the AAF does this it'll be a big mistake. One of the reasons the USFL failed was rapid expansion. Adding 4 teams would dilute their product more. Maybe the AAF should be more worried about getting through their 1st season than adding 4 more teams after it. Man, I can't wait for "disciplined descision-making" football in 2020.

If they expand into the major markets (i.e. the cryptic reference to New York) then this could cause a problem for the XFL. I don't think the AAF's one-year jump start, by itself, will give them much of an advantage; largely because they went after such small markets. The XFL could've done just fine had they taken the lion's share of the NYC, LA, DC, etc. markets. But getting a foothold in the spring football viewership combined with taking a share of the major TV markets could be a problem. It'll really be too bad if they go after XFL cities, I think the leagues can co-exist but splitting the markets between two leagues is only going to hurt everyone.

Ultimately, though, whoever puts out the best product will come out on top. I think you're right, the AAF is gambling here by potentially over-exerting themselves.

[Logofan]

https://mobile.twitter.com/AAFfanNetwor ... 79200?s=19

Expansion isn't what killed the USFL, spending too much money on players and then trying to move to the fall did.

The escalating bidding war was a double-edged sword as costs were out of control, but the other side of the sword was that the USFL was able to get marquee names and talent to help their credibility and play level. After the $1 anti-trust decision by the dumbest jury on the planet, it was all over.

I think what hurt the USFL more than the rapid expansion was some of the owners who were granted franchises. LA, SA and Pitt all suffered due to owners being unable or unwilling to keep their franchises afloat. Einhorn *could* have easily kept the Blitz going but suspended them. And then there was Weiser buying then walking away from the Federals and the deal to move them to Miami under the coaching of Schnellenberger.

[MikeMitchell]

You knew that these rumors would come almost instantly.

If the NFL is going to fund the AAF. They could realistically expand. If they are not, The AAF better find a way to be profitable. They are not doing it from a sponsorship level or through fantasy football or gambling yet. Their TV deals are almost barter deals.

It’s really fishy if the AAF goes into XFL markets. Especially if it’s St. Louis. That would reek of an attempt to hurt the XFL.

New York, I can understand if they actually land a team in the city. I’d say the home of the Red Bulls is a possibility. 12 teams would be ideal. I would focus on Smaller stadiums in Columbus, Portland, Chicago or maybe Oklahoma. I would go New York, Chicago and two teams out west. Maybe an Oakland or San Fran, just for tv homes, if their CBS deal expands.

The AAF has to keep momentum and build up their current markets. The Hotshots drew poorly but that looks like a championship contender, so maybe they can build up a following. If the team was bad, I could see crowds in that UFL 2 thousand range. I’d worry about markets like Birmingham and Memphis, which have a history of failing in other leagues.

[MikeSherman]

I think the USFL comparisons are misplaced, since the USFL had an ownership model.

If you have eight owners and the pie is split eight ways, then to justify a 50% expansion you need to be make the pie twice as big. Imagine you make a $100 profit in Year 1. That gives you a per-team profit of $100 / 8 = $12.5. To equal that with 12 teams, you need to make at least $150 ($12.5*12) in Year 2.

But that's not how it works with a single entity, because it doesn't matter how many teams or units you have; you just have to make the pie bigger. If adding 4 teams moves the league from $100 to $101, it's worth doing.

Of course, neither the USFL as a whole (I think the Gold might have turned a small profit in Year 1 and maybe the Bandits and some others came close to breaking even) nor the AAF was/will be profitable in Year 1. However, a lot of the AAF's costs are fixed. So if the operating cost of two additional teams is lower than the additional revenue they can bring in from one more broadcast, then they should do it.

I seriously doubt there's a market for that -- there barely seems to be a market for the four games they already have to offer -- but that's the scenario in which it makes sense. It wouldn't surprise me see the XFL go to 10 or 12 teams in Year 2.

More importantly, I think there's serious reason for concern in some of these AAF markets, especially Atlanta, so if they are going to take the field in 2020, they need to be looking at new homes either way. Framing it as expansion rather than relocation is a prudent PR move.

[MikeSherman]

Random thought, but I've been thinking about the comments I've seen Luck make in a few places about the USFL. Here's an example:

“If the USFL had stayed in the spring, they probably would have 18 teams now and be a valuable sports property and they would be doing a bunch of things differently from the NFL as an alternative league,” he said.

https://www.houstonchronicle.com/sports ... 592523.php

Why 18 and not 16 or 20? Maybe there's nothing to it, but 18 teams (and thus nine games) strikes me as the max for broadcast windows.

1. Thursday night
2. Friday night
3. Saturday early afternoon
4. Saturday late afternoon
5. Saturday night
6. Sunday early afternoon
7. Sunday late afternoon
8. Sunday night
9. Monday night

[MikeMitchell]

Random thought, but I've been thinking about the comments I've seen Luck make in a few places about the USFL. Here's an example:

“If the USFL had stayed in the spring, they probably would have 18 teams now and be a valuable sports property and they would be doing a bunch of things differently from the NFL as an alternative league,” he said.

https://www.houstonchronicle.com/sports ... 592523.php

Why 18 and not 16 or 20? Maybe there's nothing to it, but 18 teams (and thus nine games) strikes me as the max for broadcast windows.

1. Thursday night
2. Friday night
3. Saturday early afternoon
4. Saturday late afternoon
5. Saturday night
6. Sunday early afternoon
7. Sunday late afternoon
8. Sunday night
9. Monday night

Nothing screams a league folding like rushing into expansion. 12 to 16 teams should be the max.

Failed leagues have a history of expanding too soon or immediately relocating teams. It’s a recipe for failure and a true sign of instability. The USFL tried to hard to expand their league. They had teams bleeding money, they couldn’t even afford to feed their players or equip them. You gotta make profits before you can expand.

Unless the NFL wants to buy a stake in the AAF and burn 100 million dollars for fun. The AAF has to prove that they can make money before expanding. They already have teams behind the 8 ball already financially

[MikeSherman]

Again, you don't necessarily have to be profitable. Marginal revenue just has to outstrip marginal cost.

These are made up numbers, but imagine that the XFL takes the field with 8 teams in 2020. It costs $100 to fund the league, $40 of which are fixed and $60 marginal -- it costs an extra $7.50 to move from 8 teams to 9 teams.

With 8 teams, the tickets, merchandise, and television revenue add up to $80. The league is earning $10 per team in gross revenue and they lost $20 on the season.

Should they expand? Even though they are not yet profitable, yes, assuming that they can sell the extra game for the same rate. Moving from 8 teams to 10 teams means that the costs are now $115, but the profits are now $100. Now they've only lost $15.

The break even point, with these fictional numbers, is 16 teams. Cost is $40 fixed + ($7.50 * 16) = $160. Revenue is $10 * 16 = $160.

I'm not saying any of this applies to the AAF -- if they're making $0 on each broadcast, it's pretty unlikely that marginal revenue is outstripping marginal cost. But it might to the XFL, so I think it's important to keep in mind and be precise in our language. The BIG3, for example, is expanding from eight to 12 this season. I doubt they were profitable at eight. But moving to 12 allows them to nearly double their number of broadcasts and live events. Scaling can be a legitimate strategy.

[MikeMitchell]

Random thought, but I've been thinking about the comments I've seen Luck make in a few places about the USFL. Here's an example:



https://www.houstonchronicle.com/sports ... 592523.php

Why 18 and not 16 or 20? Maybe there's nothing to it, but 18 teams (and thus nine games) strikes me as the max for broadcast windows.

1. Thursday night
2. Friday night
3. Saturday early afternoon
4. Saturday late afternoon
5. Saturday night
6. Sunday early afternoon
7. Sunday late afternoon
8. Sunday night
9. Monday night

Nothing screams a league folding like rushing into expansion. 12 to 16 teams should be the max.

Failed leagues have a history of expanding too soon or immediately relocating teams. It’s a recipe for failure and a true sign of instability. The USFL tried to hard to expand their league. They had teams bleeding money, they couldn’t even afford to feed their players or equip them. You gotta make profits before you can expand.

Unless the NFL wants to buy a stake in the AAF and burn 100 million dollars for fun. The AAF has to prove that they can make money before expanding. They already have teams behind the 8 ball already financially

You are basing the argument on a model where every team has a different owner. A single entity league (which both the AAF and XFL are) expansion indicates no such thing.

It costs money to build and field teams. Single entity or not. There's a reason why they start off with 8 rather than 32. You multiply the expenses by the amount of teams you have. If it costs you 100 million dollars in expenses to field all 8 teams, pay their staffs, players, rent venues, market, advertise, travel expenses etc.... It's going to cost you more to field more teams.

I think 2 to 4 teams is a reasonable number for expansion, provided that the league proves that it is profitable. That means that all of your existing teams need to get out of the red. You got to make money from TV, advertisers, sponsors and at the box office. If you are drawing 8,000 for one team and 12 thousand for another. Those teams are not going to stick around for very long.

[XFL_FAN]

Nothing screams a league folding like rushing into expansion. 12 to 16 teams should be the max.

Failed leagues have a history of expanding too soon or immediately relocating teams. It’s a recipe for failure and a true sign of instability. The USFL tried to hard to expand their league. They had teams bleeding money, they couldn’t even afford to feed their players or equip them. You gotta make profits before you can expand.

Unless the NFL wants to buy a stake in the AAF and burn 100 million dollars for fun. The AAF has to prove that they can make money before expanding. They already have teams behind the 8 ball already financially

You are basing the argument on a model where every team has a different owner. A single entity league (which both the AAF and XFL are) expansion indicates no such thing.

It costs money to build and field teams. Single entity or not. There's a reason why they start off with 8 rather than 32. You multiply the expenses by the amount of teams you have. If it costs you 100 million dollars in expenses to field all 8 teams, pay their staffs, players, rent venues, market, advertise, travel expenses etc.... It's going to cost you more to field more teams.

I think 2 to 4 teams is a reasonable number for expansion, provided that the league proves that it is profitable. That means that all of your existing teams need to get out of the red. You got to make money from TV, advertisers, sponsors and at the box office. If you are drawing 8,000 for one team and 12 thousand for another. Those teams are not going to stick around for very long.

Seeing the numbers on this TV deal is going to be very interesting. If they make a large sum of money then it will go a long way to the success to the XFL. If it's no money like the AAF then the XFL could be on the way out sooner than later. Fingers crossed...