When billionaire rasslin’ tycoon Vince McMahon decided to reboot the XFL, he dumped enough of his own money into the league that it could last three years without taking in any other cash.
There’s a big difference, however, between “could last” and “would last.”
The COVID-19 global pandemic forced the league to join all other sports entities across the world and suspend play in March. Yet while the economic devastation has already taken its toll on the likes of the NBA, NHL and Major League Baseball, those leagues have enough long-term stability and capital to survive.
Obviously, that’s not the case for the XFL.
Last Friday the league announced that it was laying off all employees with no plans to return in 2021, and then on Monday it filed for Chapter 11 bankruptcy. Debts and assets ranging from $10 million to $50 million were listed in the filing, and seven of the XFL’s eight head coaches were among the top creditors.
So how did McMahon go from having plenty of disposable income to being forced to dispose of his second attempt at the XFL?
According to Dave Meltzer of Wrestling Observer Radio, McMahon was prepared to lose $375 million during the first three years of the XFL revival. After that, he expected to secure TV deals totaling $125 million annually which – eventually – would help him recoup his losses. Ultimately, of course, the goal was to see the XFL finish each year in the black and become a staple of the spring sports scene.
But back in January Bloomberg reported that McMahon’s primary business, World Wrestling Entertainment, lost more than $1 billion in market value following a corporate shakeup, so suddenly the XFL went from something of a vanity project for McMahon to a venture much more important to his bottom line.
Then came the pandemic.
XFL employees were paid up through what would’ve been the final week of the 10-game schedule. But while they were supposed to be on the payroll at least through playoffs that never came, the axe fell on Good Friday. McMahon had lost millions more dollars, and I’m guessing he’s unwilling to lose any more on offseason football.
Thus will be the conundrum of any person or group going forward who wants to create what has yet to be created – an alternative American football league with staying power. Simply put, you have to be willing and able to lose millions and millions of dollars for who knows how many years on the slim hope that eventually you might – might – make a profit.
Back when the new XFL kicked off I was asked how long I thought the league would last. I predicted a two-year run, figuring the novelty would wear off by then and McMahon would decide to cut his losses. Now we’ll never know, but had the pandemic not hit I still think that would’ve been the case.
With the notable exception of St. Louis, in-house fan support was starting to dip and TV ratings were sliding at the midway point of the league. If the season played out I think that trend would’ve continued (although not to the degree that it would cause McMahon to bail on it like he did the XFL’s one-and-done 2001 iteration).
But when the XFL returned in 2021, it would’ve done so without that new car smell. Plus, some of the stars established in its inaugural season would’ve moved on to the NFL, and each team would basically be starting from scratch again.
TV viewership for all programing tends to drop in the spring, so I find it difficult to believe the broadcast revenue McMahon was hoping for would ever materialize. I’m not confident the number of hardcore fans (like me) needed to turn a gap league into a box office success are there, either.
None of this is a criticism of the product itself; with the notable exception of the United States Football League, I think this was far and away the best spring circuit to come along. It had cool rules, good players and coaches, and overall it was minor league football done extremely well. Ultimately, though, it was not a moneymaker. No non-NFL pro football organization since the American Football League has turned a profit.
And regardless of how badly McMahon or anyone else wants a new football venture to succeed, I can’t imagine they’d be willing to endlessly lose money to keep one afloat.
COVID-19 has wreaked havoc on the economy, and I think it’ll be a long, long while before an entrepreneur gives spring pro football another try. But, it will happen eventually.
And when it does it’ll join the USFL, World League of American Football, NFL Europe, XFL 2001, the Alliance of American Football and XFL 2020 as good ideas that will never make enough dollars to make enough business sense.