The Inaugural (and Only) Season of the Xtreme Football League: A Case Study in Sports Entertainment

Article excerpt

The Xtreme Football League began play in 2001, but lasted for only a single season. It combined the marketing savvy of the World Wrestling Federation with NBC's broadcasting expertise to produce a distinctive sports entertainment product. This case study describes the events that lead to the introduction of the new league, and the league's only season. The factors that contributed to the demise of the XFL are discussed. Some implications of this short "experiment" with a new sports-entertainment league to sports marketers are provided.

Introduction

Sports entertainment is big business. Ticket revenue, food and beverage sales, seat licenses, athletic memorabilia and souvenir sales represent some of the lucrative opportunities in this industry. The U.S. Census estimated that spectator sports collected receipts of $13.656 billion during 1997.

Lowry (2003) reported on the staggering size of the National Football League (NFL). In 2002, the league earned revenues of $4.8 billion (this was double the revenue of just five years earlier). League offices estimate that revenues will climb by an additional $1 billion over the next three years. Recently, the NFL signed a $2 billion satellite-TV deal. It still has three years left on a lucrative $18 billion network and cable contract.

Football team values have risen considerably. In 1960, the Dallas Cowboys (an NFL expansion franchise) cost $600,000 to create. Almost forty years later, the franchise was valued at about $1 billion (Lambert (2001)). Noll and Zimbalist (1997) estimate that more than $7 billion will be spent on new facilities for professional sports teams before 2006.

In 2001, a new professional sports league, the Xtreme Football League (XFL), began play. League developers devoted conscientious effort to avoiding the pitfalls of previous football league failures. In 1974, the World Football League (WFL) was established. It lasted until midway through the 1975 season before ceasing operations. A major factor in the league's demise involved financial difficulties. Created in 1983, the United States Football League (USFL) eventually folded after three seasons. Exorbitant salaries paid to attract collegiate stars, an overly restrictive television contract, and the decision to undertake direct competition with the NFL contributed to the USFL's downfall. Despite the attempt to avoid earlier league mistakes, the XFL failed. This case study analyses the specific events and particular environment that helped to form the league. We address the developments that occurred during the league's short (12-week) run. We conclude with a discussion of some possible reasons why this new venture proved so disastrous.

The Pre-Game: A New League is Born

On February 3, 2000 (a full year prior to the league's first game), plans for the XFL were announced publicly at the World Wrestling Federation (WWF) entertainment complex in New York City's Times Square. Basil DeVito, Jr., league president, proclaimed this sport would be "pro football like you've never experienced it before." (XFL All Access (2001)). Indeed, the notion of combining the entertainment and marketing savvy of the WWF with professional football seemed intriguing. Under the leadership of Vince McMahon, the WWF was a global entertainment leader. It produced quarterly revenues of around $100 million, with an estimated weekly global viewership of 500 million (www.wwf.com).

Less than two months after the league's initial inception, the WWF and the National Broadcasting Company (NBC) announced a strategic partnership to jointly own and operate the league. Regarding this new opportunity, Dick Ebersol, Chairman of NBC Sports, suggested that "we think of ourselves as the 'Xtra Fun League." (XFL All Access (2001)). Certainly, NBC's foray into this sports broadcasting venture was not surprising. It had lost its coveted NFL package after the 1997 season. Moreover, it had recently failed to put together a summer football league with the Turner Broadcasting System. …