Last week, Sportico and Axios broke the news that the USFL and XFL are in talks regarding a possible merger that could happen in 2024. Axios reported that the merger would be structured as a merger of equals and would require regulatory approval.
According to Pro Football Newsroom’s James Larsen, Redbird Capital owner Gerry Cardinale initiated internal discussions with the USFL after the XFL Championship Game. It was reported that the XFL lost $60 million and rumors swirled that Redbird Capital were looking to recoup their losses. Furthermore, if the merger goes through, the league will likely have a new name.
The XFL put all of its teams in their home markets and most of them failed like the Vegas Vipers. The teams were to spread apart rather than in a hub model like the USFL did for two seasons. Because of how they have operated, they are in danger of folding. In 2021, the XFL tried to merge with the CFL but talks broke down and they went their separate ways.
These talks have caused quite a stir on social media with some people wanting the merger to happen and others do not want it to go through. In my opinion, I don’t think the USFL should merge with the XFL. It would be a grave mistake if this merger goes through and they need to stay the course.
For the last two seasons, the USFL has been operating a hub model. In 2022, they had all of their games played in Birmingham, Alabama, with the playoffs in Canton, Ohio.
This year, they expanded to Canton, Ohio, Detroit, Michigan, and Memphis, Tennessee, in addition to Birmingham hosting regular season games with Canton once again hosting the championship game. Operating in a hub model has allowed the league to save money on costs like travel, food, player salaries, etc.
Earlier this year, the USFL announced they would continue to use the hub model heading into the 2024 season. So far, tickets for Canton, Memphis, and Birmingham are on sale while the league renegotiates its lease for Ford Field, home of the Michigan Panthers. The question a lot of people have is will another market be added for the 2024 season.
Whether a merger happens or not, the USFL needs to evolve in year three. One business model the league should look into doing is copying the Major League Soccer formula. MLS is a single-entity league in which teams and player contracts are centrally owned by the league similar to how the USFL operates. The difference is MLS teams have an investor-operator who is also a shareholder in the league. This means that either an owner or ownership group looking to join the league pays a fee before getting authorized to run a club and become a partner in the league.
The clubs are owned by MLS. All of the revenue belongs to the league and not the individual teams. The investors get a certain percentage of profit in the league like media rights, sponsorships, ticket sales, and player sales. Because football does not have player transfer sales like soccer, the USFL could give the investor-operators a percentage in merchandising sales along with media rights, sponsorships, and ticket sales.
Last year, the USFL hired Allen & Co. to find minority investors to help fund the league. Allen & Co. helped the Denver Broncos get sold to Walmart heir Rob Walton for $4.65 billion. This year, there were a half-dozen people interested in buying the Washington Commanders (formerly Redskins and Football Team). Josh Harris along with a group of partners including Magic Johnson, David Blitzer, and more won the bid to buy the team for $6.05 billion.
The other person who put in a bid to buy the Commanders was Canadian billionaire Steve Apostolopoulos. If there were a half-dozen people interested in buying the Commanders, the USFL or Allen & Co. should reach out to them to see if they are interested in becoming an investor-operator for a USFL team. Imagine if they could get some of them to invest in the league, the USFL would continue to evolve into a legitimate alternative football league.
In the past two seasons, the USFL has released players to sign with NFL teams like KaVontae Turpin, Maurice Alexander, Alex McGough, Brandon Aubrey, and others. Some of them made it to the 53-man rosters, while others were regulated to the practice squad or released.
If the USFL brings these investor-operators in they can no longer release these players to the NFL. These investors are going to want the best players who are not in the NFL which means increasing the salaries and putting on a better on-the-field product.
The USFL is a prestigious league with a lot of history. A merger with the XFL will be detrimental. There is a fanbase looking for an alternative league to watch because they don’t like the NFL anymore due to politics. They also don’t like the XFL due to the politics of the owners Dwayne “The Rock” Johnson and Dany Garcia.
The USFL should absolutely follow the MLS business model moving forward. They don’t need the XFL to survive as many are claiming. They have done the right things by having games in a hub model and slowly expanding into new markets. Now, it’s time to take it to the next level.
