AFL Considering ‘Travel League’ Model, Tour Could Serve to “Test-Drive Markets”

JohnWallStreet

The Albany Times Union reported on Tuesday (10.29) that the Arena Football League’s six organizations have suspended local operations. The threat of a multi-million-dollar lawsuit relating to workers compensation claims between 2009 and 2012 was cited as the catalyst for the decision. Commissioner Randall Boe (who took over in ’18) said it is too early to determine if the league will “completely suspend operations”, but that he hopes to have a decision “in the next several weeks”.

Executive Committee Chairman Ron Jaworski was more optimistic. The former Eagles QB told The Press of Atlantic City that “the AFL is not folding. All teams will be operated through the AFL office as we look to find new investors.” One league insider backed up Jaws’ comments saying, “I don’t think [the league] is at the finish line. We’re going to work hard to come up with a business model that works.

Howie Long-Short: The AFL restructured as a single-entity, with the league office taking control of all six clubs - existing team owners became shareholders in the league - prior to the ’18 season. Monumental Sports & Entertainment (which previously owned the Valor) CEO Jim Van Stone explained that the decision allowed the league to pool “all of [its] resources together under the same umbrella and to be a bit more entrepreneurial than one would under a traditional franchise model.” Commissioner Randall Boe said that the revamped business plan “paid dividends very quickly.” It just didn’t solve the league’s biggest problem, its lack of funding.

Should the league continue, it would certainly do so as a single entity. Doug Verb, who along with Jim Foster founded the AFL, explained that “sports leagues are only as strong as their weakest link” and while fan support has been strong in Albany, Philadelphia, Washington D.C. and Columbus (4 of the 6 markets the league operated in, in ’18), the arena league has historically struggled to find enough markets (and owners) capable of supporting teams. By keeping the entire operation under one roof, the league retains more control over market selection and can ensure its teams are being run properly. Of course, it’s harder to draw investors in when they don’t get the perk of being able to run their own pro sports franchise.

Leadership’s ability to identify a “path to financial solvency” will be critical in raising capital. One proposed solution - according to Boe, there really is no alternative - is to turn the AFL into a ‘traveling league’ (think: PLL). Instead of tying teams to individual markets, every player would be based in the same city and the games would be played in a different one each week. League officials have said the ideal investors are still “people with NBA and NHL backgrounds and those who operate large buildings.”

The appeal to a roadshow is that “it allows a lot of different markets that have never experienced the product before, to potentially sample it.” While it remains TBD if the travel model is a “better long-term fit” for arena football, several who have been around the league indicated that there’s little risk in finding out. If the AFL determines that the circus model isn’t growing the overall fan base, the tour stops can be used to “test ride markets that might be a better [fit for a permanent franchise] down the line.”

One hurdle that isn’t going away - even if the lawsuit does - is the need for and the exorbitant cost of worker’s compensation insurance. Verb explained that “the biggest problem overall with arena football is that players get hurt. Even though [the players are] not making that much money, there is not that much [league] revenue coming in; and the players still get paid when they have injuries. 

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