The question of whether a first-class pro football league can thrive in the spring can now be answered: no. The costs of producing NFL-caliber football are far too high to be covered by the income available in the spring from network TV, and it seems there's no way to change that harsh truth.
Says USFL commissioner Chet Simmons, "What hurts most is that we've built something far beyond anything even we ourselves expected. Yet TV ratings are down and there's no sign that sufficient revenue is going to be available as things exist now. Frankly, I can't find a financial upside in our continuing to play in the spring."
To succeed, the USFL would have to find or invent a network—broadcast, not cable—willing to show weekly games in prime time and able to provide the expensive production facilities needed to televise five or six Sunday games regionally, thus increasing local exposure. This year ABC offered one or two national games on its Sunday telecasts and only the championship game in prime time.
"ABC won't do what we want it to," says Simmons, "and we're locked in with ABC. Frankly, I can't blame the network. The production costs of doing those extra games come right out of profits. They're satisfied with the ratings just as they are."
July 22, 1984
ABC's telecasts of USFL games fell from a 6.0 rating in 1983 to a 5.5 this season, but the network wasn't devastated, because that drop was roughly the same as the decrease all three networks have experienced of late in virtually all sports programming. Besides, ABC has always said its profit-loss line for USFL telecasts lies at a 5.0. However, because the USFL since last season had spent millions to lure superstars away from the NFL and opened six new franchises, the ratings drop was a powerful disappointment to the owners and players.
There's heavy irony in the bind the USFL finds itself in regarding ABC Sports. When the network signed a two-year $18 million contract with the league in May 1982—10 months before the USFL's first game—it lent the league credibility it couldn't have gotten elsewhere. As Simmons says, "They put us in business." However, with the high costs the league has assumed, it's ABC that could well put the USFL out of business.
The network uses the USFL as nice, low-rent programming to fill Sunday afternoon slots, much as it has used The Superstars and The American Sportsman. "As long as we were playing cheap spring football," says Simmons, "ABC's approach was all right." But owners such as New Jersey's Donald Trump and Los Angeles's J. William Oldenburg disdained the USFL's modest financial guidelines, and the league stopped being "cheap spring football." Team payrolls leaped from an average of $1.8 million in '83 to $2.8 million this season. To plug the dike, the league is trying to negotiate a salary-cap agreement with the USFL Players Association. ABC has chosen to exercise the first of two one-year options by offering a minimal $15 million fee for a third USFL season. That's cheap even for cheap spring football.
The USFL did better in its new contract with ESPN for exclusive cable rights. The numbers are $70 million for three years—1985, '86 and '87—a 536% increase over the current fee. Doesn't this indicate that the USFL is a huge success on cable TV? Unfortunately, no. Ted Turner, who owns the satellite superstation WTBS, made a wildly inflated bid of $60 million-plus for the USFL through 1988. ESPN, much against its financial good sense, had to outbid Turner because it couldn't afford to lose the USFL from its often unappealing 22-hour-a-day schedule. Without Turner's bid, USFL cable rights—the league drew a good cable rating of 2.9 for 36 games on ESPN this season—weren't worth half of what they brought.
Even though USFL owners have always grinned (though weakly) while acknowledging they will lose money for two or three years, the 1984 losses, despite a 9% increase in average attendance, exceeded their expectations. According to one owner, Los Angeles had a $15 million loss; Pittsburgh dropped $10 million and Chicago $6 million; Houston, Arizona, Memphis, Michigan and New Jersey lost about $5 million apiece; Washington and New Orleans each took a $4 million hit; Oakland, Oklahoma, Birmingham and Jacksonville, which had a low payroll and played to the league's highest average home attendance, 46,730, each lost $3 million or more; and San Antonio, Philadelphia and Denver, which was the sole USFL team to turn a profit last season, dropped $2 million apiece. Only the Tampa Bay Bandits made money—about $900,000. That's a combined loss of more than $80 million.
Can this go on? Of course not. Can it be stopped? There's one obvious way, but Simmons says, "There is absolutely no thought to folding up the league." And so? The USFL has hired two consulting firms—McKinsey and Co. and Skelly, Yankelovich and White—to find out exactly what its options are. No word is expected from them until August, but one of the possibilities they're examining—and the only one that will break ABC's stranglehold—is moving the USFL to a fall schedule. Critics say the league's high rollers see a move to the fall as the first step to eventually merging some USFL teams into the NFL. They point out that Trump, for instance, could pay $10 million for the New Jersey franchise, $10 million for decent players and $10 million to the NFL as an "initiation" fee, and end up with a New York-area franchise worth $60 million to $70 million.
But a move to the fall raises a host of questions. Where might the USFL show up on network TV in the fall? Simmons points out that there's a "window" on Sunday afternoons after 4 p.m., either on CBS or NBC—whichever one isn't carrying the NFL double-header that day. Would USFL teams already playing in NFL stadiums have access to those ball parks in the fall? And, ultimately, would the NFL absorb USFL franchises, knowing they could be encouraging other Daddy Warbuckses to start another new league for the purpose of elbowing their way into the NFL?
What we're dealing with here is desperation. As Simmons says, "Something has to happen by next season. As we are now, I can't see the league surviving."