New league looking to challenge the NFL

New league looking to challenge the NFL
Thursday, May 31, 2007

A rival to the National Football League, funded by prominent San Francisco investment banker Bill Hambrecht and Google Inc. executive Tim Armstrong, is being planned for next summer, according to a spokeswoman for Hambrecht.

The United Football League hopes to field teams in eight cities that have no NFL franchises, including Las Vegas, Los Angeles and Mexico City.

The founders are counting on fan support and a cable television deal to make the league profitable after five years. Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team, already has signed on as team owner, according to a report Wednesday in the New York Times.

But taking on the NFL, among the most popular leagues in professional sports and a television ratings juggernaut, is risky. A number of upstarts have tried and failed, such as the XFL, which folded in 2001 after one season, the United States Football League, which finished the last of its three seasons in 1985, and the World Football League, which survived two seasons in the 1970s.

"The odds are against any competitive league that goes up against the NFL," said Dan Rascher, associate professor of sports management at the University of San Francisco. "Maybe if they play in the off-season -- there's plenty of football fans who want to see football 12 months a year."

Hambrecht and Armstrong were unavailable for comment. The NFL declined a request for an interview.

The new league is still in the early planning stages and is without players, coaches or much of an executive staff beyond two dot-com entrepreneurs who previously worked for the National Basketball Association.

The likelihood of a UFL team in the Bay Area is remote, given that there already are two established NFL franchises in the area to compete against -- the Oakland Raiders and the San Francisco 49ers.

Aside from Cuban, who is known for his bombast and iconoclastic business sense, no other owners are lined up for the league. Boone Pickens, a Texas billionaire, had intended to buy a team but recently pulled out, according to the Times.

Owners would pay $30 million for an initial half-interest in a team, and the league would own the other half. Teams later would sell shares to the public in an effort to raise an additional $60 million per franchise.

Star players, who demand multi-million-dollar salaries, are not likely to be recruited by the new league. Rather, lower tier players, including those cut from the NFL, will fill the ranks and be paid lower salaries.

Rascher supported the new league's strategy to target cities without NFL teams, saying that many large markets with existing stadiums are hungry for football. Keeping ticket prices low may lure fans who are loathe to pay for the NFL's pricier seats.

The New York Times first reported about the new league Wednesday. A Hambrecht spokeswoman confirmed that the article was accurate.

Hambrecht is the founder and chief executive of WR Hambrecht + Co, an investment bank known for championing initial public offerings that are priced in an auction rather than in back-room deals. He also was a minority investor in the USFL's Oakland Invaders until the league shut.

Armstrong is president of Google's advertising sales in North America and recently invested in a professional lacrosse franchise in Boston.

Both men have pledged $2 million for the league. In doing so, they join a long list of successful businessmen who have tried their hands at professional sports, including Cuban and Oracle's Larry Ellison, who races yachts.

Arena Football is now the only challenger to the NFL, and only to a limited extent. The upstart league, which plays in arenas that have a much smaller capacity than stadiums, fields eight-man teams and hold its season in the spring, so it doesn't compete with the NFL.

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