Post
by Panthers14 » Wed Oct 15, 2008 1:08 pm
The New Orleans VooDoo folding is much more indicative to a systemic problem that now faces the AFL. The current situation is much more like the Major Indoor Soccer League breakup over ownership structure. In that case, half of that league wanted individual team ownership and the other half wanted a league wide ownership like MLS now has. Since a consensous could not be reached in the MISL, then the league disbanded to form two new leagues. I do not believe that this will happen with Arena Football; but I do believe that the old guard deep pocket investors are having a problem accepting single-entity ownership which is now being debated behind closed doors. I too believe that this is the reason that the commish resigned prior to the Arena Bowl. When a league has league wide ownership, then Franchises are sold to individual investors, but those investors have to ceed control of marketing and individual team structure to the league office, while those investors have only one vote as to the future of the respective franchise and must obide by the league decision. No wonder Benson decided to fold. The NFL does not have this set-up and although, the NFL can strongly admonish individual ownership decisions (i.e. Raiders move to L.A. then back to Oakland), the NFL can not stop such decisions. Thus, if the AFL moves to single-entity ownership, then a situation that may occur like the VooDoo Folding, could ultimatly be avoided. I.E. Benson would want out...then the league would take over the VooDoo. MLS now has this structure with investors buying into franchises like Red Bull and Auschewitz; but even those powerful investors have to ceed ultimate control of franchise decsions such as salary cap, expansion, and marketing over to the league office. MLS is growing and not teetering on the verge of collapse like the old NASL did. This is not to say that they can not screw up a good thing. If MLS over expands or does not adhere to a salary cap that makes sense, then yes...they too will go out of business someday. Until then, everybody now wants an MLS Franchise since the value of MLS under the single-entity structue is increasing...and we all know that $$$$$ talks.
Complicating matters could be the on-going talks among the AFL's owners over the direction of the league. Since last November, the AFL's board of directors has been looking into various ways to improve the league's financial position. Last summer, the AFL hired Game Plan, a financial consulting firm, to help find partners willing to pay for a stake that could range from a minority interest to a complete buyout of the league, according to a report in the Sports Business Journal. ESPN obtained a stake in the league in 2007 when it took over television broadcast rights from NBC. Some of the proposals, which involved franchise owners giving much of their control of the league to new investors, were made during a conference call Friday with the AFL's board of directors. It also doesn't help that the VooDoo is the secondary tenant at the New Orleans Arena, meaning the VooDoo must yield to the Hornets on most matters and can't generate much income from the building outside of ticket sales. Under terms of the Hornets' contract with the state, the NBA team gets first choice on playing dates at the building, and its sponsors receive exclusive advertising rights for all events at the Arena, including non-Hornets events. The Saints have a similar arrangement
at the Superdome.
So, the question is "Where do we go from here?" I truly believe that the sport will move to single-entity ownership to secure a financial footprint and ultimatly make a profit. Yes, I disagree with those of you who say that Arena Football can not make money. The NFL makes most of its profit through merchandise, TV Revenue, and Sponsorship endorsements...so too can Arena Football and any other sport...but those ventures will need to enforce restraint while most owners' egos are too big to accept that. Good luck AFL, we are all rooting for you!!!!!!!!!!!!!