As negotiations for the financial reorganization of the Arena Football League happens behind closed doors, players are upset that they are not part of the dialogue about the team’s future.
As negotiations for the financial reorganization of the Arena Football League happen behind closed doors, players are upset that they are not part of the dialogue about the team’s future.
True, the players are at the bottom of the totem pole. But they’ve not been treated especially well by AFL owners, who shut down the league in December and scrapped the 2009 season without giving anyone a lot of information about what was going on with the league’s financials. And some of the players see owners apparently spending a lot of money on things other than arena football and wonder why that money isn’t spent propping up the league.
But that’s precisely the problem. The AFL isn’t a new entity in startup mode requiring infusions of capital: it’s a mature product that should be self-sustaining. True, the league set an attendance record in per-game average in 2008 (12,957), and in the past few years it’s added some high-profile owners: Jon Bon Jovi. Ron Jaworski and John Elway among them. It’s received some necessar buzz.
But the underlying problem with AFL football is the limited revenue potential at the arena itself. NFL football works because it attracts 70,000+ fans a game — paying premium prices — backed by some very hefty TV contract and licensing deals. Economically, the NFL can get away with 10 home games per season because of the massive ancillary revenues.
But the AFL must do with smaller crowds attracted with family-friendly pricing. Its TV contract with ESPN is good, but not great. And licensing revenues are low.
How much of this can a restructuring address? In this economy, not much. Licensing and TV revenues are not going to magically triple. Sponsorship revenues surely would have taken a nosedive this year. And gate revenues would surely been a struggle as well.
So players have a reason to be nervous: their salaries are one of the few variables left under the control of the owners. But they’re really the small fish in the proceedings, and with salararies already absurdly low — between $30,000 and $50,000 per season — there’s not much more that can be cut.
Word is that the restructuring will focus on centralized ownership with centralized management, relying on national sponsorship revenues, with less emphasis on local sales. That is a recipe for disaster: all sports, at their core, are local. No sports league has every survived with centralized management or national sponsorship deals; the NFL comes closest, but having the richest TV deal in sports history covers up a multitude of issues. Not even MLB has been able to snare huge sponsorship deals.
Really, the fear shouldn’t be that owners will try to impose lower salaries: the fear should be that owners will never be able to work out the financials and walk away from a sport with limited appeal and revenue opportunities.