I figured I would jump on the bandwagon and post a few thoughts about the shutdown of the Alliance of American Football.
Here are 4 things I think we should have learned from the Alliance’s shutdown.
They didn’t seem to have a great handle on their business model:
It seems like from the start the league was saddled with costs that exceeded any reasonable likelihood that they would actually be able to be met by the revenues in the short term.
When you see the stories about the contractors and partners being stiffed for millions of dollars, it leads one to believe that the business model that the league started out with might have needed a little more stress testing.
Because when you look at the ratings and the attendance, I have a hard time faulting the people in charge of marketing and selling a new team in competitive markets when they might not have been getting a huge marketing lift from the league outside of the initial PR efforts.
We are no closer to knowing whether or not spring football is a good or bad idea:
I’m not sure who said it, but someone mentioned that the lesson they learned was that Americans love football in the fall.
I think that is right.
Anytime someone points to the idea of spring football, the first example given the example of the USFL.
The thing about the USFL going against the NFL was that the money involved was a lot smaller then and the ability to woo talent from colleges was greater.
The AAF was fighting a big battle by having a minor league product that was attempting to fill the same shoes of a major league product.
Does this mean that the XFL is doomed?
The XFL has the marketing muscle of Vince McMahon behind it.
But we still don’t know how people feel about spring football, especially when the names aren’t well known and the talent isn’t up to NFL or top-flight college levels in all cases.
The AAF highlights the continued need for better marketing in sports business:
I think too many teams and leagues have gotten comfortable with their partners doing much of the heavy lifting of marketing and selling their teams and their sports.
This halo effect can be enough to drive attention on TV and sell many tickets, but can it sustain it?
That’s the thing: if you study marketing for any length of time, you know that the best way to build a brand is with publicity.
You sustain it with advertising.
At a certain point, advertising starts to become less effective and you have to reinvent the way you sell yourself. I think that is where sports business as a whole is right now.
We need to see a massive rethinking of what we are selling, how we are selling it, and how it adds value to our customers’ lives.
The AAF proved this to an extent because in the lead up to the first game the league garnered some pretty great PR, people tuned in, and then their attention went somewhere else.
When everything is trying to move towards premium, nothing is premium:
I’ve written about this before and I’m sure I will write about this again.
In the case of the AAF, the pricing for game tickets was as high as $185 for basically a minor league product.
You couple this with the average cost for a family of four being $212 in MLB, $328 in the NBA, $373 in the NHL, and $437 for the NFL and you see that it is no wonder fans are staying away.
I mean for comparison, my Internet and cable package costs less than it costs to take a family of four to an NBA game and is only slightly higher than taking that family to a baseball game.
When you have a product like the NFL, I can see the higher prices, but for many teams with 40+ games a season to sell, there is just no sense in charging 1.5x a person’s cable bill and asking why someone might only go to one game a year.
What has happened due to this?
Attendance is down.
Don’t buy the hype about 95% attendance because those are often tickets distributed and not butts in seats and as I learned reading about the Premier League, even with all of the money flooding in, empty seats are bad for TV presentation.
In most cases, when I see something that isn’t selling or getting the attention it needs, I think it has a marketing problem. That goes for sports, services, or anything else.
In sports’ case, it is clear the live experience has a marketing problem. The challenge now is will anyone take action on solving it.
You tell me!