- The XFL has suspended operations with ‘no plans’ for 2021.
- Vince McMahon has put several hundred million dollars into the league.
- McMahon’s WWE stock has taken a beating during the coronavirus pandemic
It’s been a rough few months for everyone but Vince McMahon more so than others–at least from a financial standpoint. Vinny Mac won’t be missing any meals–he’s got a net worth of $1.9 billion after all. The bad news? This time last year he had a net worth of $2.9 billion. Losing a billion dollars in a matter of months is not a good thing even if you have a couple billion to spare. In all fairness to the WWE majordomo his company’s stock has taken a big hit in the past few months mostly due to circumstances beyond his control. The WWE’s share price is down 42% year to date. McMahon owns 28.7 million class B shares and 81,492 class A shares so you can do the math. Last year he sold approximately $300 million worth of his holdings which was used to fund his XFL venture.
That more than anything else has sealed the fate of the latest foray at creating a Spring pro football league, the XFL. On Friday, the league suspended operations and laid off the majority of their staff. They also made it clear that there were ‘no plans for 2021’. XFL COO Jeffrey Pollack broke the news to employees and players in a 10 minute conference call. Here’s the terse announcement released by the WWE:
“Given the uncertainty of the current environment, the XFL has suspended operations and is evaluating next steps.”
The league never explicitly acknowledged that this was the end of the road in their press release or the conference call but ESPN’s report on the XFL’s suspension of operations had a quote from an ‘unnamed source’ on the conference call who opined: “It’s done. It’s not coming back.”
ECONOMIC UNCERTAINTY AND VINCE MCMAHON’S SHIFTING PRIORITIES
As everyone knows this is the second incarnation of the XFL but this time around they focused on the football and midway through the season looked to be gaining some traction among fans in their local markets, TV viewers and sports bettors. The original XFL pretty much ran itself into the ground. XFL 2.0 appeared to learn from those missteps and given the talent level of the non-NFL players that made up their rosters put a decent product on the field.
The announcement was somewhat surprising–at least to anyone without knowledge of McMahon’s financial situation and the WWE stock performance this year. Initially, it looked like they were just in the same boat as every other major sports league in the world. They cancelled their regular season just over a month ago but at the time emphasized that they looked “forward to playing full seasons in 2021 and beyond.” A ‘thank you to the fans’ posted on the XFL website on March 21 also speaks of the league returning in 2021.
The only thing that really changed since then may have been Vince McMahon’s resolve in the face of future economic uncertainty. He’s also been more involved in the WWE’s creative product of late so he may have also concluded that he didn’t want to spread himself so thin on a personal level. In what is likely a related move McMahon has also made the call to return to live broadcasts of the wrestling promotion’s main weekly shows Raw, NXT and Smackdown. There’s speculation that he may have been under some pressure from broadcast partners NBC Universal and Fox to do so in hopes that ratings will improve.
Dave Meltzer at the Wrestling Observer said that the ‘writing was on the wall’ when the XFL refunded 2021 season ticket deposits:
Signs that the XFL was closing actually came right after we finished the issue when Sports Business Journal reported that the league would be refunding all deposits for 2021 season tickets, which was the first sign that they were not planning to return. At first, the league had announced that people who had tickets to games called off could use them as credit for 2021 games. When that happened, Sports Business Journal asked if they were planning on playing in 2021, and they got no answer back.
THE XFL’S PROACTIVE APPROACH TOWARD SPORTS BETTING
To their credit, the XFL made a strong effort to position their product as a viable option for the sports betting public. In a post mortem on the league, ESPN’s Kevin Seifert had this observation:
I don’t think it was that brazen, but the XFL definitely leaned into gambling far more than the NFL, NBA, NHL and Major League Baseball. Its plan was to “embrace the spread,” authorizing its broadcasters to openly discuss and display gambling activities, and it knew it could appeal to growth segments of the sports industry simply by not standing in the way of a gambling connection.
The always sharp Dave Tuley gave the ‘view from Vegas’ on XFL betting at VSIN. BTW, VSIN is offering free premium access until 7 days after the first major US sport returns. If you take them up on that offer and read through their archives you’ll be a much stronger sports bettor post pandemic than you were before. This isn’t paid promotion or anything–just a strong personal recommendation based on the quality of their work and expertise of their team. This article is behind a paywall but here’s the money shot. Since it won’t cost you anything the whole thing is worth reading:
I wouldn’t call the XFL an unqualified success, as ratings dropped and bookmakers never raved about the handle they received. But the consensus is it was a welcome addition to the betting menu each Saturday and Sunday along with the full slates of college and pro basketball and hockey. It was nice to have another option for those going through football withdrawal after the Super Bowl. Matthew Chaprales, head of content at PointsBet, said the handle was similar to an NBA game, with a boost in handle for games involving the New York Guardians due to their huge population base.
Despite not even making through their first season the XFL gave the elusive goal of a Spring football league a pretty good shot. Here’s what Kevin Siefert at ESPN had to say about the future prospects for Spring professional football:
It’s hard to imagine someone will try it anytime soon, if for no other reason than the likelihood of an extended economic downturn.
But in the bigger picture, we still haven’t seen proof of concept for an alternative football league. The XFL was the most promising attempt since the USFL in the 1980s. In the end, though, the last successful alternative football league in this country was the AFL, which merged with the NFL in 1970. No one has cracked the code, if there even is one.
Most sports business observers think that the other US pro sports leagues are in good enough financial shape to emerge from their hiatus relatively unscathed. Assuming that this is indeed the end of the road for the XFL they will be the first–and possibly only–league to go out of business due to the coronavirus pandemic.