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Caution is new league's strength
It won't boom and bust like the AFL, an organizer says.
 
By MIKE BROWN World Sports Writer
Published: 9/27/2009  2:29 AM
Last Modified: 9/27/2009  6:42 AM

How can a new arena football league hope to survive when the Arena Football League couldn't?

That is likely to be the first question asked of organizers of a new league to be headquartered in Tulsa.

The new Arena Football 1 league will be announced in a 3:30 p.m. Monday press conference at the Crowne Plaza Hotel.

"We have the AFL's experience to go on," said Talons co-owner Paul Ross, who played an organizational role in the new league. "We're going to emphasize the good things it did and discard the bad things."

The AFL started with four teams in 1987, expanded to both coasts, developed a small but ardent fan base and operated for 22 years. Along the way, it spawned a developmental league called arenafootball2 (af2), in which the Talons operated for 10 seasons.

Where did the AFL go wrong? Think of the mythical Icarus, who flew too close to the sun on wings made of wax, and fell to Earth when the wings melted.

Think of the AFL the same way. Insiders say the league grew too quickly and made the mistake of trying to challenge the National Football League under former AFL president David Baker.

Player salaries and other expenses spiraled out of control.

In one report, the Chicago Rush generated $4.7 million in revenue, but incurred $6 million in costs the same year.

"It's simple. You can't operate a business by spending more money than you take in," said Jerry Kurz, the commissioner of the new league and a founding arena football partner.

When
the game's founder, Jim Foster, sold his Iowa Barnstormers franchise to a group of New York investors after the 2001 season, it was AFL's marquee team — a small-market franchise of competitive excellence on the model of the NFL's Green Bay Packers.

Iowa played to sellout crowds, regularly made the playoffs in their six seasons and played in two AFL championship games. But Foster couldn't make the finances work in the city of Des Moines, with a metro population of roughly 560,000 — about the size of Tulsa.

"How was I going to generate $1 million per year in corporate sponsorships in Des Moines, Iowa? Because that's what it was going to take to survive," Foster said in a Tulsa World interview in 2001.

Foster retained the rights to the "Barnstormers" name and fielded an af2 entry in 2001. The franchise rebooted under new ownership in 2008 and recaptured the hearts of Iowans, drawing over 9,000 per game in its first two af2 seasons in Des Moines' new Wells Fargo Arena.

Barring changes, the Barnstormers are one of the existing af2 franchises that will join Tulsa in the new league's top tier, sources say.

Iowa's big-league experience is instructive. Doing everything the right way, the Barnstormers couldn't survive under the AFL's reach-for-the-sky economic model. With the onset of the U.S. economic downturn in 2007, hardly anyone else in the league could either.

AFL's television contracts were of little help because NBC — and later ESPN — paid little for the broadcast rights. Instead, the networks joined the league in share-the-risks, share-the-benefits arrangements.

Ross said the new league hopes to hold down costs in two primary ways — with lower player salaries and by using the same single-entity model that kept af2 afloat when the AFL canceled its 2009 season.

Under the single-entity concept, the franchises are owned by the league, and owners pay to operate individual teams. In turn, teams receive lower group rates on costly items such as health insurance and equipment.

Some owners favored the single-entity idea when the AFL sought to reorganize under a new economic model. But a consensus could never be reached, and the league folded in August.

AFL teams had a salary cap of slightly over $2 million. By comparison, the Talons' af2 payroll was around $200,000 per year.

Ross said players in the new league will be paid more than af2's $200 per game, but probably less than the AFL's union-mandated minimum of $1,800 per game — at least in the beginning. Salaries could rise if outside factors allow, such as an improving economy.

Said Kurz: "It's a business model with an economic forecast, one that does not price us out of certain economic situations."


Mike Brown 581-8390
mike.brown@tulsaworld.com
By MIKE BROWN World Sports Writer

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