THe UFL's Biggest Barrier to Entry

The NFL won’t admit this, but they are a monopoly.

I base this on the leading characteristic of a monopoly, as taught to me by the greatest economics professor of all time, Vincent D’Andrea. A monopoly is characterized by its formidable barriers to entry, and maintenance of limited to zero competition.

In Layman’s terms: not only can you not compete with the NFL, you can’t even feasibly think about it.

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The NFL is the most watched sport in this country, and their marketing people are well aware of that. Despite being a multi-billion dollar business; the element of broadcasting the NFL still somehow appears to be a privilege.

In 2001, the NFL completely cut ties with NBC, after NBC agreed to be the flagship network of the XFL. It took NBC more than five years to get NFL programming back on their network.

In 2004 the NFL demanded that ESPN cancel their highest rated, and most critically acclaimed original show to this date, “Playmakers.” The NFL insisted that it was due to the harsh light which football players were projected, but also threatened to pull Sunday Night Football from ESPN if they didn’t follow along.

Especially in a recession, high ratings for football games have been one of the only sure things in the television industry—which is one of the reasons why television networks like Fox are willing to do anything the NFL tells them to, even after paying an annual check of $550 million (in case you were unsure, $550 million for a year of television programming is a lot of money).

While I’m sure that someone with a much more expensive degree than mine could find something genuinely illegal about this, I am looking at this story in a different manner. Because for the first time since the folding of the USFL, there is another football league that has an honest to god great shot at taking off.

The United Football League (UFL) is making continuous splashes by acquiring great second-string NFL talent, and their business model certainly shows that they have learned from the mistakes of the leagues before them.

It starts with the entire league’s mission statement, which openly admits that the UFL is not an alternative to the NFL, but rather a supplemental league. The league’s founders even declare that “the UFL will field teams comprised of the best players in the world and tomorrow's rising stars.”

So here we have a league that admits it’s not competitively the same as the NFL, but rather a sophisticated and technically sound second league. And if their current actions are any indication, they are ready to back it up.

Their business plan is going to appeal to some big markets, but more importantly, every small market that the NFL has passed over. The first year will only feature four teams, but each team will play several games on a neutral site.

And it doesn’t take a rocket scientist to figure out that seats will be cheaper than they are in the NFL (hello Personal Seating Licenses).

Now I can hear the groans, “this is going to be bad football.” Well, it certainly won’t be NFL football. But I’m not sure that they are trying to be NFL football, and I think that is what has done in nearly every upstart league in the past.

And I’m not the only person buying into the hype. The four teams (Las Vegas, New York, San Francisco and Orlando) will be coached by three playoff experienced NFL head coaches and one renowned defensive coordinator.

Jim Fassel, Jim Haslett, Dennis Green, and Ted Cottrell are the four flagship coaches, and all four of them would without a doubt be coordinating the offense or defense of an NFL team right now, if it wasn’t for this.

Beyond that, the UFL also will run side by side with the NFL. Instead of trying to carry a usually exhausted fan base into March, the UFL will play its games on Tuesdays and Fridays in October and November.

So you’ve now heard about all of the UFL’s potential, but you’ve also heard about the NFL’s zero tolerance policy regarding competition. And this leads to what has the potential to be one of the biggest sports dramas of the decade.

The UFL can have all of the potential in the world, but if the games can’t make it to national television, this project is over before it even begins. And the fact that the NFL works with every major network station (and the biggest cable station) certainly doesn’t make things easier.

But that’s not to say the UFL won’t work. Especially with their mission statement in mind, the UFL may not just be a cheap alternative for the fans. But it may be a cheap alternative to some networks too. If a network like Spike or TNT (that already has a fleet of sports broadcasters under contract) could get their paws on the UFL, then this has a real shot.

There is a difference between great potential and great execution. And especially in this regard, history does not bode well for the UFL. But if you look simply at their business plan, their coaching staffs and their game play model, you can tell that the UFL has some really smart people pulling the strings here.

Realistically the ball is once again in the NFL’s court.