How the Arena Football League Made a Comeback: An Insider's Perspective

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Football is the most popular sport in the U.S., and it's not just the NFL that's taking advantage. America's other major pro football venture, the Arena Football League, has made quite a comeback. I recently spoke with an AFL insider to discover how it happened, and what the future holds.

A game of pure offense
For the uninitiated, arena football is the higher-paced, equally as exciting cousin of the NFL. Originally patented in 1990, its field is 50 yards long, bordered by padded walls, with enormous nets in each end zone.


Because of its short field and wide open playbook, game scores in the 50s are commonplace, and individual stat lines are video game-esque. The Las Vegas Gladiators' Kevin Prentiss, for example, holds the record for the most touchdowns in a game with nine. And before he won a Super Bowl in the NFL, Kurt Warner threw 183 touchdown passes in just 42 games for the AFL's Iowa Barnstormers.

The particularly exciting numbers
It's obvious why arena fans find the game exciting, but how many of them actually watch? Adam Robbins, the AFL's senior VP of corporate partnerships, shared that information with me this week. 

According to a study from the league and Scarborough Research, at least 20 million adults tune into the AFL every year. That's about a tenth as big as the NFL, but nothing to shrug off -- it's near the size of the entire fantasy football market. Robbins also reveals the league's total attendance, which hit 1.1 million last year, was up 5% from 2012, and this season, new teams in Los Angeles and Portland could mean more growth. 

With its latest expansion, the AFL now encompasses nine of the 25 largest television markets in America. Outliers include Des Moines' Iowa Barnstormers and the Spokane Shock, but none of the league's 14 teams sit outside the top 100.

Delving into the dollars and cents
Speaking of TV, 2014 marks the start of a new multi-year agreement with Disney's (NYSE: DIS  ) ESPN. According to the AFL, the deal gives ESPN, ESPN2, and ESPN News rights to over 10 games annually. ESPN3, the network's online streaming channel, could show an additional 75 games each year, if not more. To note, this is the league's first arrangement with ESPN since both sides' previous deal ended in 2009.

CBS  (NYSE: CBS  )  Sports Network, meanwhile, is in the second year of its agreement with the AFL. Like the ESPN deal, financial details are undisclosed, but Robbins tells me it runs through next season.
CBS Sports Network will air this weekend's AFL Hall of Fame Game in a Saturday night primetime slot, though the league is likely most excited by its move to ESPN.
Network U.S. Homes Reached
"Big Four" Average* 112.1M
ESPN 97.7M
ESPN2 97.7M
ESPNNews 74.7M
CBS Sports Network 53.0M

Estimates via TVByTheNumbers and Awful Announcing. *"Big Four" Average includes NBC, ABC, CBS and Fox.

Unlike CBS's smaller sports-centric network, the two biggest members of the ESPN family are watched by nearly 100 million homes, and they garner more interest than peers like Fox Sports 1 and NFL Network. Don't discount the added advantage the AFL will receive by being on SportsCenter. Highlights, particularly in arena football, can generate interest among casual fans.

While the value of AFL TV rights probably pale in comparison to those of the NFL, they're still worth millions. The average AFL franchise was valued at $20 million nearly a decade ago, so assuming modest growth, $25 million for each of the league's 14 teams isn't out of the question. That's about one-40th the size of the average billion-dollar NFL franchise.

This ratio implies that because the NFL's annual TV rights cost between $950 million and $1.9 billion depending on the network, the AFL's are worth somewhere between $20 million to $30 million a year.

The bottom line
Of course, these estimates aren't perfect. But, put simply, anything near eight figures is an enormous improvement over the league's financial state just a few short years ago. In 2009, the AFL was forced to cancel a full season before declaring bankruptcy. In the aftermath, its new ownership bought the entire league for a mere $6.1 million.

As Robbins is quick to point out, the league's new single-entity model, adopted five years ago, is a big reason for its comeback. By allowing the AFL to own the rights to its teams and players in a structure similar to Major League Soccer, it's "possible for teams to be more successful from a financial standpoint," he says.

Ultimately, this makes it easier for arena football to expand. Recent moves into L.A. and Portland are proof the model is working, and a new presence on ESPN should only help its popularity. While the NFL gets most of the attention, football fans should keep an eye on the AFL. The best may be yet to come.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 17, 2014, at 3:15 PM, pondee619 wrote:

    " Like the ESPN deal, financial details are undisclosed."

    Is there any income info available on the league or its teams? How is it possible to say a business entity has made a comeback without any financial info? Is ther anything to this "analysis" other than guess work and wishful thinking? Are CBS and ESPN paying the Arena Football League (the AFL is still the upstart league ((of Joe Willey, the Mad Bomber, Al Davis, that forced a merger with the old NFL) anything near the $20 to $30 million supposed above? Is the proclamation of a comeback based on anything more than "Of course, these estimates aren't perfect."?

  • Report this Comment On April 18, 2014, at 9:00 AM, nickp91 wrote:

    the KISS paid anything for the Los Angeles franchise

  • Report this Comment On July 10, 2014, at 12:39 AM, aflfan wrote:

    This is a terrible article. All of your estimates are based off of financials from 10 years ago, while completely ignoring the paragraph you wrote about the league going under just 5 years ago, and the entire league being bought for about 1/4th of the cost of a franchise from a decade ago. a decade ago, the league had franchises in the top 6 television markets. Only 1 of those franchises played in the 2010 rebirth year (the now defunct Chicago Rush), and only 2 play in the league right now (The San Jose Sabercats and the Philadelphia Soul). the New York Dragons, the Los Angeles Avengers, and the Dallas Desperados never saw a return, and a 2nd franchise has folded in Dallas since it's rebirth.

    The AFL's single entity model hurts when owners rack up a ton of debt and can not longer afford their franchise. at one point this year, the AFL had 2 teams under league control. that means that each owner has to pay their own franchise fees and 1/6th of another franchise's fees and debts. The Spokane Shock were considered to have the best owner and structural model. Their owner, Brady Nelson, realized that he could make money working for a team instead of losing money owning a team. the man who bought the team from Nelson, Nader Naini, says the team was swimming with debt when he bought it. If the shock had the best model, what does that say for the other teams?

    We don't know if CBS Sports Network and ESPN are even paying for coverage. A lot of people think that the AFL is paying CBS and ESPN for the coverage. It would make sense that afl would, considering that just in 2012, the Arena Bowl (the AFL's championship game) was delayed for several hours on NFL Network for Tim Tebow's first preseason game in a Jets uniform (They delayed a championship game for 12 tebow plays in a pointless game against the bengals 2nd team defense, and I almost guarantee it outdrew the arenabowl record) It ended up starting at like 10 pm local time in New Orleans. I'd pay too to get out of such a terrible position.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2918261, ~/Articles/ArticleHandler.aspx, 9/4/2015 11:57:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Jake Mann

Jake Mann covers sports, economics and politics for the Motley Fool.

Today's Market

updated 2 hours ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 4:00 PM
CBS $42.92 Down -0.89 -2.03%
CBS Corp CAPS Rating: ***
DIS $100.97 Down -1.02 -1.00%
Walt Disney CAPS Rating: *****