Star Power Alone Doesn’t Ensure Latest XFL Will Succeed

    • Workers comp among major issues as new owners take over XFL.
    • Expanded NFL rosters, practice squads limit XFL's talent pool.

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The odds the third rendition of the XFL can succeed are about as long as a league co-owner Dwayne Johnson disaster movie. 

While his film characters survived a skyscraper set aflame and a massive earthquake, there are more mundane realities that Johnson, businesswoman Dany Garcia and RedBird Capital have to deal with between their $15 million acquisition approved in bankruptcy court on Aug. 7 and when XFL 3.0 kicks off. 

One of the first challenges for The Rock and company will be managing workers compensation insurance.

“You have to account for injuries and football has nearly a 100% injury rate,” said former NFL executive Bill Polian. “Workers compensation is an absolutely huge problem. Some states won’t even write policies [for upstart professional football leagues]. When they do they are very difficult to access. I lost sleep over fear of a catastrophic injury that may not be covered and prevented us from getting help for a player soon enough.”

Polian, a longtime NFL GM who was at the helm when the Indianapolis Colts won Super Bowl XLI,  co-founded the Alliance of American Football that lasted eight weeks in 2019 before coffers ran dry. Like the XFL, it shuttered operations and filed for bankruptcy. “I know what our numbers were and there wasn’t light at the end of the tunnel,” Polian said. 

And there are other issues the new, new XFL will have to confront that the AAF didn’t: the XFL’s baggage, expanded NFL practice squads and the fallout from the pandemic. 

The first rendition of the XFL lasted one season in 2001. The second lasted five games as the league suspended play as a result of the pandemic in March. The XFL shuttered operations and laid off most of its staff and the league filed for bankruptcy protection in April.

There was a deal worked out with 300 unsecured creditors that were owed more than $3.4 million ahead of the Aug. 7 hearing. Those creditors originally had objected to the sale. The new ownership will have to work out deals with stadiums since only two venues out of the eight locations from 2020 haven’t either expired or been canceled per a bankruptcy filing in July: Dignity Health Sports Park (Carson, Calif.) and TDECU Stadium (Arlington, Tex.).

“I’m not sure there’s any goodwill left in the marketplace,” Polian said. “When you burn people once, that’s one thing. But it’s like that saying ‘Fool me once, shame on you. Fool me twice, shame on me,’ If I was a stadium operator, I would be hesitant about a new league — and that’s not to disparage The Rock or anyone else in the ownership group. It’s just a fact they are going to have to face.”

The new ownership group also could have the edge over WWE founder Vince McMahon, who pledged millions for the latest XFL endeavor before he pulled the plug as the pandemic hit.  

“They have a brand that can attract other investors,” said sports attorney Daniel Wallach of Wallach Legal LLC. “The fact The Rock is involved could attract other celebrities and athletes. He might be able to put together something unique that Vince McMahon would not have been able to accomplish. It’s a really exciting development.”

It will take tens of millions of dollars over several years for this XFL to work, if recent history of upstart leagues is bellwether. 

The NFL is a monolith that survived challenges by the USFL and no other league since the AFL — which ultimately merged with the NFL — has been able to challenge the shield’s dominance or even have sustained profitability. 

The NFL collective bargaining agreement with the NFLPA signed earlier this year also will take much of the XFL’s talent by the time the relaunch could have at least 120 players fewer to choose from by 2022. 

The NFL and NFLPA agreed to increase the practice squad in 2020 and 2021 from 10 to 12, and practice squads will grow to 14 in 2022. Teams can carry up to 55 players — up from 53 — starting in the upcoming season, meaning there’s more opportunities for practice squad players. 

NFL practice squad pay also swells to $11,500 per week in 2022 and players are eligible for benefits like 401(k). And there’s this provision: “No player who is under contract in another football league is eligible to sign an NFL Player Contract or a Practice Squad Player Contract.“

“That’s a hurdle that has nothing to do with who owns [the XFL]” Polian said. “Why would you leave an NFL facility with NFL money and NFL benefits to play in a new league?”

So, how could the XFL find a niche? 

“If you’re asking for my personal opinion, I think competing against the NFL is very, very risky business,” said Gary H. Leibowitz, Baltimore-based NFL agent and bankruptcy attorney at the firm Cole Schotz.  “That’s been proven by history. The only way it will work — and if you have the investors — is to somehow establish the league as a minor league system for the NFL. That’s what the NBA has with the G-League. The XFL would have to position itself like that.”

There’s no set timetable for the XFL’s latest relaunch, although sooner could be better. 

The pandemic has already forced college sports to pare down football schedules and two conferences — Ivy League and Big Sky — have already canceled fall sports. Meanwhile, the NCAA has only recently begun steps to allow athletes to be paid for name, image and likeness — steps that critics say don’t go far enough.

Schotz said there’s an opening for a feeder league since players need to be three years removed from high school to enter the NFL Draft if the college route becomes less attractive.

“The NCAA is used to groom players for the NFL,” Schotz said. “If there’s another option to get them on the field and into the gym where they can get paid, that grassroots approach could work.”