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AFL Centralizing
Joe Lemire
January 19, 2009
MANY SMALL pro sports circuits, such as MLS and the WNBA, begin as centrally owned businesses, grow and then sell franchises to individual owners. The 22-year-old Arena Football League is taking that trend in reverse. After announcing last month that the league would suspend its 2009 season and revamp its economic model, the AFL's executive committee is studying ways to centralize league business to reduce cost and increase efficiency. While each team would negotiate player contracts upon the league's expected return in '10, the AFL would, under one model, pay the salaries. In other models the league would consolidate sponsorship and merchandise sales as well as marketing and ticket distribution under the national office. "We'd be moving toward a more centralized model than even MLS," acting commissioner Ed Policy says.
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January 19, 2009

Afl Centralizing

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MANY SMALL pro sports circuits, such as MLS and the WNBA, begin as centrally owned businesses, grow and then sell franchises to individual owners. The 22-year-old Arena Football League is taking that trend in reverse. After announcing last month that the league would suspend its 2009 season and revamp its economic model, the AFL's executive committee is studying ways to centralize league business to reduce cost and increase efficiency. While each team would negotiate player contracts upon the league's expected return in '10, the AFL would, under one model, pay the salaries. In other models the league would consolidate sponsorship and merchandise sales as well as marketing and ticket distribution under the national office. "We'd be moving toward a more centralized model than even MLS," acting commissioner Ed Policy says.

Although more than 25 AFL games were on ESPN last season, and the league drew an average of about 13,000 fans, it was losing money. The national TV coverage generated little revenue because ESPN, a minority partner in the league, paid no rights fees; some teams were saddled with unfavorable arena leases; corporate sponsorship was projected to decline (mainly due to the national economy); and, says Columbus Destroyers managing partner Jim Renacci, who's leading the restructuring, players were earning too much. The collective bargaining agreement guaranteed players $1,798 a game and a team payroll of at least 85% of the $2 million salary cap.

Those numbers will drop. In December the players' association voted to cut the salary cap by $600,000 per team in a last-ditch effort to save the season, and after the CBA is restructured (the sides meet this week) the new ceiling should be comparable. The owners may also discuss lengthening the 16-game schedule by a couple of games, while some teams could relocate locally for lower arena rent. The changes may be for the better, but it's a precarious time for a league that instead of growing into its third decade is trying to be reborn.

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