Where Did XFL Go Wrong?

Feb. 28, 2001 -- If the NFL were a limo, the XFL sees itself as a rusting Camaro that squeals around the corners yet is loads more fun to drive. But after four weeks, the upstart league appears headed for a breakdown.

The XFL, a $100 million joint venture between the World Wrestling Federation and NBC, billed itself as the anti-NFL — a working man's football league with hard hits, hard-bodied cheerleaders and hard-working players earning salaries of $35,000 to $50,000 plus bonuses for winning games.

The ratings, however, have continued to drop after a strong debut, and already one advertiser has bailed while others, like Burger King, are taking a wait-and-see approach.

But league spokesman Jeff Shapes defended the effort: "We're a new venture, and I think people shouldn't be judgmental after a few weeks."

Titillating Tomfoolery

Dick Ebersol, chairman of sports at NBC, in the past described the new league as "a good fun time on a Saturday night, a chance for viewers to see a splendid football game with a good deal of tomfoolery around the edges."

Some of that "tomfoolery" has included women frolicking in a hot tub behind the end zone in Los Angeles, players sporting nicknames on their jerseys like "Big Daddy" and "He Hate Me," and enough scantily clad cheerleaders to assure television won't lose its jiggle just because Baywatch is going off the air.

WWF star The Rock christened the league by threatening to throw the XFL's critics off the Golden Gate Bridge prior to the opening game, and Minnesota Gov. Jesse Ventura is moonlighting as a color commentator on XFL telecasts. XFL play has been billed as "smashmouth" football, with no "fair catch" on punt returns and a race to the pigskin to see who receives the opening kickoff.

And yet, despite this mix of sex, violence and controversial personalities, the ratings continue to plunge. After achieving ratings of 10.3 for the league's inaugural game featuring the Las Vegas Outlaws and New York/New Jersey Hitmen, the XFL has seen its viewership base drop drastically. The upstart league's ratings in Week 2 fell to 5.1, followed by a 3.8.

Last Saturday's 2.6 rating for the game featuring the Hitmen against the Chicago Enforcers was the lowest-rated prime-time show ever among the three networks, according to The Associated Press.

NBC nevertheless reconfirmed its commitment to the league on Tuesday and said the ratings, on average, are still ahead of projections.

"This was a business decision for NBC," said Cameron Blanchard, director of communications for NBC Sports. "For us, it's a change in the way sports has done business in that there are no broadcast rights. … Also, in terms of producing it, it is financially more viable for us than entertainment programming."

Honda Pulls Out

Honda pulled its advertising last week, and the league has begun offering some free commercial time to keep advertisers happy. Still, not all XFL sponsors see the situation as entirely grim and are opting to stick with the league — at least for now.

"Certainly the XFL has had its ups and downs, but it's early on and there's no reason to jump the gun right now," said Andy Horrow, marketing manager for Gatorade, an XFL sponsor. "We'll take a hard look at it when the first season is over. But there's nothing really to react to right now, we feel."

About 70 percent of the XFL's ad inventory is sold for the regular season, with 30-second spots going for $140,000 to $150,000, according to Shapes.

While television viewers are not tuning in like before, the XFL maintains that the league is achieving great success at the stadium. Teams are averaging 28,000 spectators per game over four weeks — significantly higher than the 20,000 fans projected in their business plan, said Shapes.

The WWF, meanwhile, saw its fiscal third-quarter profit fall 26 percent due to increased spending to start the XFL. Net income for the quarter ending Jan. 26 was $11.7 million, or 16 cents a share, down from $15.7 million, or 23 cents a share a year ago. The WWF's live shows, weekly broadcasts and pay-per-view events pulled in $379 million in revenue last year, and its various television broadcasts achieve about 22 million viewers each week.

Tech-Savvy Audience Wants Tailored Broadcast

David Carter, head of the Sports Business Group, a California-based provider of strategic sports marketing services, said one of the problems is how to define success for the league.

"This is the first sports league that was developed strictly as a made-for-TV product," said Carter. "It's a hybrid — not quite entertainment, not quite football — and they're having a little bit of difficulty with it."

While the WWF is taking more of a risk because it's trying to extend its brand with the league, NBC's investment still could be regarded as a success if its other shows benefit.

"For NBC, defining success was using this made-for-TV programming as a way to prop up programming on their other shows," Carter said. "They're obviously going after that young male demographic, so they went after the league to promote other marketing of Saturday Night Live or the NBA on Sundays. They may not need to define success if they can catch the imagination of the viewers early, then it might translate to their other properties."

A league that was created for TV also struggles when two teams in major television markets — the Chicago Enforcers and New York/New Jersey Hitmen — have one win between them in four weeks.

A Harris Interactive poll of just under 500 viewers of the league's inaugural game found that while 75 percent of the respondents had considered themselves fans of WWF, 55 percent of all those polled said the XFL was worse than expected while people ages 18-24 responded the most favorably.

"The one thing that I found most fascinating from the data is the XFL has potential and they're mismarketing themselves," said Nadine Gelberg, executive director of sports research for Harris Interactive.

The data also showed that the crowd expressing early interest in the new league is tech-savvy, and Gelberg questions why the XFL — which does not have a single tech sponsor — has not done more to scale back on titillation and ramp up technology to aggressively pursue this audience. She recommends the league implement high-tech aspects into the telecast, such as a variation on the yellow first-down marker used by the NFL.

"This is not an audience that adheres to traditional kinds of sports," said Gelberg. "These are fans who are interested in new and different forms of sports and entertainment, and part of that profile is that they're interested in video games and technological advancements of the broadcast."

Defining the Message

Late-night talk show hosts often include the XFL in their punch lines, and sportswriters have criticized the quality of the product — the level of play is not on par with the NFL and the entertainment factor is suspect. The XFL needs to do a better job of reining in that criticism, experts say.

"I think [the XFL] needs to not allow other people to define what their chartered course is going to be," said Carter. "Media and others are looking at XFL fans and are asking what kind of ghoulish mentality does it take to follow this league. [The XFL] is letting comedians and others dress down their fan base."

Overemphasizing the XFL as the anti-NFL also poses some drawbacks.

"The league can't alienate a very important base," Carter said. "Their very flagrant shots at the established sports leagues could hurt them because their broadcasting partner, NBC, shows the NBA. So there's a very fine line between getting the troops fired up to play and going over the top."

"This is critical for NBC," Carter continued. "They were criticized for devastating coverage of the Olympics. If this goes poorly, this would be two very big mistakes for them. It might give them cause to stick it out and exit gracefully after their commitment."

Recapturing some of that initial excitement for the league is critical to the XFL.

"I think a lot of people anticipated [the XFL] and were excited and looked forward to it, and it's going to be a real challenge — for the league, NBC and the sponsors as well — to overcome that first impression," said Gelberg.

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