When the new XFL was announced — right now you’re saying, “Oh that’s right! I totally forgot about that whole XFL thing!” — part of the story was that Vince McMahon had cashed in $100 million of his WWE stock for the new football league.
And $100 million would have been a major financial commitment. It was actually just a taste.
ESPN’s Darren Rovell reported that McMahon has told people he actually plans to spend $500 million on the new football league. Mr. McMahon isn’t playing around.
McMahon is making a massive investment into the XFL
While McMahon’s WWE empire allows him to take a half-billion dollar gamble on football, it’s a sign of how serious he is about making the XFL work this time.
The first time the XFL debuted, it started great and fizzled fast. The league didn’t seem to know how to turn the ship back around, and couldn’t overcome its fatal flaw of lousy play on the field.
Most startup businesses need funding and patience. The XFL, which is slated to start in 2020 as one of two new start-up leagues planning to enter the market, seems to have both this time around.
“People were focused on the $100 million, but the truth is that doesn’t even get us to the 20-yard line,” league CEO and commissioner Oliver Luck told ESPN.
What is costing McMahon so much?
The biggest part of McMahon’s investment, Rovell said, are player salaries and injury insurance. ESPN, quoting Luck, said the teams will have 40-man rosters and the average salary will be about $75,000. Players who can command a higher salary will be paid more.
Luck told ESPN insurance is costly because there are “few participants who underwrite for this market anymore.”
It’s a glimpse into why there have been very few competitors to the NFL through the years, despite the fact that football is by far and away the most popular sport in America. It’s an expensive endeavor.
Why is McMahon going all-in on his rebooted football league?
We know what McMahon is spending his money on, but why? It’s reasonable if he thinks it’s a good business investment. There has been room for many years for a second professional football league. If another league got 10 percent of the NFL’s following, that wouldn’t be too bad.
But it seems like more than just an investment to McMahon. Perhaps McMahon is proud and the failure of the first XFL go-around in 2001 eats at him. He’s not used to losing. Maybe he dislikes the NFL and wants to knock it off its perch. It’s hard to know.
While the initial news that the XFL could be reborn seemed strange, it’s no joke for McMahon. Money talks, and McMahon’s investment tells us what he thinks of the XFL’s chances of succeeding.
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