The NFL has been away from L.A. for a long, long time. Now, a group of investors wants to bring professional football to Los Angeles next August. But they're not talking about an NFL team.
The new United Football League is set to score touchdowns next year with eight teams. In addition to Los Angeles, potential franchise cities include Las Vegas; San Antonio; Orlando, Fla.; Sacramento; Louisville, Ky.; Memphis, Tenn.; Oklahoma City; Birmingham, Ala.; and even Toronto and Mexico City. But L.A. is an essential component.
"We have to have a team in Los Angeles," said UFL co-founder Bill Hambrect, chairman and co-chief executive of financial services firm WR Hambrect & Co.
The league will have similar rules to the NFL. It will play professional outdoor football on Friday nights. League executives visited L.A. last week to interview potential franchise owners. Requirement: You have to be really, really rich.
The ownership and venue will be finalized over the next few weeks and an announcement is expected in December.
Other pro football leagues formed over the past three decades such as the USFL and XFL failed financially and folded within just a few years. They relied heavily on ticket sales and TV contracts to become profitable and expected to make money almost immediately.
So there's another requirement: Everybody has to be willing to lose money for a few years.
UFL investors have deep pockets who will guarantee salaries, including Hambrect and Tim Armstrong, a vice president at Google Inc. Those investors expect losses for up to the first five years and will not back out if the league fails to break even before then.
"Our owners will be people who can withstand losses for a five-year period," said Frank Vuono, chief operating officer.
The league won't be relying on ticket sales and TV alone. Revenue will come from sales of sports content on new media platforms, such as Internet sites and mobile phones.
Teams will initially have approximately $90 million in working capital. Owners will be expected to provide $30 million in capital with another $60 million coming from public offerings, according to UFL Commissioner Michael Huyghue. The league projects teams will have $30 million in annual operating expenses and there will be a salary cap of $20 million. Mark Cuban, owner of the NBA Dallas Mavericks, has already committed as the league's first franchise owner. He will purchase the rights for the Las Vegas franchise.
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