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Some were optimistic the American Alliance for Football (AAF) would survive as a developmental league for the NFL. Some thought it might fill the void the NFL leaves after the Super Bowl. Others laid odds enhanced in-game betting would draw interest. Still others thought the people involved, Bill Polian, Charlie Ebersol, and even a few good friends of my own might make the difference. They never had a chance.
If the AAF’s oft-cited people and philosophy made up two of the 6 P’s in marketing strategy, that would be great. But, we know from our introductory marketing classes that marketing strategy consists of the target market and the marketing mix of 4 P’s including product, place, price and promotion. Some try to market the 5 P’s to include people, but people without the first four are still short one marketing strategy.
Why the AAF failed
The first and most crucial strategic step is defining the target market and assessing viability given the marketing mix. As with past (see XFL) and future league failures (see XFL), the AAF believed demand derived from the NFL would keep them afloat. The NFL promotes the best product in the right places and times at prices fans are willing to pay. Any competitive or complimentary league will have an inferior product at inferior places at times fans are less willing to pay. Let’s begin with the product.
If AT&T made a commercial with the AAF it would have to be that the product was “just ok.” True, the players and coaches are the best the league could get. As much as you and I might like the people in the AAF, the best players and coaches are in the NFL.
Had the NFL agreed to allow the AAF to operate more like the developmental league the NBA has with the G-League, we might have had more hope. The problem is this: If the AAF wanted to operate like successful minor leagues, they would adopt similar strategies to play in places (stadiums and cities) that fit demand at times people follow the sport (in-season) and promote the experience more than the product. The reality is they positioned the product as an extension of the NFL (season), which doesn’t fit with fan expectations and perceptions.
Major League Soccer helped itself grow by building soccer-specific stadiums sized to fit the crowd to maximize the experience close to the pitch. Minor league ballparks are built to accommodate demand and to facilitate the entertainment experience.
What about the AAF? Aside from Atlanta (24,333, Georgia State Stadium), teams played in cavernous older stadiums ranging in capacity from 44,206 (Orlando, Spectrum Stadium) to 71,594 (Birmingham, Legion Field). Most are on university campuses. Average attendance through the eight weeks was 15,292, with Arizona and Salt Lake averaging below 10,000. Even the best crowds (San Antonio with 27,721) left stadiums half-empty, or half-full, dependent on what’s in your glass at the moment.
Place includes media distribution channels, which also provides promotion value and revenue. The NFL Network, TNT, CBS and ESPN broadcast deals did promise opportunities to keep games in front of fans. Some touted the fact that broadcasts reached more viewers than other less-watched sports fare. But this is a bit like Fulham saying they are better than the EFL teams they will soon rejoin. The goal is to perform at a level that generates more revenue to continue improving the product.
The reason attendance and broadcast ratings matter is because sponsor dollars follow people and eyeballs. Leagues with lower national broadcast ratings (compared to the NFL) maximize attendance revenue with great fan experience and engagement among highly passionate regional fan bases. Sponsors benefit from the lean-in factor of fans watching their favorite teams on the regional sports networks.
The AAF gambled that in-game betting would boost engagement. Sports gambling is driven by data and passion. Fantasy leagues are popular because the wealth of historical data gives fans reason to think they can outplay the odds. Betting on sports relies heavily on fan passion for specific star players and teams. With limited historical data and limited passion for players that missed the NFL, it turns out to be more of a crap shoot.
Perceived value is what one gets for what one gives. Given the product, place, and promotion, not enough fans were willing to spend $15 to $185 (Arizona’s price range) to attend a game. By all appearances, even those who bought were not likely to show, as the slim announced crowds at times doubled those on hand. The view from the stands or the sofa make it difficult to convince buyers they need to attend or watch.
As one executive friend put it, these new leagues solve a problem no one has. He’s right. Until the NFL finds the right partners for a true developmental league that works like the G-league or minor league baseball at the right places at the right times, no future professional football league positioned as an extension or as competition to the NFL will survive.
April 3, 2019 at 07:48PM
Forbes – Entrepreneurs