It happens every year. Come New Year all I have to look forward to are The Super Bowl and the College Football Playoff. I played in high school and have been a dedicated fan all of my life. As a youngster I played outside with friends during the spring and winter. In high school I trained with the varsity team and even got some reps, but as an adult it's not so easy. Busy as I am I listen to Sirius XM, read my favorite teams blogs, and occasionally watch classic games as reruns. Still its not the same as watching or listening to a live game.
Major League Football (OTCQB:MLFB) is a relatively recent addition to the long list of attempts at alternative football leagues. I tried watching some in the past like the Arena Football League which struck me as strange, almost as foreign as the Canadian Football League. Other iterations have had such poor media and marketing relations they could not be found on any television network the average person would have access to, let alone a reasonable kickoff time.
For Live and Local Games I love what MLFB is trying to Offer
The company has spent a great deal of time and money in researching underserved markets. Not only that but they are working on locales that statistically have a higher interest in professional sports, especially football.
They have agreed to have zero presence in cities with a NFL or MLB presence which is an absolute must. I would imagine there would eventually be room for more teams in bigger established cities, but I think it's much better for the MLFB to try their hand at less competitive markets to see if this is really worth pursuing.
For local viewers and those who attend games the company has stated multiple times the ticket prices will be nearly a quarter of the cost of a professional or high-end collegiate team. The cost to see my beloved Michigan Wolverines is now approaching $100 a ticket! The company believes the cities they are targeting are much more sensitive to the prices on professional sports games and will much appreciate the difference in affordability.
The Promise of Great Interaction with Athletes and the Game
MLFB is at an advantage for being founded and starting at the height of social media and the ease with which the internet allows viewing and interaction between people. The company wants to use this to make a more inclusive game for fans.
One element they have talked about before includes greater fan interaction with players, allowing them to have direct contact with the players and to even occasionally have the chance to call plays live. This could work if the league has transition players (injured or aging NFL players and college players who fell out of favor or failed to make an NFL roster) that people actually care about. I know most NFL fans would love the opportunity to text their favorite players or request a play call to recreate a memorable moment.
Checking out the social media presence for the company right now is pretty bare and their Twitter feed has been dormant since May. Often social media is not going to translate directly into dollars, but in order to get enough people informed about the league and to prove to sponsors they have some clout it will need to be improved and grown in outreach.
The Dire Need for a Bridge between College Football and the NFL
It's worth mentioning that a number of NFL stars had to take a few years in perfecting their skills and showcasing them in another league before the NFL gave them a shot. With roster limits and salary caps NFL teams do need a better feeder for talent, one that is more fine-tuned than what is available and one that develops talent after college ball.
One hallmark of this league is their recognition of that need. Besides refusing to compete with the NFL in almost any way the company is pushing the game to be a more professional style of football as opposed to college play. Emphasis will be on pro-style quarterback development and attempting to dismantle the spread style offense which is dominate in college, but difficult to translate to the NFL.
The quarterback is one of the most precious positions to fill in the NFL, getting harder to do each year. Not only the starter, but healthy backups who can fill the roll right away are a prized commodity. NFL viewers saw this first hand with the Cleveland Browns, New England Patriots in the opening weeks of the season this year. The NFL as a whole would likely be willing to support such a service.
The company's television contract can be seen as both a strength and a weakness. Although we have seen a trend in satellite and cable cancellations over the last several years, the majority of football viewing, especially college, is made possible through premium television packages and viewing is strong.
The league has a two year contract with American Sports Network, which was supposed to begin with the delayed 2016 season. American Sports Network has syndicates all over The United States and showcases the majority of live college games featuring lesser known FBS conferences like the Big South or the Patriot League. This is the exact audience that is underserved in football coverage.
The Challenges are Plenty, but mostly Relate to Money
The inaugural season was supposed to begin this year, but was delayed likely due to funding and quite honestly this project being bigger than imagined. In the latest quarterly report MLFB estimates it needs additional funding of over $10 million by November to finish market reach and placement. The company also failed to pay rent on its Fort Lauderdale headquarters and is facing eviction.
The cancellation of this year's competitive play and the declaration of a developmental league has had most calling the whole thing bust. It can be especially true after the league gave all 500 players the option to sign with Canadian Football League (CFL) teams as well as advertised in the press that the year will be about "exposing you to NFL scouts and coaches." It certainly sounds like a copout. This is especially true because we have heard no evidence from the NFL that they are working with the MLFB.
They even caught negative press by financially charging potential players for tryouts well up to the news release of the season cancellation. In addition tickets have been sold, though to what quantity and which locales is not entirely known. Since the teams have not been named or assigned to their respective cities apparel is non-existent besides the league standard MLFB logo gear.
We also have no idea which cities the teams (which have yet to be named) were scheduled to reside. There are hints that Birmingham, Alabama, Akron, Ohio, and Orlando, Florida were a few of the larger markets, but the company has yet to secure rights to the respective stadiums in those locales.
I felt compelled to write this because I love football and genuinely want to see another league in the dark and dreary winter and spring. I also know the odds are terrible for success, both from a general market perspective and the team itself. Donald Trump and Vince McMahon couldn't even pull it off.
Though in situations like these emotional investing can easily take over. Who would not want to be the part owner of a professional sports franchise? The offer is tempting. It's like when I wrote about OMEX. How cool is it to own a piece of a company that goes treasure hunting for gold? When you look at the situation rationally, without even studying the numbers the picture changes.
Potential investors are weary that the stock is just waiting for PR opportunities for another round of funding that is promised yet never delivered, bringing the share price up just enough for holders to unload. This is not PR for the company and I have never owned nor will ever own this stock, let alone any other that trades at these levels and price ranges.
MLFB senior executive vice president Frank Murtha, a longtime sports lawyer and player agent said in February 2016, "This wasn't a few guys who decided to start a league over a cigar and a beer." Maybe not, but it sure feels like it.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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