XFL owner Vince McMahon is willing to lose a bunch of money upfront on the league.
It’s not a secret at all that McMahon’s strategy is to dump a bunch of money into the football league to get it up and running for a fat TV deal down the road. Now, we have an idea on some of the numbers, and they’re pretty big. (RELATED: David Hookstead Is The True King In The North When It Comes To College Football)
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Dave Meltzer recently said the following during a Wrestling Observer Radio appearance, according to WrestleTalk.com:
The way it’s structured is that Vince is probably gonna lose $375 million on this league and he will and he knows and that’s what he’s gonna do and at the end of those three years the idea is that he will be able to get television deals that will total over $125 million a year which will cover his losses and then he’s okay. You know… there’s a lot of factors involved in that. Again, the ratings are one of them. If he can get… if these stations feel it’s valuable to pay that much. It’s not as long of a shot as everyone thinks.
I was talking with somebody this past Sunday about the XFL, and I pretty much said the same thing Meltzer is saying here.
Losing a bunch of money up front isn’t a big deal at all if it results in a big TV deal in the future. Right now, the games are broadcast on ESPN, ABC, and the Fox Sports affiliates.
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There isn’t TV money immediately for the XFL, but there’s immediate exposure. However, if the ratings stay strong through this year and next year, then the money will start pouring in from the networks airing the games.
That’s the way the business works, and nobody understands that better than McMahon. Losing $375 million over a couple years on upfront costs sounds like a ton, but it’s really not that bad in the long run.
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He could make that money back on one huge TV deal. Trust me, the XFL is going to be just fine.