“It tells me they need money.” The Athletic’s Daniel Kaplan on XFL Seeking Investors Ahead of Launch

by Reid Johnson

On the August 12th episode of The Markcast, we were fortunate enough to have Daniel Kaplan of The Athletic stop by to give his thoughts on the XFL, the USFL, and both spring “alt-football” entities now seeking investors and funding ahead of their upcoming seasons.

While the USFL has played its “inaugural” season (albeit in a less than ideal “hub” scenario in Birmingham, Alabama) they seem to be further ahead as compared to their counterpart the XFL, with reports out via Sportcio that the league has already begun searching for investors ahead of their 2023 February kickoff. Further clarification came out later in the week via XFL News Hub’s Mike Mitchell who reported that the XFL was willing to give up 35%-45% of their company in an attempt to raise $125 million in equity funding through the help of PJT Partners.

Although the league is not looking to sell off team franchises at this time, the announcement of this news, particularly the fact that the XFL is already looking to raise more capital before they’ve even played a season, left many spring “alt-football” enthusiasts worried.

I asked Daniel Kaplan what he made of the fact that the XFL was already seeking investors prior to its 2023 XFL season:

“It tells me they need money.”

While the USFL saved funds while housing and playing games for all 8 of its 2022 teams in Birmingham, the XFL has plans to fly the teams out to their various home markets for game days in hopes to engage the local fanbases.

“They're planning 8 Markets just because it teams are not gonna be training there, they still need marketing staff ticket staffs. The leases of these venues are expensive. They're playing in Seattle lumen field where the Seahawks play, that's not cheap. So there are a lot of expenses.”

With the XFL taking an additional year between purchasing the league out of bankruptcy and kickoff off in 2023, they allowed a gap in which the USFL could come in and play during the spring. Now that the USFL successfully completed its season, many have wondered about the viability of 2 competing spring football leagues. I asked Daniel Kaplan about that:

“The question is whether there's enough room in the marketplace for two of them. What we wrote about is the Super Bowl's gonna end, a week later the XFL is gonna kick-off and then you can have uninterrupted spring football probably to early the mid-July. Everyone figures there's an unlimited appetite for football and among the American consumer, this is surely gonna test it. That's a lot of football back to back.”

In regards to who Kaplan sees as the front-runner at this point between the XFL and the USFL in terms of owning the spring football marketplace:

“I don't think both can survive. That's for sure. Whether, whether they merge or, or whatnot. I don't see how two sprint football leagues can survive.”

Kaplan believes the XFL’s best shot to cement its place in the spring football landscape is by continuing to work with the NFL:

“If they're providing the, the service to the NFL, the argument has always been that the NFL, if they (XFL) continue to supply players, the NFL will wanna more formal relationship. If they prove to be a fertile breeding ground for NFL players, NFL hasn't had a minor league. So to speak since NFL Europe days, and it produced some great players.”

Daniel Kaplan and I go into more detail about the XFL vs. the USFL’s business model and talk more about the XFL’s recently announced 5 year TV deal with ESPN/Disney and more, be sure to check out the full interview below.