Bill Hambrecht is a seventy-six-year-old Silicon Valley venture capitalist. During his long and lucrative business career, he helped take Apple Computer, Adobe Systems, and Amazon.com public, and pioneered the use of “open” initial public offerings, which make shares available to anyone and everyone who wants to invest. He is currently the chairman of W. R. Hambrecht, which invests in emerging technologies.
Like Joe, Hambrecht first caught the football bug in his teens and never seemed to quite shake it. Back in the mid-1950s, he played one season at Princeton as a blocking wing in the Tigers’ single-wing offense. Then he got hurt and never played another down. But that didn’t stop him from trying to get back into the game—on the ownership side.
Over the years, Hambrecht says, he has taken a look at various NFL franchises, but had never really believed he had a serious shot at owning one. The closest he came was in the mid-1980s, when he became an investor in the United States Football League’s Oakland Invaders.
He eventually decided that if he couldn’t own a team, he’d just start a league. Hambrecht says he first came up with the idea for the United Football League back in 1996. What he envisioned was something akin to an “off-Broadway” version of the NFL’s Broadway. He would put franchises in football-mad cities that did not have an NFL team. Ticket prices would be family friendly, in the range of $20 to $50. The players and coaches would be drawn from the vast pool of professional football talent that wasn’t, for whatever reason, currently employed by the NFL. The new league would have some differences that, in theory, could make it a looser, more fun version of football than the NFL: On defense, at least four defenders would have to be on the line of scrimmage with at least one hand on the ground, and you could blitz no more than six people at a time (the idea being that these defensive restrictions would make the league more passer friendly); there would be no “tuck rule,” that strange, hard-to-call rule that has caused controversy in the NFL (see: Tom Brady, New England Patriots, 2001 NFL playoffs); in overtime each team would get at least one possession; women would be included among the referees.
In rethinking the rules for the UFL, and by placing franchises in non-NFL cities, Hambrecht was looking to subvert an entrenched business model—just as he had done with his plan for open IPOs—and come up with something fresh and original. “No one believes me, but I started the UFL as a business decision,” says Hambrecht.
The timing, he thought, was perfect. In 1996 CBS had just lost its NFL television rights. Hambrecht began talks with the network about airing the UFL. And though he says negotiations initially looked promising, CBS eventually balked. But over the years that followed Hambrecht didn’t let his dream die.
In 2007 Hambrecht finally roped in some monied friends. Tim Armstrong, a former Google executive who is now the CEO of AOL, and Mark Cuban, the tech billionaire and owner of the NBA’s Dallas Mavericks, helped with some seed money. Hambrecht’s buddies Paul Pelosi, a California real estate investor (and the husband of Nancy), and William Mayer, a partner at Park Avenue Equity Partners and the former CEO of First Boston, came in later and bought pieces of franchises, to help defray the investment made by Hambrecht, who owned the majority of the league. Pelosi and Mayer each invested tens of millions of dollars.
And they started losing money right away.
The National Football League is a $9 billion behemoth that soaks up all noise that’s not its own. No professional football league has ever truly competed with, or even managed to last very long beside, the NFL, not since the American Football League successfully forced a merger with its older contemporary in 1970. But that fact hasn’t stopped wealthy men from giving it a shot.
The World Football League, backed in part by the Canadian movie producer John F. Bassett, folded partway through its second season in the mid-1970s. The United States Football League, despite procuring an actual television contract ($18 million for two years on ABC) and signing college superstars like Steve Young, Jim Kelly, and Herschel Walker, made it only three seasons. The XFL, a joint venture between the World Wrestling Federation (now known as “World Wrestling Entertainment”) and NBC that featured miked-up players and stripper-like cheerleaders, lasted one season before running out of money.
Even pro football leagues that play a slightly different game have struggled for relevance. The Canadian Football League hasn’t had any buzz since Doug Flutie left in 1997 to play for the NFL’s Buffalo Bills. And the Arena Football League, that fast-paced indoor hybrid of the game, went bankrupt in 2009 before reconstituting itself a year later in stripped-down form.
The NFL has tried its own hand at an alternative league, too, and even it failed. The idea behind the World League of American Football, which eventually became known as NFL Europe, was to broaden the game’s reach by playing in Europe, and to develop players for the American game. NFL Europe ceased operations in 2007 after fifteen money-losing seasons when NFL owners tired of putting up the dough to keep funding it.
Yet despite the decades of failures, there is still a fairly strong argument for an alternative league to the NFL, particularly one that’s set up to serve a developmental purpose. Good rookie football players slip through the NFL draft and free agency cracks every year. NFL veterans often actually do have something left in the tank. What these players need is a place to attempt to prove themselves.
There’s also the issue of injuries that occur during an NFL season. In 2010, 352 NFL players went on the season-ending injured reserve list, missing an average of nine and a half games, which is more than half the season. NFL teams have what’s known as practice squads of up to eight players apiece. But that’s not nearly enough to replace the injured. A developmental league would certainly help.
The list of marquee players who have played in developmental leagues—especially NFL Europe—and then gone on to become stars in the NFL is fairly impressive. Kurt Warner, a two-time NFL Most Valuable Player, played in both NFL Europe and the Arena Football League. James Harrison, the Steelers’ All-Pro linebacker and the 2008 NFL Defensive Player of the Year, is an NFL Europe veteran. Fred Jackson, the star running back for the Bills, toiled in an indoor league and NFL Europe for years. Quarterbacks Jake Delhomme and Brad Johnson, offensive lineman Brian Waters, defensive lineman La’Roi Glover, and kickers Adam Viniateri and David Akers were just a few of the other 250-plus players who made NFL teams after playing in NFL Europe. It’s very possible that these players would eventually have found homes in the NFL. But it’s inarguable that the time they spent in NFL Europe gave them the time and place to further develop their skills.
Alternative leagues—and again NFL Europe in particular—have also served another crucial function: they act as training grounds for coaches and referees, and laboratories in which the NFL can test potential new rules. In 2011 the NFL had three head coaches who had been in NFL Europe: Chan Gailey, Steve Spagnuolo, and Hue Jackson (though the latter two were fired after the 2011 season). Scott Green and Alberto Riveron, NFL refs, started in Europe. The two-point conversion, the current playoff overtime rules, and one-way radio communication between players and coaches were all first tried in Europe (so was awarding four points for a field goal of fifty yards or longer, but that one didn’t make the jump across the pond, much to Sebastian Janikowski’s chagrin).
Without a league like NFL Europe, the NFL relies on the college game—which, to be sure, is one of the greatest and cheapest (read: free) farm systems in the pro sports world—for the vast majority of its players, coaches, and innovations.
Hambrecht and his friends were betting that the UFL could help fill a real void.
In 2007 the owners of the UFL hired Michael Huyghue to be the commissioner of the new league. Huyghue is a 1983 graduate of Cornell, where he was a wide receiver on the football team. (While there, he ran routes against Joe’s Dartmouth defense three times. Cornell lost each game.) At age twenty-eight, he became the first black general manager in pro football history when he was hired by the WLAF’s Birmingham Fire. He later moved into vice-president roles at the NFL’s Detroit Lions and Jacksonville Jaguars, handling the team’s salary caps. With the Jaguars in “near financial ruin” at $23 million over the salary cap, according to NFL reporter Adam Schefter, Huyghue left the team to start a sports agency. He represented, among others, Adam “Pacman” Jones, Vince Wilfork, and Eric Crouch.
Huyghue is a charismatic man, warm, thoughtful, and always impeccably dressed. To his detractors, his charms merely serve to mask his flaws, the main one being the sin of financial mismanagement.
Huyghue and the UFL owners had grand visions for the league. They started with a plan for eight initial teams and player salaries that ranged from $100,000 to $1 million. It wasn’t NFL money, but it wasn’t the chump change that the Arena League paid its players ($400 per game). There was even talk about quickly expanding into Canada and Mexico.
But the financial crisis of 2008 put an end to most of those dreams. The league postponed its launch to 2009, and scaled back to four teams—in Orlando, Las Vegas, San Francisco, and New York. By having teams in the latter two cities, which between them host a total of three NFL teams, it went against its own mandate to put teams only in cities that didn’t have an NFL team. Those franchises were moved after the first season.
The product on the field was of some quality. It helped that the league was viewed as a last-chance ticket back to the NFL by some of the NFL’s former stars. Simeon Rice, Daunte Culpepper, and Dominic Rhodes all found homes there, playing alongside a slew of hungry rookies, many of whom were last cuts in NFL camps. When asked if his team could compete with an NFL team, Jim Fassel, who has coached the Las Vegas Locomotives since the league’s inception, claims that on his team’s better days, they could indeed beat a lower-tier NFL team. “We’ll never be better,” says Fassel. “The NFL has the money and the picks of the litter. But we could compete. We’re closer to the NFL than Triple-A baseball is to the major leagues.”
The high quality of play has a lot to do with the coaching as well. And, as with the players, the quality of that coaching has a lot to do with the NFL. Going into the 2011 season, the league had a stellar lineup of former NFL coaches (plus one former CEO of course) for its five teams—Schottenheimer, Green, Fassel, and Glanville—who for one reason or another, sometimes not very good reasons at all, had been deemed no longer fit for the NFL.
Like Virginia’s Schottenheimer, Dennis Green, the Sacramento Mountain Lions head coach, posted some superb regular-season records in the NFL, at least during his tenure in Minnesota. He led the Vikings to a 15-1 record one year and made the NFC Championship game twice, losing both times. His stint with his second NFL team, the Arizona Cardinals, is, for better or worse, remembered mostly for the nonsensical rant he delivered to the media after his team lost to the Chicago Bears on Monday Night Football. (“The Bears are what we thought they were…now if you want to crown them, then crown their ass! But they are who we thought they were!”) The outburst probably sealed his fate as an NFL coach for good, but it did provide him with a presumably lucrative career as a pitchman for a beer company.
Jim Fassel, the Las Vegas coach, was with the New York Giants from 1997 to 2003. The former NFL coach of the year (1997) made the playoffs three times and went to the Super Bowl in the 2000 season, where his Giants were manhandled by the Baltimore Ravens. After a bizarre loss to the San Francisco 49ers in the 2002 playoffs (the Giants blew a 38–14 third-quarter lead) and a 4-12 season in 2003, Fassel resigned and has never gotten another chance to be a head coach in the NFL.
The Hartford Colonials’ Jerry Glanville was the least accomplished of the quartet of former NFL coaches. During his nine-year NFL career with the Houston Oilers and the Atlanta Falcons, he was best known for his sidelines antics, all-black outfits, and for the fact that he frequently left game tickets at the will-call window for Elvis Presley. But even he made the playoffs four times.
Combined, these four men boasted fifty-four years of coaching experience and 431 wins in the NFL. That win total was greater than any single division of coaches in the NFL could claim at the start of the 2011 season. (Only the NFC East’s four coaches—which included veterans Mike Shanahan, Andy Reid, and Tom Coughlin—came close, with a combined 408.)
The UFL has given these men the chance to continue to do what they love. Possibly, it even gives them a chance to burnish their reputations enough to get back into the NFL.
Joe, of course, is the outlier, the business guy with exactly zero wins as a head coach at the professional or even collegiate level. His last win as a head coach came back in 1977—as the head coach of a high school team.
Not surprisingly, his hiring raised a few eyebrows among the league’s coaches. Fassel says his first thought upon hearing of Joe’s appointment was: What are we doing? If this guy is just doing this as a hobby, then I’m going to be offended. This is my profession. But Fassel says he talked to Joe and learned about his background and came away impressed. “I loved his passion,” he says. And he wasn’t worried about Joe’s coaching chops. “He’s a proven leader.” Fassel’s assessment, even down to some of the words he uses, is similar to what Tom Osborne had said when trying to talk Joe up to college athletic directors. “Coaching isn’t rocket science. You don’t have to be a great tactician, you just have to hire the right people, give them the tools, and motivate them and push them to greatness.”
Besides, there was some sound tactical logic behind hiring Joe. The league was a mess financially. With Joe, the UFL was getting a two-for-one deal. They got a coach. But they also got someone who could help them figure out how to clean up the finances of the Nighthawks (the team had lost $11 million in 2010)—and the league. “To me, that was the attraction of Joe, the financial stuff,” says Hambrecht. He certainly needed the help.
To be sure, any start-up venture—and especially one that is going up against an entity as powerful as the NFL—will incur losses, at least in the beginning. But the UFL’s first two years seemed even rockier than might have been expected. The league overestimated revenues and underestimated expenses. They were late in payments across the board, from concessionaires to its players (a few companies claim that they’ve still never been paid for the work they did for the league). The UFL failed to secure national media rights for its games—the lifeblood for any professional sports league—instead opting to pay HDNet and Versus for airtime. And given that the league was essentially acting as a farm system for the NFL, having already supplied their teams with more than a hundred players by the end of 2010, getting some kind of support from the NFL, financial or otherwise, seemed like a natural step. But the UFL never succeeded at establishing a working relationship with the NFL. There also seemed to be a serious imbalance in the league’s pay structure: the high-profile coaches made around $1 million for the season (Joe, not so high-profile, was being paid $400,000); player salaries, which started in the tens of thousands, had dropped to $5,000 per game (quarterbacks made slightly more).
At the beginning of its third season in 2011, the league’s financial situation seemed to be getting even worse. Mark Cuban, who had loaned the league $5 million in seed money (roughly the price of a solid backup quarterback in the NFL), was now suing to get that money back. (Cuban and Hambrecht would eventually work out a settlement, and Cuban says he still has a “debt and not an equity interest in the league.”)
The league still had no national media rights deal and looked like it would forgo it completely. Six million dollars left over in bills from 2010—most notably, for worker’s compensation—had not yet been paid. The Virginia Destroyers’ players had no pads or helmets. (One media pundit in Virginia took to calling the UFL the “Unreliable Football League.”) Most troubling, the league had built its season schedule with the expectation that the NFL would have some sort of work stoppage because of the lockout, either for part or all of its season. The UFL had bet it all on black.
All of these issues would come to a head in July, just when camps were scheduled to begin. That was when Huyghue and the UFL owners would decide to delay the start of the season by thirty days, giving themselves some time to plan and to try to come up with the funding they needed to save the season. And that was when they turned to Joe for help. He was in on nearly every important conference call. In August he flew to Martha’s Vineyard to meet Hambrecht and Huyghue and brainstorm. Joe never offered his own money. The league was the sort of unstable investment that he generally shied away from. But he did work hard on trying to solve the league’s problems throughout the season. “I always wanted him on the calls, though I don’t think he always wanted to do them,” says Huyghue. “I think he thought, Hey, Fassel is spending all day coaching his team, not on the phone. But Joe’s insight was invaluable. His take was fresh. He had no sacred cows.”
But Joe actually volunteered to be on the calls because while he had no financial stake in the league, he did have another stake, one that meant much more to him than money: He desperately wanted the season to be played as much as or more than anyone else. He needed the experience for his résumé. If giving them his financial advice would help make sure the season happened, then he was eager to do so. But money wasn’t the only problem the UFL had.
In the middle of August the league came up against another kind of trouble. Nevin Shapiro, a University of Miami booster who was in jail for coordinating a $930 million Ponzi scheme, told an interviewer that he had provided illegal benefits to seventy-two Miami athletes from 2002 to 2010. Shapiro had been a part owner of Huyghue’s sports agency. And in the interview, he claimed that Huyghue had helped him provide these “benefits” to the college athletes. Huyghue denied the allegations, and Hambrecht stood behind him. “There’s never been an ounce of evidence or proof that I did anything wrong,” says Huyghue. Still, the UFL’s image took yet another hit.
Huyghue says that during the thirty-day delay he actually suggested to the owners that they cancel the season and start fresh in 2012. But Hambrecht believed that losing the 2011 season would sound the death knell for the league. In the end, the owners found just enough money to start the 2011 season. They cut costs by killing the Hartford franchise (Jerry Glanville’s team) and by shortening both training camp (to two weeks) and the season (now six games instead of eight) for the four remaining teams. Somehow, the UFL’s 2011 season was on.
Hambrecht believed that playing the league’s third season would help him secure future investors, a media deal, or maybe even a partnership with the NFL. It was a Hail Mary pass, except that instead of throwing the ball from the 50-yard line, Hambrecht and the other owners were backed up to their own 1.