Beacon on the Hill Sports Marketing

Purchasing a Franchise in a New, NFL-Quality Football League in 2014 for 2015

Joining the first successful NFL-like league since the 1960's American Football League: The A11 Football League

NOTE: This is a change in our focus and target. We found interest in UFL franchises in 2010 and 2011, but the UFL did not continue. We also investigated six other wannabe leagues. Our conclusion: the A11 is so far advanced of all others, and they project the highest chance for success. We went back to our original goal: finding investors for a franchise in a league best poised to be successful over the long terms and then consulting to others in their goal for a franchise.

TARGET: Investors seeking a franchise in a near–NFL-quality football league. Our league of choice: the A11FL, the newest gateway to sports-entertertainment-media success and profitability.

1. The A11FL seeks investors for teams on the West Coast (San Francisco Bay Area, Los Angeles), Mid-West (Chicago, Dallas), East Coast (New York-New Jersey, Tampa Bay), plus two yet to be announced
2. A11FL meets the seven key tests for successful investment in a new team in a new league:
   1. Spreadsheet test: minimally break even in third year and begin profitability
   2. Media test: contract with ESPN, OK to get revenue for local games that are not on ESPN
   3. Escrow test: half of $5M fee to launch league, other half for team in escrow until all teams funded
   4. NFL acceptance test: NFL seeks a league to give new guys reps who seek to play later in the NFL
   5. Now test: setting up two Showcase games in 2014, with full first season in 2015
   6. Open collaboration test for revenue generation: "we'll work with you," unleashing the local entrepreneurial spirit as well; as seen in our detailed 1 page lists (sponsorships, naming rights, joint ventures, etc.), based on our over decade of research:
      • One Page from Sports Illustrated 2011 on the Six Main Revenue / Wealth Drivers of the NFL
      • One Page on the Game Changers for Profitable Professional Sports Business Development
      • One Page Executive Summary on Revenues and Profits: How a Local Professional Football Team Makes Money
      • One Page on League and Franchises as Wealth Builders: Revenue Streams and Profit Returns on Investment
      • Detailed "YES!" Answer to "Can a Local Professional Football Team Make Money and Profit?"
   7. Flexible test: "we will work with you," open to suggestions, works collaboratively, not top down
3. The A11FL is a ground floor opportunity for savvy investors to have "coolest toy" for generating profits and fun
4. The A11FL has an abundance of former NFL and NFL-quality head coaches, position coaches, players, trainers, equipment managers
5. The A11FL has an abundance of experienced business managers and sports marketers
6. The A11FL has an abundance of cities seeking teams, especially when they learn no money is asked for from cities or tax payers
7. The A11FL seeks those with the wherewithal to enjoy the fun even if that is all that transpires
8. The A11FL has it set so that only as revenues rise do salaries rise, which avoids a common league killers in the past: salaries rising faster than revenue
9. The A11FL will especially appeal to fans: our decade of research on ticket and sponsorship marketing and sales research suggests that the A11FL fans will fill NFL-sized stadiums
   1. Because the A11 season is a "dead" season without Pro Football, fans will be ready to go out after winter
   2. These games will be affordable, giving more people a stadium experience

FINANCIAL: What to expect financially:

1. The A11FL is a single entity league at first, with franchises owned 49% by investors, 51% by league. 51% can be purchased after the third year at then market value. Abundance of highly capable top tier NFL level coaches, players, trainers, equipment managers, and business managers stand at the ready for any new league.
2. $5 million franchise purchase fee from team owners to start; A11FL will raise balance to cover first three years.
3. Estimated expenses per year: $10 million.
4. League won't start until all teams are fully funded (investors plus projected revenue streams); league will pay expenses until team breaks even (3rd year projected; our decade of research of #8 not only affirms that in our analysis but also also suggests break even could occur in first year.
5. Projected league revenue Year 1: from $98.6M (2015) to EBITA flow-through loss of $15.7M.
6. Projected league revenue Year 3: $137.2M (2017), with an EBITA flow-through profit of $20.4M.
7. Projected league revenue Year 8: $244.2M (2022), with an EBITA flow-through profit of $108.7M.
8. Local Revenue Streams: Innovative and "disruptive" entrepreneurial 40 ways in 26 categories, including game day tickets/concessions, media, sponsors, partnerships, joint venture incubators, merchandise, branding, licensing, and Fan Plans to Build Attendance, Sustain Sell Outs, Increase Revenues. We stand at the ready to consult regarding how to make this work (hence our belief that break even can be in 1st year and meet 51% value with profits of first three years).
9. Projected League Television revenue is projected $9.8 million in 2015, growing to $80 million in 2022 in year eight.
10. Projected ticket revenue is expected to generate $64.5 million in year one and grow to 127.3 million in year eight.
11. Concession and Merchandising revenue is $7.9 million in Year One, growing to $10.8 million in Year Eight.
12. Projected league revenue from sponsors is projected to be $14.8 million in 2015, growing to $20.8 million in year eight. Football fans are among the most desired demographics of advertisers.
13. Projected additional revenue is projected at $1.5 million in 2015, growing to $5.2 million in 2022.
14. Although designed for long term investment, there are options for short term investors: after three years, can sell or transfer shares. Short term exit strategies include sale of investor equity position to approved investor; take in partners of the 49% at then current value; IPO of the investors’ stock in the league, refinanced by league through traditional capital markets to repay investors and any outstanding indebtedness. NOTE: obvious reversal: after 3 years purchase the league’s 51% of each team can be bought by team owner(s) at current market value, using, as we see it, the profits of the first three years.

STATUS: This is a change in our focus and target. As noted, we started out seeking a franchise in the UFL. The UFL did not continue. We changed focus: start a league to get a team or join one of the newly proposed leagues. In the process we discovered that the A11 was so far advanced with highest chance for success that we went back to our first goal: find investors for a franchise in the A11 Football League.

ACTION: for select investors to review this proposal to decide on their level of interest. For those interested, we will introduce investors to the A11FL and assist in submitting LOI, conducting due diligence, and negotiating with A11FL to place half of $5 million in escrow until all teams are fully funded ($2.5M used now to develop and launch league). We remain available as consultants, especially in terms of building increasingly growing revenue streams for the new franchise.

DISCLAIMER: Beacon on the Hill Sports Marketing is not a part of the A11FL. We seek to (1) partner with investors for an A11FL franchise
and (2) contribute our long experience and expertise as consultants to others in their quest to acquire an professional football franchise
of the A11FL caliber.

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Page content written / posted: 02-18-14; 02-25-14