On the surface, it’s hard to understand how the Alliance of American Football will turn a profit. The TV deals are far from lucrative, the attendance has been decent but far from spectacular (especially in Arizona), and the players are getting more than $80,000 each for the entire season.
With 52 players on each roster, that’s a league-wide payroll of more than $33 million for the 10-week season. And that’s without all of the other costs, salaries, and expenses that go into running an eight-team football league.
But the AAF has placed a larger bet on spring football, beyond the balance sheet driven solely by money in and money out on a week-by-week basis. The AAF hopes to perfect wearable technology that then will be ready to sell to other sports leagues, as legalized gambling becomes more prevalent.
“The real place where we make revenue is in the back-end technology and how it can be sold to other partners,” AAF co-founder Charlie Ebersol recently told USA Today. “A lot of what this business is about is being an iceberg. You see about 10 percent of what the company is above water publicly.”
Apparently gambling on last year’s Supreme Court case regarding state-by-state legalization of gambling going their way, the AAF accumulated significant venture capital funding, including an investment from MGM Resorts International. Ebersol told USA Today that the league plans to spend between $500 million and $750 million over the next five years. The goal isn’t simply to develop a successful developmental league but to develop the ability to lay the foundation for in-game, real-time betting -- from anywhere in the country.
“It’s not fully functional, but it’s almost there,” MGM president of interactive gaming Scott Butera told USA Today. “What it will do, which is very important to us from a sports betting standpoint, is it will allow almost immediate transmission of data and what’s going on in an event to your mobile device, which will allow us to have play-by-play gambling, which is non-existent today.”
Flickers of this technology can be seen in the AAF’s app, which has a non-gambling game that allows users to predict the next play -- and to see the players moving on the field in the form of egg-shaped blobs that move in coordination with actual player movement on the field.
This become the potential cure for the issue of broadcast latency, which necessarily builds delay into the events as they unfold and as they emerge from your in-home TV. By using an app that is synchronized in real time with the players on the field, bets can be placed on the next play up until the snap, with the pre-snap formation providing the last bit of evidence that will be processed before making a guess as to what will happen on the next play. Also, data gleaned from each player’s movements can be used to better predict future movement, enhancing the house’s ability to properly set odds aimed at enticing wagers and, ultimately, making a lot of money.
With 40 regular-season games per year, the AAF becomes the laboratory for implementing and perfecting this technology, which would then be used for NFL and college football games, eventually facilitating the legal wagering of billions of dollars and, in theory, more than justifying whatever short-term losses the AAF may experience.