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THE PREMIER LACROSSE LEAGUE: IS THE HYPE REAL




Posted on 17th Nov 2019 07:44:13


This is not your typical professional sports league. The Premier Lacrosse League (PLL) is a new professional lacrosse league that begins its inaugural season on June 1. The league founders are promising things that have never been seen in the sport of lacrosse, or team sports in general, but is the hype real or will the PLL be another failed attempt at creating the next major North American sport?

 

For those who haven't been following lacrosse over the last months, let me briefly catch you up to speed. Lacrosse superstar, Paul Rabil, and his brother, Mike Rabil, a serial investor, co-founded the PLL. The league is made up of 6 teams of the best players in the world including 86 college all-Americans, 10 Tewaaraton winners, and 25 U.S. National Team players. The league will follow a 14-week tour-based schedule that makes stops in 13 major US cities. This includes 10 regular season games, an all-star weekend, and 3 weeks of playoffs, and it all kicks off on Saturday June 1st.

 

A Player's League

The Rabil brothers want everyone to understand that this is a player's league. The mission is to create "full-time" professional lacrosse players. Before the PLL, there was (and still is) Major League Lacrosse (MLL) that started in 2001. The average starting salary in the MLL was at about $7,000 to $9,000 per year (1). The teams would practice maybe once per week and play a game on the weekend. Meanwhile, the players either maintained their full-time 'regular' jobs or found other sources of income through lacrosse such as sponsorships, coaching, camps, and clinics. The PLL sets out to change this. The minimum salary for players is set at $25,000. The players also receive medical benefits and equity in the league, unprecedented for professional team sports.

 

It's clear the financial compensation for the players will be leaps and bounds above that provided by the MLL, but is it enough? This will depend on each player's individual circumstances. Are you a bachelor a few years out of college? Are you married and trying to start a family? According to one source, if your household income is less than $39,500 a year in the United States, then you are in the lower class (2). What if we compare the salary to another profession, teachers. The starting teacher salary in the United States is at over $38,000, about $10,000 higher than the PLL, and teachers are notorious for being portrayed as underpaid (3).

 

It is true that the players also receive equity in the league, but let's consider that, too. Starting a league takes a lot of money. Even with good attendance and revenues, it's hard to believe the PLL as an entity will generate a profit this year, or possibly for a number of years. What this means for the players is the equity they receive will likely take a number of years before generating any financial returns.

 

The fact is most players will still need other sources of income besides their PLL salaries, which means probably still keeping their 'regular' jobs or earning income through sponsorships, coaching, camps, etc. This begs the question are these players in a position to focus solely on lacrosse for 14+ weeks during the summer? Not many jobs allow you to take a 14-week hiatus in the middle of the year. The idea of “full-time” professional lacrosse players does not seem to be a fully realized goal at this point, but instead, a goal the PLL is striving toward.

 

The good thing is the PLL seems to be aware of this and is taking it to the next level in terms of helping players tell their stories, promote themselves, and grow their personal brand. In fact, there is a strong emphasis from the PLL to promote individual players more than any one team or the league in general. This means an emphasis on strategies for high-quality player content and storytelling. This also mean things like open-sourcing player highlights and a full-time league studio to create appealing content.

 

The Summer Tour

In another unprecedented move for a team sports league, the PLL will utilize a touring-style. Instead of having home teams with home cities and stadiums, the entire league will head to a different city every weekend. Each weekend will be a festival-style experience with lots to offer for the fans. This league format will present a number of challenges and opportunities.

 

A major challenge is the elimination of having a home team. This will hurt the ability of the league to acquire a certain type of fans. Traditionally, teams have a large proportion of fans who may not be diehard fans of the sport, but root for the hometown team or the team “from my city.” There are also those fans who live in the same region as a team and develop a sense of loyalty and connection to a team. Teams without a home won't be able to build these connections and acquire this type of fans.

 

One also must consider the season ticket holders. These are the fans that are usually big fans of both the sport and the team. They purchase season tickets for the opportunity to watch the sport live multiple times throughout the season. With the touring format, this fan will be able to watch live lacrosse maybe once or twice when the league stops into town.

 

Another aspect impacted by this will be league revenues. With a traditional league, home team success and competitiveness drives local/regional advertising. The PLL will have to find ways to compensate for the lack of loyalty and city connections in terms of outreach, competition, and revenues.  

 

It should be noted that there are some positives to the touring format in terms of exposure and reaching a broad range of markets. The PLL can take advantage of markets where lacrosse is popular and participation is high. It can also target specific up and coming markets for further growth of the game and exposure to professional lacrosse.

 

Logistically speaking, the entire league, players, coaches, and other personnel have to travel to a new location each weekend. This means the league is paying for travel and hotels. This raises the question of how will the teams practice and train throughout the summer. Will there be practices and meetings during the week, held in facilities located in whatever city is the next stop? Will players be traveling from one city to the next as a team, or will players return home to families and/or other work during the week?

 

A Single-Entity League

As noted in many media outlets, the PLL is more like a silicon valley start-up than a traditional sports league. Instead of team or franchise owners you have investors who have equity in the league as a whole. Major investors in the league include The Raine Group, Creative Artists Agency (CAA), The Chernin Group, Blum Capital, and billionaire Joseph Tsai (J Tsai Sports).

 

A single-entity league means the league owns all the teams and manages all aspects of operations. They also negotiate all broadcasting deals, enforce intellectual-property rights, and assign players to clubs. This means league administrators determine how to evenly distribute talent throughout the league.

 

Unfortunately, this setup may be short-term thinking and actually limit players financial opportunities. In a league with team owners and franchises, owners have a strong incentive to have a competitive team. A competitive team means more outreach and consumers, which means more revenue through tickets, media rights, and advertising. To have the best team, you need the best players. This is where competition arises as owners attempt to get the best players by offering more money and/or better contract terms than other teams.

 

In a single-entity league, there is only one buyer, the league. Because there is no competition for players services, there is nothing to drive players salaries higher to a competitive market value. This model may be necessary, especially early on as the PLL deals with significant expenses of starting a whole new league. There will be unknown and possibly limited revenues early on as they build exposure and consumers. However, if the PLL is to succeed long-term and players are going to earn what they are truly worth, adjustments to the league model may be necessary.

 

Major League Soccer (MLS) is the most notable single-entity league, but has adapted over the years to give individual teams more power such as via team “investor-operators.” There have been varying viewpoints on the success of this model for MLS. It may have limited the rate of growth of the league, but also likely allowed the league to survive, especially in its early years, by controlling team and league expenses.

 

The Television Agreement

An exciting aspect of the upcoming season is the broadcasting agreement the PLL reached with NBC Sports Group. NBC will be broadcasting 3 games on NBC, 16 games on NBCSN, and the other 20 games will be available through the NBC Sports Gold Package, an online streaming platform. 

 

From NBC's perspective, this deal is a no brainer. The PLL runs through the summer with the championship game on September 21. The dog days of summer are notorious for only having one major sport, baseball, in action during this time. Furthermore, NBC offers extensive coverage of the olympic games and this is a non-olympic year. A growing sport like lacrosse showcased through an exciting new league seems like an easy way for NBC to add to its summer schedule. The growth and increased exposure from the broadcasts may also lead to increased streaming subscriptions and revenue for NBC.

 

The PLL obviously benefits from this through increased outreach and exposure, which hopefully leads to increased consumers and followers. The more intriguing question is what are the details of the agreement between the PLL and NBC. Is the league or NBC paying for production costs? Is NBC paying for broadcasting rights or are they utilizing a revenue sharing agreement like they have in the past with the MLS. 

 

In the early years of the MLS, NBC had an agreement where they did not pay for broadcasting rights. Instead, they had a revenue sharing agreement in which the first couple million dollars in revenue went to NBC to cover production costs and then NBC and the MLS split a percentage of the revenues after that. In essence, NBC had nothing to lose with this contract because they knew that initial revenues would go towards covering their costs. It would be interesting to know if there are similar characteristics in the agreement NBC Sports Group has made with the PLL.

 

Cautiously Optimistic 

The PLL has a lot going for it and is certainly creating a lot of buzz. It's led by the biggest personality and most popular lacrosse player in the world. It's a professional league for a sport that has seen significant growth in participation over the last decade. It's set in a great time of year by avoiding overlap with NCAA lacrosse, the professional indoor National Lacrosse League, and most major North American sports (football, hockey, basketball). It has an exclusive broadcasting deal with NBC. Its utilizing innovative strategies of promoting the league, the players, and the teams, and it's backed by a handful of big name investors.

 

The million dollar question is will all of this translate to fans who will watch on TV, purchase merchandise, and come out to the games. Lacrosse viewership has never been strong, especially compared to the major professional sports of football, basketball, hockey, and baseball. The PLL hopes to overcome these challenges and build exposure through its touring-style league and festival-like atmosphere, something that has had success for other sports such as the X games.

 

Even with success, the league will surely have to endure the growing pains that any new league must deal with. It's likely the PLL will have to endure a number of years without generating profits due to high start-up costs and the general costs of running and promoting a professional sports league. From surface level, it appears they have the investors with the deep pockets to make it work. These investors will need to have extreme patience matched with a love and belief in the game of lacrosse in order to allow the PLL to mature.

 

Current and former lacrosse players, and lacrosse fans alike, are excited and anticipating what the PLL's inaugural season has in store. We all are hoping the hype is real.

 

 

Author: Luke Perdersen

References:

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