Lucrative Media Rights Fuel Speculation of a CFL/XFL Merger
The Canadian Football League is set to return to action this summer. Operating completely north of the border, it is made up of nine teams covering major cities such as Toronto, Montreal and Ottawa.
The XFL ceased operations in 2020 after a very brief five-week stint. Behind new investors led by Dwyane “The Rock” Johnson, the league is hoping to return to action in 2022. The fact that Johnson played for the Calgary Stampeders explains his ties to that professional football league.
Interestingly enough, his stint in the CFL only lasted two months. That is when The Rock decided to focus his energy on professional wrestling.
The CFL has gone on record as stating that the league is actively seeking ways to grow and possibly expand. It also stated that it is exploring its options with the XFL. This has driven the speculation of a merger between the two. Although, nothing official has been announced by either party.
Johnson has also gone on record as expressing excitement over a possible partnership with the CFL. Further speculation among industry insiders suggest that a merger of the two leagues could be a matter of survival as opposed to growth and expansion.
In business, everything comes down to money. Daniel Cohen is the senior vice-president of global media rights consulting for Octagon. His company has established itself as an industry leader in sports and entertainment marketing.
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Cohen recently stated that a merger between the CFL and XFL could be worth as much as $100 million (US) annually in media rights. A big part of his job is consulting with sports leagues as well as individual teams. This entails working with media companies, venture capitalists, and financial institutions.
He believes that scaling up the size of the combined pro football league is the key to future success. This would raise its overall appeal with fans while also raising the level of talent on the field.
Initial thoughts would keep the CFL teams intact north of the border while expanding into the US with franchises in existing XFL markets. A distinct North American pro football league could offer mass appeal to media networks.
The CFL currently has a $50 million (CAD) media contract with TSN in that country. The XFL had broadcast agreements in place with ESPN, FOX, and ABC.
When you consolidate, you scale, and when you scale you drive greater demand for your rights, be it media rights or sponsorship. I think one of the interesting things in a combined XFL/CFL merge is now, if you’re a brand or media partner and you’ve got an interest in accessing Canada, or you’re a Canadian brand and you have interest in accessing the US, now it opens up two countries.
This would also set the new league apart from the NFL which only has franchises in the US market. This could also be the only way each entity survives in light of the NFL’s overall dominance.
The CFL and XFL have already agreed to explore different ways to help one another moving forward. Joining forces appears to be the most logical plan.