- Wearable devices will enable biometric data to be used in-game and in real time for wagering
- App has been created that will allow gamblers to simultaneously watch a game and bet on it
- Bonus structure enables players to earn more based on how much fans interact with them
The Alliance of American Football, which kicks off in February 2019, is embracing sports betting from the outset in an attempt to become the first professional gridiron league to successfully fill the void in the NFL off-season.
Founded by Charlie Ebersol (above) – the TV producer son of veteran sports media executive Dick Ebersol – and former Buffalo Bills general manager Bill Polian (below), the start-up league is following in the footsteps of the USFL, which ran for three seasons in the early 1980s, and the XFL, which lasted just one season in 2001 and is due to return in 2020.
Despite a promising start, the USFL went bust after deciding to take on the NFL by moving to an autumn season, while Vince McMahon’s XFL was considered too gimmicky and violent, and ratings quickly tumbled.
To help avoid the pitfalls of its ill-fated predecessors, the Alliance is seeking to capitalise on the new sports betting landscape in the United States after the Supreme Court repealed a federal ban in May.
Following a wide-ranging deal with MGM Resorts International – which will be the Official Sports Betting Sponsor and exclusive Gambling Partner – the Alliance has established a series of groundbreaking sports betting initiatives to try to enhance the fan experience and provide an opportunity for gamblers to wager on the sport in the NFL off-season.
The league notably begins its inaugural campaign on Feb 9, a week after the next Super Bowl.
As part of the MGM deal, Alliance players will put on wearables – electronic sensory devices that track and analyse athlete biometrics – that will collect second-generation data that will be used to determine odds for in-game betting in real time.
This data will, in turn, be fed into an app created by the Alliance’s in-house technology team that will enable gamblers – in states where mobile sports betting is legal (currently Nevada and New Jersey) – to watch a game while betting on it on the same screen. The free-to-use app, which will be housed on MGM’s gaming license, also includes an interactive fantasy game that provides a similar function. Directly linked to this, Alliance players will earn bonuses based in part on how much fans interact with them via the app’s fantasy and gambling properties.
There is evidence to suggest a gap exists in the market for the Alliance to exploit. American Football remains the most popular sport to bet on in the States: an all-time high $1.7bn (€1.5bn) was wagered on the game at professional and collegiate levels in Nevada in 2017, compared to $1.4bn on basketball and $1.1bn on baseball.
According to Alliance research, 78-80 million Americans stop watching sport at weekends in the six months between the Super Bowl and the start of the following NFL season, while about 20 million people stop playing all forms of fantasy games in the same time frame.
“Ultimately, the ability for fans to interact with the game in real time is something that has been the golden goose that nobody has been able to catch. From a technological standpoint, we really feel that we’ve tapped into something,” Ebersol, the Alliance co-founder and chief executive, tells SportBusiness.
“Football is a great opportunity to engage people in new technology because they are hungry for the underlying sport and our technology provides a new way of looking at it. Someone at a sportsbook in Las Vegas or wherever there is legal sports betting will have access to a type of betting that has never happened before.”
Innovative bonus system for players
The Alliance will start its inaugural season with eight teams, which are based in Atlanta, Birmingham, Memphis, Orlando, Phoenix, San Antonio, San Diego and Salt Lake City. A 10-game regular season will be followed by a four-team play-off and the championship game.
Fifty-man team rosters will be filled with players who predominantly do not make NFL and Canadian Football League squads. They will be allocated to teams based primarily on where they played at college, if there is an Alliance team nearby, or their most recent professional team in order to appeal to the local fanbase.
To help attract talent, an ‘NFL Out’ clause has been included to allow Alliance players leave for the NFL at the end of a regular season regardless of the time remaining on their deals. This illustrates that the Alliance is looking to work alongside the NFL rather than compete with it, unlike its forebears.
Players will all get three-year contracts worth $250,000 – rising incrementally from $70,000 in the first year, to $80,000 and then $100,000 – along with health insurance and an education stipend. Players will receive travel stipends, per diems and all meals and lodging will be covered as well.
Players are also given separate bonus contracts that will reward them in a number of ways. According to Pro Football Weekly, this includes: winning games; social media engagement with fans; participation in league marketing; sales of the player’s merchandise and sales of the player’s team merchandise.
As MGM will share its betting data with the Alliance, the bonus structure also includes player interaction on fantasy and betting platforms. According to Ebersol, the more someone bets on a player, the more they stand to earn. “In our system, there’s really a limitless cap on what a player can make,” he told ESPN. “Money from the amount of bets placed on them is one of the ways.”
Without going into any specifics about how it will work, Ebersol says this bonus structure has been designed so players will not put their individual financial interests before team success to create potential integrity issues. ”One of the things you want to avoid is rewarding individual play in a team sport. We’ve weighted the system to reward the player not just for their individual stats but also the success of their team,” he tells us.
“It’s meant to balance it and not create a situation where a player has to choose between their own individual success and the success of their team for financial gain. By aligning the players’ interest financially with the success of the game and league itself you are disincentivising behaviour that would undercut it.”
“Integrity is an issue for all leagues, including the Alliance. But I don’t think that there’s a unique risk with their approach to compensation. The reality is that players in many sports may have individual incentives that clash with team goals,” Chris Grove, the managing director of sports and emerging verticals at Eilers & Krejcik Gaming, tells us. “I’m not sure the Alliance is necessarily opening a new door here. Of course, we still don’t really know what the system looks like or how it will be applied in practice.”
Taking wearables to new level
As a mandatory part of their contracts, Alliance players must put on wearable devices, which will track their movement during games, in minute detail. The data and statistics garnered will be utilised for in-game betting purposes, such as a quarterback’s chance of making an interception based on the speed in which he is throwing the ball.
Ebersol is not sharing what form the wearable device takes or what data it will take from the players. But he says: “The wearable affords us real-time access to the data faster than any other wearable that’s on the market. Our technical business is based on the fact that we’ve built proprietary hardware and software that affords us the ability to do something that everybody else hasn’t been able to do.”
Wearable technology partnerships are not uncommon in US major leagues but the Alliance is taking their use to a new level by using the data in-game and in real time. To contrast, NBA players, per their 2017 Collective Bargaining Agreement, are allowed to wear selected approved wearable devices in practice but not in games. Major League Baseball approved the use of Whoop wristbands – which continuously monitor heart rates and fatigue levels – during games last year, but teams cannot force players to wear them.
In 2014, the NFL partnered with Zebra Technologies to put two sensors in players’ shoulder pads, which track location, speed and distance travelled, however league restrictions on their access meant very few teams utilised the data. It was not until April 2018 that the data was disseminated league-wide and now it is on a weekly basis only. The NFL Players Association also has a deal with Whoop, but players are not allowed to wear the wristbands in games and they own the rights to the data, which restricts team and league access to the information.
The reason the Alliance has been able to expand the use of wearables is because it is organised as a single-entity structure, similar to Major League Soccer. Teams are owned by the league, rather than multiple individuals, and players sign contracts with the Alliance, which then assigns them to a team.
There is also no players’ union to negotiate with, unlike in the major leagues. “The decisions we make, we’re not doing it through 30-something owners. We’re the only league where end-to-end we control the entire process,” Ebersol says.
The Alliance’s use of wearables could set a precedent for other leagues to follow. “There’s probably no way for professional sports leagues to avoid the matter for any significant amount of time. Once the data exists, it will influence betting,” Grove adds. “And once player data is influencing betting, the leagues and other stakeholders ignore that interplay at their peril.”
Sports betting legislation to play role in expansion
None of the initial eight teams are based in states where sports betting legislation has been approved yet. Ebersol says expansion decisions will be primarily based on the commercial and fan interest in local markets in having Alliance teams. But he adds that sports betting legislation – and more specifically mobile wagering laws – will play a role too, in order to maximise the use of the league’s app.
“Yes, we’re looking at the states where betting is on the path to being legal or is currently legal but what we’re also looking at is what the market can support and what the appetite in those markets to support it is, and whether or not the state is going to adopt laws that will support our type of technology,” Ebersol says. “Right now, without federal legislation every state is doing their own thing and as they are doing their own thing it is incumbent upon us to make sure if we’re going into a state where [sports betting] is legal that we’re complying with whatever the laws are.
“As we think about expansion in the next year, it will be driven by our appetite for the success in the local market as well as gambling. But it’s more about the market because ultimately the football has to succeed on local interest, in terms of selling tickets.”
The Alliance is, notably, holding its first two championship games in Las Vegas, at the Sam Boyd Stadium, to ensure there will be in-game betting in the arena. “Our championship game will be the first time a major sport will have in-stadium legal betting during the game and that was by design,” says Ebersol.
“Ultimately we believe gambling will get there nationally, but right now Las Vegas is the only place where you can bet in an arena and that’s where we’ve started.”
Technology investment could hold key to financial success
The Alliance’s business model remains largely private. Ebersol has secured financial backing for parent company Legendary Field Exhibitions LLC – which runs the Alliance and its technology arm, nominally known as Alliance Digital – but he not disclosing how much he has raised.
Initial investors include Peter Thiel’s Founders Fund, Slow Ventures, Peter Chernin’s Chernin Group, Adrian Fenty and Charles King’s M Ventures, Keith Rabois, and former NFL all-pro Jared Allen.
According to Crunchbase, a platform for finding business information about private and public companies, the Alliance raised $17m from M Ventures over two funding rounds this year.
“Getting a lot of money was obviously important, but getting the right money was even more important,” Ebersol said in March. “All of these previous attempts have been based on the idea of a one- or two-year business model. I went out and said, ‘Look, I need money for seven-to-10 years.’ They were the type of people that jumped on board.”
A broadcast deal has been secured with CBS, which will air the league’s inaugural game and championship match on its main network and one regular-season game a week on CBS Sports Network. In March, Ebersol declined to say whether the league would receive a media-rights fee from CBS.
In multi-year partnerships, Starter will be the Official Supplier of on-field apparel and game-day uniform for all eight Alliance teams, while New Era Cap has signed on to become the Official Sideline Headwear Partner.
As well as being the Alliance’s Official Gaming Partner, in a three-year multi-million dollar deal, MGM has invested “significant” funds into Alliance Digital. “They invested in the technology side of the business and so they are really focused on what we are building and its applicability in our business and beyond,” Ebersol tells us. “MGM certainly love our football and there is something exciting there. But the ability to break meaningful new ground with the technology was something worth its weight to them for a deal.”
Ebersol is hoping the Alliance technology will be utilised by other sports leagues and bookmakers for their own in-game betting apps. ”The future of our technology is built that it can go many, many places and as we think about the applicability of it that’s something that we’re certainly focused on,” he says.
“It’s why we didn’t just sponsor it, we invested in it,” Scott Butera, MGM’s president of interactive gaming, told ESPN.
The biggest unknown is how the Alliance will be able to co-exist with the rebooted XFL. McMahon recently sold $100m worth of WWE shares to fund the XFL and is reportedly expected to invest $500m in its first three seasons. Ebersol believes his calculated gamble on sports-betting integration will pay off.