- Major League Lacrosse faces challenge from new pro league backed by high-profile investors
- Players will receive full-time salaries, health benefits and an equity stake in the organisation
- Commercial partnerships with NBC and adidas indicate potential of new summer property
Within just seven months, Paul and Mike Rabil – the co-founders of the Premier Lacrosse League (PLL) – have completely transformed the image and commercial potential of professional lacrosse in the United States.
Announced in October 2018, the start-up league has gained the backing of a number of high-profile investors, including Creative Artists Agency, the Raine Group, the Chernin Group, Blum Capital and Alibaba billionaire Joe Tsai. PLL has also secured a broadcast deal with NBC Sports Group and an apparel deal with adidas. Many other commercial partnerships are being finalised.
The PLL features 160 players on six teams competing in a tour-based model, which will travel to 12 major-market cities over 14 weeks throughout the summer. During the 10-week regular season, which starts on June 1, three games will be held over a weekend at each venue, with fan festivals and sponsorship activations to help draw in supporters.
The league is directly competing with the 18-year-old Major League Lacrosse for players, fans, commercial partners and media attention. But the PLL is bullish about its chances of success.
Thanks to a generous compensation package, the PLL has secured many players from its rival outdoor summer league. Participants will earn on average four times the salary of their counterparts in the semi-professional MLL, according to the PLL, as well as health benefits, an equity stake in the league, the opportunity for personal branding on PLL social-media platforms, plus the chance to play in superior venues and on national television.
Lacrosse is still a niche sport in the US – its strongholds are elite East Coast universities and the prep schools that feed them – but it has grown significantly in popularity in recent years. Nationwide participation at the youth, high school, college, professional and post-college level, for men and women, rose from 253,931 in 2001 to 826,983 in 2017.
According to governing body US Lacrosse, it has been the fastest-growing US team sport at the high-school level for at least the past two decades. The number of high-school players doubled from 162,021 in 2006 to 324,689 in 2017. At the college level, the men’s game has grown from 56 NCAA Division I teams in 2008 to 73 in 2019, while over 380 men’s and women’s college teams have been created over the last decade.
Meanwhile, the International Olympic Committee granted provisional recognition status to the Federation of International Lacrosse last November, which represented the first step towards inclusion at the Olympic Games.
Splitting from MLL
After leading Johns Hopkins University to national championships in 2005 and 2007, Paul Rabil spent 11 seasons as a star player in MLL, winning multiple individual and team awards while playing for the Boston Cannons and the New York Lizards.
The 33-year-old Maryland native was the first lacrosse player to earn more than $1m (€897,000) in endorsements. But he was extremely frustrated with the pay and working conditions overall in MLL, in which the average salary was $8,000-$9,000 last year, forcing almost all players to take second jobs.
“When I was playing with my peers in Major League Lacrosse, we just felt like we weren’t making the right strategic decisions to help our sport grow,” Rabil tells SportBusiness. “Examples of that would be: the venues we were playing at, the distribution we didn’t have from a network capacity, the timing of the season…So over the past couple of years, [with] my brother Mike, we decided to look critically at the opportunity to build a professional league that can take the sport to the next level.”
The Rabils initially explored acquiring MLL and converting it into a tour-based model but decided in would be easier and quicker to build a new league from scratch. “In the case of most mergers and acquisitions, nine out of 10 at least in Silicon Valley fall through because of differences in valuation, differences of opinion of which business model might work,” Rabil adds. “You have owners and operators who think they are doing a great job and don’t need support and you have potential acquirers who are thinking the opposite.
“M&A is difficult and for an amalgam of reasons it didn’t work but for Mike and I the most important aspect of this project was timing. We felt that we didn’t have the luxury to spend two or three years figuring out the economics of purchasing and MLL and we felt that the timing right now has never been as powerful as it has been to start a league, which is why we took [that route].”
Rabil – who will also play in the PLL – concedes there are some risks in creating a league that will rival an established sports property but believes they are worth taking.
“Certainly there is a competitive element when you are launching a new league and there is an existing league but we view the marketplace as far more expansive than what has been tapped into,” he says. “We believe that with the right model we can tap into that fanbase and we also feel with the right strategy we can build support and fandom from net-new sports fans.
“We think less about competition and more about our product, how we can improve it, and how we can get lacrosse and our players in front our current fans and new fans.”
MLL has responded to the PLL challenge by eliminating three of its nine teams this year – the Ohio Machine, the Florida Launch and the Charlotte Hounds – and reacquiring all its media rights in order to explore broadcast options that could offer greater reach. There will also be a 51-per-cent increase in the salary cap, expanded schedules and rosters, along with a comprehensive, league-wide rebrand.
Is there room in the US for both the PLL and MLL? “I guess we’ll find out,” says Rabil. “In the short term, it’s been massively beneficial [to the sport] that we’ve come in and accomplish what we’ve done since the six short months of announcing. But I think in the long term for the health of any industry you need one professional league that is top in at least that market.”
Challenge of starting from scratch
After deciding to go it alone, the Rabils put together a business plan to take to potential investors, a process which began almost two years ago and was initially funded out of pocket.
“Before Mike and I were able to ever secure capital we had to build a runway for this business,” says Rabil. “We had to create our business model, we had to back it with case comparisons with other sports, we had to bring on our first set of employees which we funded out of pocket, we had to build contracts for players…so we have this proof of concept by which you can take to investors and raise money off of.”
The Rabils targeted venture capital firms that could offer expertise and connections in the sports and media industries as well as just finance. Terms of two rounds of financing thus far have not been disclosed.
Rabil says: “The value of raising venture capital versus private equity or friends and family or even taking out debt from a bank is that venture capital knows you are in a 10-year process of building out something that has ideally a large multiple on the return. These are type of strategic investors that understand and have the patience to build enterprise value across all the revenue streams that we’ve sculpted.”
The investment firms clearly liked what they saw. “We have looked at lacrosse and investing in lacrosse for many years because of the trends in the sport,” Colin Neville, the managing director of Raine Group, tells us. “We have seen in the US very significant growth at sport at the high-school level, at the college level and historically the outside game had not been presented in the way that it should. We like the general trends, we like investing in a new sports league and ultimately we believe that Paul and Mark Rabil were the guys to get it done.”
The initial financial investment led to the NBC broadcast deal, which includes 16 games on NBCSN, three on the main NBC network and 20 on subscription service NBC Sports Gold. “NBC supports us from a production, talent, music, graphics standpoint. We share in revenue for them and we feel like the television inventory they’ve given us is unlike any other non-core sports league,” says Rabil.
The NBC deal, in turn, led to the partnership with adidas, which became the official athletic footwear and apparel brand for the league in a multi-year deal. “Every partnership that we build from here on out provides more validation and entices more people to join us,” says Rabil. “We’re really close with a beverage company, a financial services company, hospitality, transportation, alcohol…there are a lot of companies that are at the goal line with us but getting our venture capital partners was important to getting our NBC partner to feel like, ‘this is validated concept that’s in it for the long run’, so every partnership dating back to securing the partners secures the next.”
The inaugural PLL College Draft on NBCSN, NBCSports.com and the NBC Sports app had a cumulative average of 168,500 viewers, according to Nielsen.
MLS stadiums targeted
In choosing the cities to play in, the PLL began with a long list of 300, which was then boiled down to 30. “We looked at trends such as participation numbers in market, available venues in market, household viewership numbers when lacrosse is on television in specific markets, and then we also looked at data census on household income, likelihood of sports fans and willingness to go out to an event,” says Rabil.
From there the Rabils began conversations with various stadium operators to determine which venues would be best suited for the league. It is no coincidence that the PLL is playing in nine Major League Soccer stadiums: Avaya Stadium (San Jose, California), Audi Field (Washington, DC), Banc of California Stadium (Los Angeles, California), Dick’s Sporting Good Park (Commerce City, Colorado), Gillette Stadium (Foxborough Massechusetts), Mapfre Stadium (Columbus, Ohio), Red Bull Arena (Harrison, New Jersey), SeatGeek Stadium (Bridgeview, Illinois), with the championship game at Talen Energy Stadium (Chester, Pennsylvania).
The other facilities are Homewood Field (Baltimore, Maryland), Georgia State Stadium (Atlanta, Georgia), Tom & Mary Casey Stadium (Albany, New York) and Tim Hortons Field (Hamilton, Canada), which is the only game outside of the US.
“MLS, most specifically over the past decade, has ownership that has invested hundreds of millions of dollars into these venues that sit 20,000-25,000 people. So they are world-class venues that are a good fit for the attendance of a non-core sport,” says Rabil.
“We have multi-year deals with many of the venues and in subsequent years we’ll look at where we saw some success, where we could potentially go to see more success and have that ability to be agile.”
The PLL will share in revenue at the venues based on metrics such as attendance numbers. Ticket sales are rather complex, as each venue has its own unique relationship with a ticket provider, which the PLL must navigate. “We have an entire ticketing team working on that process,” Rabil says.
Alongside the games, there will be events inside and outside stadiums – such as live music, games, player meet-and greets – to encourage fans to come and allow corporate partners to activate.
The touring model was set up in large part because it made more financial sense, especially in regard to the rental of venues. “Where the current team sports model can be problematic for non-core sports is that you don’t own venues so the MLL previously was playing at college stadiums and sometimes high school stadiums, which isn’t optimal for the player or fan experience when you are talking about pro sports,” says Rabil.
“Also as a result of being like a low-priority tenant on a lease at a venue you can’t optimise your schedule fully for available programming windows with a distribution network. By going tour-based…we are picking the best venues and we also have the agility to create our game times around network windows that are available.”
Due to the touring model, the PLL did not want to create team names that were associated with specific cities and make them localised. As such, the league’s first six teams have been called the Archers, Atlas, Chaos, Chrome, Redwoods and Whipsnakes. After the first season, it will be decided whether to add more teams.
The most recent start-up professional league in the US, the Alliance of American Football, collapsed after just eight weeks in its inaugural season. Rabil believes there is much to take from the AAF’s experience, both good and bad.
“We learned that a start-up league can generate a lot of exposure and capture a ton of attention and can be really exciting,” Rabil said. “We also learned and know that sports are expensive, and you have to be stewards of your capital as co-founders and make sure that you have a very tight plan in understanding partnerships. This is why we are spending so much time with NBC and the corporate partners that we’re bringing on.”