The Fox Sports-owned United States Football League has hired investment bank Allen & Co. to find minority investors to help fund the league’s expansion, three sources with knowledge of the situation said.
This Sunday, the Philadelphia Stars and the Birmingham Stallions will meet in the USFL Championship game wrapping up the league’s inaugural season.
Fox is turning to Allen & Co., which just advised the Denver Broncos on its record $4.65 billion sale to Walmart heir Rob Walton. Fox’s plan is to raise between $150 million and $200 million, two sources said.
Allen & Co. knows parties who have shown recent investor interest in football, and is looking for investors who can help Fox run the league, sources said.
“Fox has a longstanding relationship with Allen & Co., and they have advised us on setting up the financial structure of the league which sets the USFL up for future growth as we head into the 2023 season and beyond,” a Fox spokesman said, declining to comment on the current assignment.
The USFL played all their games this season in Birmingham, Ala. Next year the league plans to have two to four cities host the games played by its eight teams.
“This is a costly venture to get off the ground,” a source said.
Fox plans to keep the league going next year even if it cannot find the right investor, sources said, and is controlling costs by using some of Fox’s infrastructure, including its marketing team.
USFL games have been sparsely attended, but ratings this first season on Fox, NBC and the USA networks were higher than the more established Major League Soccer or even US broadcasts of the English Premier League, the source said.
With MLS franchises now worth about $400 million each, the math goes that the USFL with its eight teams could be worth at least $3.2 billion a few years down the road.
Sportico reported June 22 that the 10-week USFL broadcasts averaged 695,000 viewers a game which was much better than the 295,000 who watched MLS on the ESPN channels, according to Nielsen data. NBC’s broadcasts of Premier League games averaged 507,000 viewers.
“The valuation is in the eye of the beholder,” a source familiar with the process said. “There is no direct comp.”
Fox bought the intellectual property of the first now defunct USFL that played from 1983 to 1985 in an attempt to capture football fans who had little to watch in the spring.
The intent, unlike the original USFL, is to not compete against the NFL, the USFL has said.