Common sense dictated that Bill Hambrecht get out, cut his losses at $70 million and accept the fact he got involved in a failed business venture.
But his heart was telling him, "One more year."
Hambrecht, an investment banker from San Francisco, who helped found the United Football League and owns the Las Vegas Locomotives, is following his heart. He will sink up to another $7 million into the UFL for the 2011 season, with the hope that sooner than later something good comes of his attempt to bring an alternative to the high-priced NFL.
"If we can cut our losses this year, get a media deal and continue to cut losses the year after, this could work," Hambrecht said.
The league limps into its third season having sustained more than $100 million in losses over the first two years and still has no viable TV deal to bring in revenue and few major national corporate sponsorships.
"It has cost us more than I thought," Hambrecht said.
Hambrecht co-founded the league in 2007 with an initial buy-in of $2 million and has put in substantially more since. He said the UFL needs to quit hemorrhaging red ink or there won’t be a 2012 season.
"We can’t continue on the same path," he said. "It’s not sustainable."
The UFL would have benefited had the NFL lockout spilled over into the fall, thus creating a void for football fans and for television that the fledgling league could fill. But when the lockout ended last month with a new collective bargaining agreement, there was no place for the UFL to televise its product.
"We were close to a TV deal, but the NFL lockout froze everything," Hambrecht said. "And when the lockout ended, it was too late for us to get a deal."
Facing a financial crisis, the league considered suspending operations. Instead, the owners voted to play in 2011. The UFL pushed back the start of its season from mid-August to Sept. 16. It folded the Hartford Colonials and reduced the schedule from eight games to six. It gave control of its financial operations to its four individual franchises, with the mandate to keep spending in check.
Hambrecht said it was the only way he was staying in.
"I was through supporting the other teams in the league," he said of his $70 million loss. "I’m willing to risk my money in Las Vegas. But I told the other owners I was not willing to support their losses anymore."
The Locos open training camp Friday at the Sam Boyd Stadium practice fields, and Hambrecht said he expects to lose a minimum of $5 million and as much as $7 million with the team this year, even though it has sold more season tickets than in its first two years combined and despite a dramatic increase in corporate sponsorships.
According to Ruben Herrera, the Locos’ vice president for business operations, the team has more than 2,000 season subscribers and has cash and tradeout deals with local sponsors worth more than $200,000.
Locos president and coach Jim Fassel said he doesn’t know many owners who would continue to stick their neck out the way Hambrecht has with the UFL.
"He’s near the top of my list in every category," Fassel said. "He’s been so supportive of us from the very beginning. He has a passion for football. He’s not used to failure, and he’s doing everything he can to make this thing work."
Hambrecht admitted the UFL has been a frustrating venture for him, even though his team has won the first two league titles.
"I’m a fan," he said. "But I’m also a businessman. I wouldn’t do this unless I thought we had a chance to be successful at some point."
Hambrecht said that point needs to be reached in the near future. To that end, the UFL has had several discussions with the NFL about becoming partners. But Hambrecht wasn’t sure if the outcome will be favorable to his struggling league.
"We’ll have to see," he said of the possibility of an NFL-UFL partnership. "I think we have a pretty good product on the field to offer them. We’ve had players and coaches go from the UFL to the NFL, and the (UFL) has done a good job of that. But I think there are a lot of owners in the NFL who don’t see a need or want to be involved with the UFL.
"I think we’ve proven that on the field, what we’ve done can work. But this business model has not worked, and that needs to change if we’re to continue."
Contact reporter Steve Carp at firstname.lastname@example.org or 702-387-2913. Follow him on Twitter: @stevecarprj.