What Happened To The USFL?

The USFL came to prominence in the early 1980’s, hoping to challenge the growing popularity of the NFL. So what exactly led to the USFL being shut down after just three seasons? In today’s video we’ll take a look back at how a series of organizational mismanagements, and a misguided lawsuit against the NFL lead to the USFL’s demise.

The USFL Is Born

Over the years there have been a number of competitor leagues that have sprung up to compete against the NFL. Some leagues like the AFL and AAFC either merged or were absorbed by the NFL, but most fell by the wayside after struggling to stay alive financially. One such league was the 1945 version of the United States Football League, which had former Chicago Bears legend Red Grange as the league’s president. But this first iteration of the USFL was short-lived, and folded before ever playing their first game. Flashing forward a bit to the early 1960’s, a New Orleans based businessman named David Dixon had an idea of starting a football league that could be played during the spring and the summer before the NFL and college football seasons got underway. Dixon was no stranger to football, having had success in helping bring the NFL to New Orleans. In 1962, he created a group that lobbied both the NFL and AFL in the hopes that they would award a franchise to the city. During this time, one of Dixon’s fall back plans was to create his own spring league if neither league chose to award New Orleans with a team. However his efforts were rewarded, as the NFL granted New Orleans with a franchise on November 1, 1966. The club would eventually become known as the New Orleans Saints. But the alternate league idea that Dixon had stuck with him, and he continued to tinker with it over the next 15 years, studying areas where other rival leagues were successful or  had failed to challenge the NFL. By 1980, Dixon had formulated a plan that he felt would become a blueprint necessary for the USFL to succeed. The main key points of his plan were:

• A league wide salary cap of 1.8 million per team (the NFL had no such salary cap at the time)

• Teams should play in NFL sized stadiums

• Hold territorial drafts, ensuring teams would have familiar college stars from the area playing for them.

• Team’s must budget for a large-scale promotional rollout during the preseason of their first year to introduce themselves to the local market.

With the plans in place, the league formally announced their formation on May 11, 1982 in New York City, with the intent to begin play the following year in 1983. One other part of Dixon’s plan was that he wanted to ensure that teams were well financed, and had stable ownership before the clubs began to play. As we’ll get more into later, the USFL attracted some pretty colorful and interesting ownership groups, including actor Burt Reynolds who was a minority owner of the Tampa Bay Bandits. Stable ownership was a key issue that plagued other doomed leagues such as the World Football League of the 1970’s, which had many of it’s franchises struggle due to poor money management by team owners. Dixon asked each team to meet strict financing requirements, as well as having a  $1.5 million dollar line of credit for each franchise in case of emergency. The league would begin with 12 clubs, which were stractically selected to be mostly located from the largest markets in the United States, in order to entice TV networks to buy broadcasting rights to the games. The USFL signed contracts with ABC and ESPN that brought in $13 million in 1983 and $16 million in revenue in 1984.

The League Launches

Before the inaugural season began, there were a few issues that the league faced. The original owner of the planned Los Angeles team, Alex Spanos, dropped out and became part owner of the San Diego Chargers NFL team instead. The move left a vacant ownership spot for the USFL, so a real estate developer named Jim Joseph stepped in and bought the rights to the LA franchise. And speaking of San Diego, the planned USFL team there also ran into issues with finding a stadium to play in. Originally, the team had hoped to play at Jack Murphy Stadium, but due to pressure from both the Chargers and the Padres baseball team, they were denied a lease. The Padres, who shared the stadium with the Chargers at the time, didn’t want another team playing at the facility during the baseball season. Because the USFL saw the Los Angeles market as vital to its success, the league felt that the owners of the San Diego franchise, Bill Daniels and Alan Harmon (who both had roots in the cable TV industry) would be better suited as owners of the LA team. So the USFL forced Jim Joseph to move his planned LA team to Arizona, where they became the Arizona Wranglers. This wasn’t the only stadium issue facing the league either, as Boston’s franchise also had trouble securing a stadium. Initially the team wanted to play at Harvard Stadium, but weren’t able to reach a deal with the university to play there. After being rejected by the New England Patriots home Sullivan Stadium, and Fenway Park which was being used by the Red Sox, the team finally reached a deal to play on the campus of Boston University, at Nickerson Field. The stadium only had a capacity of 21,000, well short of the NFL level capacity that the Dixon plan called for. The USFL also briefly considered adding four Canadian teams, one in Toronto, Montreal, Edmonton, and Vancouver. However, it became pretty clear that the Canadian government would act to protect its own domestic league, the Canadian Football League from foreign competition. In 1974, a similar situation occurred when the World Football League tried to establish a franchise in Toronto. The Canadian government threatened to pass the “Canadian Football League Act” which would have effectively banned American football leagues from operating in the country. Because of this, the USFL dropped the proposal of adding Canadian teams, in favor of adding more American teams to begin with.

The first season of the USFL began on March 6, 1983, launching with 12 teams separated into three divisions. The Philadelphia Stars, Boston Breakers, New Jersey Generals, and Washington Federals formed the Atlantic Division. White the Central Division had the Michigan Panthers, Chicago Blitz, Tampa Bay Bandits, and the Birmingham Stallions. The Pacific Division consisted of the Oakland Invaders, Los Angeles Express, Denver Gold, and the Arizona Wranglers. Although USFL games didn’t exactly sell out most of the time, the launch was fairly successful with teams averaging about 25,000 fans per game. The league also got higher than expected TV ratings, with games reaching a 6.1 Neilsen rating, (translating to about 6 percent of households watching USFL games). The original target projection had been around 5 percent, so this was seen as a pleasant surprise. This was in part due to break out stars like Herschel Walker of the New Jersey Generals, who led the league in rushing with 1,812 yards and was crowned the USFL’s first MVP. The end of the 1983 season culminated in the first ever USFL championship game played at Denver’s Mile High Stadium on July 17, 1983. In front of a crowd of over 50,000 people, the Michigan Panthers matched up against the Philadelphia Stars, with the Panthers holding on to defeat the Stars in a close game 24-22. 

Running Into Trouble

During the offseason, the league expanded to 18 teams from 12. The new teams added were the Houston Gamblers, Pittsburgh Maulers, Memphis Showboats, Jacksonville Bulls, Oklahoma Outlaws, and San Antonio Gunslingers. These weren’t the only moves as well, as the Boston Breakers were unable to find a better stadium solution than the one they had at Boston University. So they decided to relocate to New Orleans and become the New Orleans Breakers. From the beginning of the league, USFL founder David Dixon had held the right to start his own franchise within the league, but chose not to for the 1983 season to focus on helping run the USFL instead. By 1984, he had become so disillusioned with the overall direction of the league, seeing team owners blatantly disregard his “Dixon Plan”, spending wildly on signing players. He felt he had no choice but to sell his franchise option, and leave the USFL for good. Dixon’s franchise was sold for just under $6 millon and would eventually become the Houston Gamblers. Other transactions during the offseason included, the New Jersey Generals being sold to real estate mogul Donald Trump and the LA Express being sold to a self proclaimed “billionaire” J. William Oldenburg. The USFL felt confident that having teams in the two biggest markets with  owners who had the deepest pockets would be a benefit to the league competitively. Having demonstrated viability in its first year, the USFL was starting to attract highly touted players, some of who would eventually go on to become future hall of fame stars, like defensive end Reggie White of the Memphis Showboats. Other stars included, quarterback Jim Kelly of the Houston Gamblers threw for over 5,000 yards on his way to winning the USFL’s Rookie of the Year and MVP award in 1984, while the LA Express were able to lure away BYU quarterback Steve Young, (seen here living out of his car for some reason) by promising him a then record 10-year $40 million dollar guaranteed contract, preventing an NFL team from signing him.

After a strong start to the league in its first season, the second year was far more challenging. Just a couple games into the pre-season, Chicago Blitz’ owner, James Hoffman abandoned the team after falling behind paying the team’s bills. This created a huge problem for the league, as they couldn’t just simply shut down the team due to the TV contracts with ABC and ESPN specifically stating that the USFL had to have teams in the country’s three biggest markets, New York, Los Angeles, and Chicago. So the USFL ended up having to step in and take over the Chicago Blitz franchise due to the team being close to collapsing. The league would later shut down the team with just four games remaining on the schedule, while also announcing that they had found a buyer in Chicago White Sox minority owner Eddie Einhorn (AYEN-HORN) That wasn’t the only issue facing the league at the beginning of the season either. After The Oklahoma Outlaws signed a lease to play in Tusla’s Skelly Stadium, they soon realized they had been deceived on attendance figures for Tulsa Golden Hurricane football games. They had been told that the Tulsa Golden Hurricanes averaged around 30-40,000 fans per game, when in reality they averaged far below that at about 17,000 fans per game. Not long into their first season, the Outlaws announced that they would already be relocating to another city in the offseason due to Skelly Stadium lacking badly needed renovations at the time, and having far too little capacity. To close out the season on July 15, 1984, the Philadelphia Stars once again reached the USFL’s championship game where they defeated the Arizona Wranglers 23-3 in front of a crowd of 52,000 people at Tampa Stadium in Tampa Bay.

The Unraveling

By the end of the 1984 season, things went from bad to worse when it was revealed that the LA Express owner J. William Oldenburg, who as I mentioned earlier was a self proclaimed “billionaire” was under investigation by the FBI for fraudulent activity involving his many businesses. One charge was that he illegally funneled money from a 17.5 million dollar loan to help pay for the LA Express’ team expenses. By the end of the ‘84 season, Oldenburg stopped paying the Express’ bills and like Hoffman of the Chicago Blitz, he abandoned the team. This caused the USFL once again to have to step in and take over the operations of one it’s franchises. A co-owner of the Houston Gamblers, Jay Roulier (ROO-LEE-AY) (ROO-LEE-AIR) offered to step in and buy the Express but that also fell through when it was relieved that he too had lied about his net worth and ability to finance a team. Things got so bad that the other USFL teams had to pitch in and help keep the Express running through the end of the 1985 season. While all of this was going on, on March 4, 1985 the Securities and Exchange Commission raided the offices of ESM Government Securities on suspicions of fraud. The securities dealer company was part owned by Tampa Bay Bandits part-owner Steve Arky. The raid caused one of the largest runs on banks since the great depression, which included a bank owned by Steve Arky’s father in-law Marvin Warner, who also owned the Birmingham Stallions. Warner’s Home State Savings bank subsequently collapsed, forcing him to have to give up control over the Stallions, with even the team’s emergency credit of 1.3 million dollars deemed worthless due it also being backed by the failed Home State Savings Bank. A bankruptcy trustee for ESM implicated Warner as well, saying through a series of fake securities transactions from ESM Government Securities, Warner had been pocketing millions of dollars. Sadly, not long after the raid on ESM, Steve Arky committed suicide, throwing the Tampa Bay Bandits ownership group into disarray. This wasn’t the least of the USFL’s problems either, as San Antonio Gunslingers owner and oil tycoon Clinton Manges (MAIN-GUS)had most of his fortune wiped away in the oil bust of the mid 1980’s. The Gunslingers had to fire many front office personnel, and were notorious for bouncing bad checks. It became such a regular occurrence that Gunslinger players often would race each other to the bank just to try and deposit them before they’d bounce. By June of 1985,  Manges stopped paying his bills and not long after that the Gunslingers became the only USFL team to have their franchise revoked after Manges failed to meet a required deadline to pay his bills by the league. The final game of the 1985 season, and what would turn out to be the final game ever for the league was the 1985 USFL Championship game. The Baltimore Stars (having moved from Philadelphia in the offseason) defeated the Oakland Invaders 28 to 24 in front of 42,000 fans at Giants stadium in New Jersey.

Going into the 1986 season, things were quickly unraveling for the USFL. The Portland Breakers (having moved from New Orleans after the 1984 season) were disbanded before the start of the 1986 season, due to two years of unsustainable losses of 17 million dollars. Both the Los Angeles Express and Oakland Invaders announced that they would suspend operations. The Houston Gamblers and the New Jersey Generals merged, while the Denver Gold and Jacksonville Bulls also merged. Thus shrinking the league from 18 teams down to just 8 teams. Prior to this, back in the summer of 1984 some of the USFL owners (namely Donald Trump, and Eddie Einhorn) proposed playing in the fall rather than in the spring to go directly head to head with the NFL. The reasoning being that if the USFL could somehow force a merger with the NFL, it would substantially increase the values of the merged teams while allowing a large buyout of others. The majority of the  league’s owners voted in favor of moving the USFL to the fall beginning with the 1986 season. With the league’s attendance, popularity, and financial situations in shambles, the idea of a merger between the USFL and the NFL was extremely unlikely. Because of this, Trump was able to convince the other owners that next viable option was for the USFL to sue the NFL over antitrust laws, accusing the NFL of having a monopoly over TV broadcast rights. The USFL essentially pinned its survival on the hope that if it could win a large financial settlement, or verdict over the NFL, it could inject much needed capital into the league once more.

USFL vs NFL

With the lawsuit underway, the USFL claimed that the NFL had strong-armed the big three networks, NBC, CBS, and ABC into refusing to air USFL games during the fall. The USFL also brought up an alleged plan by the NFL called the, “Porter Presentation” that basically layed out how the NFL was plotting to bring down the USFL. One of the goals of the lawsuit was to have the courts void all of the contracts that the NFL had with the TV networks, while seeking damages of $567 million dollars, which would be tripled under antitrust laws to $1.7 billion dollars. The USFL also wanted the court to consider two possible solutions, either the NFL can only have two TV contracts with two of the three networks. Or split the NFL up into two separate 14-team leagues, with each league getting one TV contract with a network. 27 of the 28 NFL teams were named in the suit, notably the Los Angeles Raiders were the only team not named. Raiders owner Al Davis and the NFL famously had a long standing feud over the relocation of the team to Los Angeles in 1982. Knowing this, the USFL asked both Al Davis and legendary broadcaster Howard Cosell (who had recently retired from ABC sports) to be key witnesses for them during the trial. 

The trial got underway in the Spring of 1986, and on July 29th after 42 days, the jury ruled in favor of the USFL. They found that the NFL had “willfully acquired and maintained monopoly status in professional football through predatory tactics”, while also naming the NFL as a “duly adjudicated illegal monopoly”. So USFL, queue the celebration music! You did it! -uh actually… not so fast…while the USFL technically won its case, the jury wasn’t sympathetic to the USFL other claims, noting that the league clearly changed its strategy to force a merger with the NFL. Basically, while the jury found the NFL had a monopoly on football, they didn’t have one when it came to TV broadcasts. Which was true because ESPN, still in the early years of its development, was looking for any competitive edge against the major networks and was happy to broadcast USFL games, even into the fall. The jury most importantly found that the majority of the USFL’s problems were of their own mismanagement and not due to the NFL. For the ruling, the USFL was awarded the lump sum of one dollar, which was tripled to three dollars under the antitrust laws. A far cry from the 1.7 billion that the USFL had hoped they’d receive, which was a major blow to the league’s chances of surviving. Less than a week after the verdict, the USFL’s remaining team owners got together and voted to suspend league operations for the 1986 season. The last remaining hope now was to bank on negotiations between the NFL owners and the NFL player’s union to fall through for the 1987 season, which would result in a player’s strike. NFL players sitting out the 1987 season would potentially create an opportunity for the USFL to lure some star players away. 

Disbandment & Rebirth

While the NFL players union did go on strike in 1987, many of the former USFL players had already signed contracts with the NFL, and a number f r those who didn’t became scab players who played as replacements during the NFL strike, further draining the USFL of talent. It also didn’t help that the league was $160 million dollars in debt around this time. Making matters worse, the Tampa Bay Bandits had a lien put on the franchise, after failing to pay back its debts. Many of the team’s assets were seized, and the team shut down all operations soon after. In another desperation move, the Arizona Outlaws even tried to join the Canadian Football League, but were denied after the CFL owners weren’t sold on the idea of an American team joining. The USFL continued to pursue an appeal of the verdict in 1988, but were rejected by the US court of appeal second circuit. This marked the end of the line for the league, as the remaining teams decided to fold for good. Around this time, the NFL tried to fight having to pay the USFL’s attorney fees due to the verdict, which went all the way to the US Supreme Court in 1990. The NFL lost the appeal, and were forced to pay about $5.5 million dollars in legal fees. Not long after this, a check for $3.76 was finally sent to the USFL, as their awarded sum in damages. The extra 76 cents was due to interest that had built up over the four years since the first ruling, interestingly enough the USFL never even bothered to cash the check.

Since the USFL’s disbandment in 1990, there have been a few other leagues that have sprung up to challenge the NFL’s popularity, most notably the first iteration of the XFL in the early 2000’s. Those leagues, just like the USFL before them, struggled to survive after the initial novelty of their existence wore off. However, in recent years there have been a couple of spring and fall football leagues that have risen in the hopes of becoming somewhat of a talent farm system to the NFL, rather than a competitor to the league. Throughout the 2010’s, a sports contract lawyer named Brian Woods created both the Fall Experimental Football League and the Spring League to mixed results. The Fall Experimental Football League folded after two seasons in 2016, while the Spring League launched a year later in 2017 has had continued success with reportedly over 100 former players getting contracts with NFL teams. In 2021, Woods announced his intention of bringing back the USFL as a developmental league, which would most likely replace the Spring League. Back in 2010, another league also tried to bring back the USFL name but plans fell through before the first season could kickoff. Partnering with Fox Sports, Woods acquired the rights to the USFL name, and trademarks of the various teams and plans to launch the new USFL in April of 2022. In an interesting move, the league will start with eight teams but will have them all play in one city (at least for the first season) in Birmingham, Alabama (where the league is headquartered). Games will be split between the brand new Protective Stadium which opened in 2021, and the classic Legion Field which first opened in 1927. For the playoffs and championship game, the matches will move to Canton, Ohio where they’ll be played at the Pro Football Hall of Fame. The eight teams will be separated into two divisions, with the Houston Gamblers, New Orleans Breakers, Tampa Bay Bandits, and Birmingham Stall  ions playing in the South Division. While the New Jersey Generals, Michigan Panthers, Pittsburgh Maulers, and Philadelphia Stars will make up the North Division. The new version of the USFL also acquired the rights to team names who will not appear in the first season such as the Chicago Blitz, Los Angeles Express, and Jacksonville Bulls. So there’s hope that those teams and possibly more will arrive in future seasons, and lets hope that they bring back the refs in shorts look, because that would be amazing.

So what did you guys think of the USFL suing the NFL to either force a merger or break the NFL up? And what do you think about the USFL coming back, will you watch? Let me know in the comments below!