The Fan Controlled Football League: The Future of Digital Sports Properties?

Jan 24, 2022

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Executive Brief: Today’s newsletter introduces you to The Fan Controlled Football League and its business model. I’ll briefly walk you through how the league works, its history, how it will scale, and why I think it will succeed where so many other football leagues have failed. Enjoy!

The Fan Controlled Football League (FCF) is a professional indoor football league created in 2017 as the first sports league controlled by fans. FCF is professional football re-imagined for the modern digital world and is interacted with primarily through a mobile application. The league produces real games played in a single high-tech studio arena which are streamed live on Twitch. The hook is that fans are in complete control and are rewarded consistently for their interaction, engagement, and consumption of the league’s content.

The History

Before diving into the business, let’s break down some history. As a child, Sohrob Farudi was a diehard Dallas Cowboys fan during the 1980s and 1990s. Like any young fan, Farudi wanted to grow up to be involved in sports and dreamt of owning the Dallas Cowboys. Farudi also enjoyed playing sports, video games and participating in fantasy football. As he aged, his generation’s growth intersected with the internet generation and technology. Farudi became fascinated by finance and technology when technology was integrated into daily life.

In 2008, the idea “Project Franchise” was covered by comedian Steve Hofstetter in the New York Times as a satirical piece discussing the idea of a fan-controlled baseball team. At the time, the project was just a website created by Grant Cohen and some investors. The project ultimately failed because of debt accumulation for owning a team. Still, the idea floated around for a few years until it landed on the desk of an Arena Football League team minority owner in 2015. That owner was Sohrob Farudi.

Farudi contacted Cohen, and they agreed to revive the idea. In April 2016, Project Franchise purchased an expansion team in the Indoor Football League for the 2017 season. The group created a mobile app for subscribed fans to vote on naming the team, choosing its colours, and hiring a head coach before the season started. They were essentially beta-testing the concept in an already existing league. The experiment succeeded and proved the concept.

Project Franchise launched its league, the Interactive Football League. It was re-branded as the Electronic Football League (eFL) before becoming the Fan Controlled Football league in 2017. The initial start date was in 2018, but complications arose, forcing launch back. The league garnered interest from former NFL players Chad Johnson, Marshawn Lynch, and Richard Sherman during the hiatus. It also attracted various hedge fund investors and high-profile personal investors, including Bleacher Report co-founder Dave Finnocchio and Reddit co-founder Alexis Ohanian. Mike Tyson, Quavo, Bob Menary, Renee Montgomery, and others got involved.

How it Works

The league began its inaugural season in February 2021, with four teams competing in a 12-game format over six weeks. The FCF’s second season, “Season v.2.0” is scheduled to launch on April 16th, 2022. The league announced an expansion to eight teams for the 2022 season based on year one success.

Currently, the teams are:

The Beasts, owned by Marshawn Lynch, Miro and Renee Montgomery
The Glacier Boyz, owned by Richard Sherman, Quavo, Deestroying, and Adin Ross
The Wild Aces, owned by Greg Miller, Austin Ekeler, Rachel Lindsay and Barbara Dunkelman
The Zappers, owned by Trevor May, Dalvin Cook, Bob Menery and Ronnie 2k

The 2022 season will feature four new teams that will operate primarily by integrating NFTs. These teams include:

8oki, owned by Steve Aoki and “8”
KoD, owned by Drew Austin, Tiki Barber, Ronde Barber, and many others.
Bored Apes, owned by Lindsey Byrnes, among others
Gutter Cats, owned by Jamal Anderson and spottiwifi

FCF is built for Generation Z consumption, continually optimizing for dopamine hits, engagement and community building. FCF is a 7-on-7 condensed version of regular football games. It’s played on a 50-yard field with a 3-man line, a real sideline, and optimizes big-time athletes making big-time plays. There is no kicking or special teams. Teams start at their 10-yard line and drive 40 yards to score. If teams score, extra points are 1-on-1 single-play battles between the top wide receiver and the top defensive back; the quarterback has three seconds to throw the ball. Games are a little over one hour long, fast-paced, and hard-hitting. It’s a running time clock; there are no replays; it’s all action, all the time.

Why FCF Is Interesting

When traditional sports leagues are competing for Generation Z attention, FCF has built itself around Generation Z habits and interests. The league is a digital media first business, and its focus is providing high-level fan ownership and engagement.

All games happen at the Infinite Energy Arena in Duluth, Georgia. Instead of pursuing the traditional city-based franchise route, FCF took the influencer/owner-based route. They did this for multiple reasons.

Fan Engagement

By establishing influencer identities for each team, they build a brand for the team and its players without having to attach the team to a city. This allows fans from anywhere to align their fandom with influencers and teams. Doing so makes scaling the league much easier than the traditional city-based route. Influencers build the team’s brand, fans engage and identify with the team, and fans are rewarded for the time and effort in several ways.

FCF’s mission is to give power to the fans. The strategy gamifies the traditional football product by integrating video game-like features. FCF integrates fan engagement into gameday operations by allowing fans to control weekly draft picks, play-selection in-game, weekly MVPs, among other gameday operations.

FCF prioritizes engagement throughout the week by providing incentives to fans for engaging with the league, the teams, and its players on Twitch and social media. Different ways FCF optimizes digital fan experience is by offering FanIQ points. The more fans interact with FCF via online channels, the more times fans vote leads to success, the more times they select plays that succeed, the more FanIQ the fan builds.

FCF allows fans to earn badges during the week leading up to gameday and during games. The different badges give fans bonuses to be used in-game that week for their team. FCF offers other incentivized promotions that incentivize fans to participate, engage, and keep coming back for more.

FCF has also integrated NFTs into their operations. They developed their own NFTs and released them for current teams. With their four expansion teams entering the league in the upcoming season, FCF makes limited NFTs available for fans to purchase to become part of these new teams. Fans can use the NFTs on their profiles, but they identify ownership and act as the fans’ in-game identity on the FCF platform.

Check out their stadium here.

Digital Production

By delegating gameday in-person operations for all teams to one stadium, FCF removed high costs of travelling between cities and stadiums across the U.S. The league’s leadership saw the factors that led to difficulties for previous startup football leagues, and overhead costs were significant. Playing the games in one area bypasses those issues, allows for shared costs shared services, and allows for easier development of digital content.

The league can easily control and amplify gameday production this way too. By playing games in one arena, the league can control lighting, sound, cameras, introductions, and every other piece of game day production. They have drone cameras helmet cameras and are integrating virtual reality. Essentially, the league can build a WWE or rock concert-type environment for gameday. The model is like Overtime Elite’s gameday operations.

The in-person experience is electric. Fans are on top of the game; there are lights, sounds, and high-level production. While this makes in-person viewing a lot of fun, the model gives FCF the power to dictate their product’s digital experience, which is the central aspect of scalability.

The exciting thing about the model is that it’s not trying to compete with the NFL or other football leagues; instead, it built its lane and focuses on Generation Z consumers while also opening itself to all different types of fans. It could also bridge the generation gap by offering exciting high-level football for older fans while their kids watch and interact with the game via their mobile phones. FCF could reinvent how fans consume football.

The current setup allows FCF to develop its live weekly programming, including segments “Talkin’ Bout Practice”, “Tape Don’t Lie”, “Deep Fade”, “Players Club”, “Monday Madness”, “The Fan Controlled Show”. These digital media properties build narratives, offer behind the scenes for fans, and integrate the players with fans and team owners.

Check out Johnny Manziel and others in the Week 1 Game Highlights:

Distribution and Funding

The league focuses on digital content using internet streaming via Twitch as its leading television platform. Along with other sub-distributors, FCF has signed a deal with NBCUniversal subsidiary NBCLX and Peacock to broadcast every game of the 2022 season. The FCF saw a steady increase in viewership through its first five weeks of 2021, from 735,000 viewers in the first week to 2.1 million in the playoffs.

After establishing a successful product on the field, FCF showed it is a viable option for investment. FCF raised a total of $3 million from angel investors in a pre-seed round before closing on a $12 million seed round in the summer of 2020. Then, after a successful 2021 season, the league secured a $40 million Series A funding round in January 2022, giving it another 2-years of runway to continue building the product. Notably, the Series A round was led by Animoca Brands and Delphi Digital, both venture capital firms specializing in cryptocurrency investments. The synergy fits perfectly with FCF’s plan to tokenize the economy within their game and build future properties using non-fungible tokens (NFTs).

The league plans to play two seasons per year, one in the spring and one in the fall and plans to expand to 20 teams by year five. With its recent funding, the parent company of the league plans to expand into another sport in the next year or two.

What’s Next for FCF

The interesting thing about FCF is its long-term growth potential. The value of sports is through live rights, franchises, and content. FCF’s gameday operation and the ecosystem their building on social media, the blockchain, and Twitch lends itself greatly to engaging consumers and producing high-level content.

The league will develop shoulder content and storylines about players in the league. They’ll build the players’ brand, engage the influencers attached to each team, integrate NFTs to tokenize the economy in-game, and continually build teams using their current model. You’ll likely also see FCF integrate real-world utility to their NFTs by attaching perks like signed jerseys, options to attend games, meet and greets with players and team owners, etc.

FCF will continue to build out their player talent pool. When picking players, they’ll likely focus on individuals with interesting backstories or with great personalities so that FCF can build micro-influencers out of their athletes. The league partners with its athletes and Twitch to help make their online brands while building the team and league brands. The exciting part is that these young athletes are the same generation as many fans the league is trying to attract. As fans and players enter the ecosystem, they all get out what they put in.

On the NFT point, the pandemic accelerated the space for everyone. However, FCF was already researching and experimenting with integrating blockchain and tokenomics into their ecosystem. It only makes sense; a digital-focused, community-focused sports league incorporates NFTs and builds their community from there. You’ll likely see them develop digital collectibles while building out a digital currency and economy within the league’s platform. This is also where venture capital will invest aggressively as businesses like FCF provide real-world utility to blockchain technology and build communities around it.

The league will continue to generate and grow sponsorship revenue, live game fees, sell merchandise, digital collectibles, and other NFTs. It will also build more in-season engagement opportunities for fans and more engagement options on game day. The league will likely integrate sports betting in future years of operations while investing in scalability on the digital side, adding teams to the league, creating content outside of gameday, and developing other assets.

On the sponsorship front, FCF is quite interesting. Many traditional and legacy companies have avoided advertising on Twitch to avoid first-person shooter games, the Grand Theft Auto franchise and other Twitch-popular games. FCF is much safer for these sponsors from a public relations perspective, and the league capitalized on that leverage when securing sponsors. Per FCF, all sponsors were happy and are back for the second season leading to 6-figure sponsorship across the league.

The league combines the Madden NFL video game with fantasy football community-building and merges it with real-life football. Essentially, they’re marrying the best parts of multiple developed products and then giving the power to the fan while building community. As a business, they’re setting themselves up for success.

Whether they succeed or not, time will tell. But, I am excited to watch them take their swing.

Thank you for reading. Have a great day, and we’ll talk next week!

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Kendal