Today is Harry Usher's fourth official day as commissioner of the U.S. Football League, whose teams lost what he conservatively estimates at $100 million in its first two years. It also might prove to be one of the most important days of his stewardship in determining if the league will survive.
He is scheduled to testify at Senate Commerce Committee hearings on two bills that would restrict franchise relocation in professional sports. While other league executives are likely to ask Congress for additional antitrust exemptions, to relieve the bidding for teams in the wake of the Raiders' $49 million antitrust victory over the NFL, Usher will argue otherwise.
In a Friday night interview, he said Congress is not considering "the root of the problem" in the two bills in the Senate Commerce Committee and two others scheduled for hearings Wednesday before the Senate Judiciary Committee. The root of the problem, he said, is an NFL monopoly created unintentionally by Congress when it granted antitrust exemptions in 1961 to pool television negotiations and in 1969 to enable the NFL to merge with the AFL.
The AFL was on NBC; the NFL was on CBS; then the merged NFL added ABC for Monday night football in 1970. As a result, Usher said, it "becomes virtually impossible for a new league to compete on a firm economic basis." Although each of the three networks is a larger business than the NFL (gross revenues estimated at $750 million last season), Usher contends none of the three can "resist the incredible economic power that the NFL has."
His solution is to ask Congress to limit the NFL to appearing on only one or two networks.
Without television revenue, teams will continue to lose money, investors will stop investing and, ultimately, the USFL will fold. ABC holds rights to televise the USFL's spring games, but the league decided last year to switch from a spring to a fall playing season in 1986.
"How many investors can you get to come in if, in fact, you have shortfall, if you can't see a result of your investment, or the possibility of the result of your investment?" Usher asked. "It is difficult then to attract investors. So the people who are here don't necessarily have to have deeper pockets.
"It's the ability to attract deep pockets which is equally relevant. If there is an opportunity for a competitive window (ability to televise on the network on Sunday), then I don't think we're going to have a problem."
He declined to give specific examples of the networks' refusal to deal with the USFL for fall games, saying that was part of the evidentiary process in the league's $1.3 billion antitrust suit against the NFL. That case is not expected to come to trial before the end of the year, at the earliest.
He said the relevance of the NFL-network alliance to today's hearings is thus:
"When you take this monopolistic position the NFL has, and it builds up and builds up so that the television revenues are a material portion, if not the material portion, of their revenues and economic base, then that monopolistic position is used to restrict the number of franchises that divide into the number of television payments. In the 14 years in which they've held this monpolistic position, they've only expanded twice, Seattle and Tampa Bay in 1974.
"So year in, year out, you have all these cities like Jacksonville, Memphis, Phoenix and Indianapolis all applying for franchises. And they (the NFL) say, no, because that dilutes the television, and the net result is that these teams have become so powerful.
"Then you throw on the . . . Raiders case, allowing them to freely transfer arguably -- because it's an antitrust violation to prohibit them -- that these cities have basically gone paranoid . . . leveraged by the fact the team will move to them, in which case you make an incredible deal, or the team will move out from you, in which case they make an incredible deal to keep the team . . .
"But instead of addressing the problem -- which is the monopolistic position that this is allowed to happen -- they are going to consider bills that in fact enhance the monopolistic position, to restrict transfer, which is somewhat bizarre."
And how does he think Congress will respond to him?
"I don't know. Nobody's ever told them this before, I don't think. I'd like to compete . . . When you just refuse to deal, it's not fair. Just let us compete."
Usher represents a change in direction for USFL owners. He replaced Chet Simmons, a former network and cable sports executive whom the league hired as a front man who had credibility with the television people. In Usher, they have hired a day-to-day chief operating officer, a man who teamed with Peter Ueberroth to make the L.A. Olympics both a financial and artistic success.
Usher gave up his Beverly Hills law practice five years ago to join the LAOOC. He sees similarities between that job and this one.
"I remember telling people I was giving up my law practice and they said, 'Jeez, there aren't going to be any Olympics in 1984.' Carter had announced we might not go and there might not be another Olympics. They said, 'I don't know what you're doing.' That was a common comment when I started. In that respect I find a lot of similarities. People say I signed a three-year agreement (for a reported $250,000 annually), but they don't think I'm going to have a league in a year."
But he has plenty of incentive to be successful. His deal with the USFL includes a percentage of any network television contract the league lands, according to The New York Times. The newspaper has reported that he will get 1 percent of the contract up to a certain undisclosed figure, 2 percent if more than that. The Times also reported that, in the event of a merger with the NFL, Usher would be able to negotiate a bonus payment from the USFL.
It's been rather hectic during his 2 1/2 weeks of official and unofficial time on the job. "In the Olympic Games, coming in five years before, I was able to . . . set the agenda and the timetable in many respects. The difference here is that it's coming at me from every conceivable angle right now . . . It makes me dance faster."
But he already has started to bring some stability to a league in which he says only one team, the Tampa Bay Bandits, has a chance to be profitable this season. All the others, he predicted, will lose at least $1 million. He called his first league meeting last week. The owners unanimously adopted a plan to subsidize the Los Angeles and Houston franchises, and to seek new ownership for the L.A. Express. That move made sure that quarterbacks Steve Young and Jim Kelly remain in the USFL.
"I felt very good about it in the sense that the owners rallied and unanimously agreed to dig into their pockets further for an unbudgeted, unexpected expenditure that is substantial for each of them," said Usher, who declined to give specific figures.