XFL Co-owner and The Garcia Companies CEO Dany Garcia spoke with Yahoo Finance's Zack Guzman about everything XFL, including how she acquired the football league, progressing through the pandemic, working with Dwayne "The Rock" Johnson, and the future outlook for the league.
- Dany Garcia bought the XFL this year with her ex-husband and longtime business partner Dwayne "The Rock" Johnson and the private equity firm RedBird Capital. The deal makes Garcia, a professional athlete in her own right, the first woman to own an equal or majority stake in a major pro sports league in the United States. Garcia now plans to reboot the XFL as a serious competitor to the NFL.
ZACK GUZMAN: All right, Dany Garcia-- chairwoman, founder, and CEO of The Garcia Companies, and new co-owner of the XFL. Thanks so much for being here.
DANY GARCIA: My pleasure.
ZACK GUZMAN: I want to preface this interview with full disclosure that I have watched the XFL since I was a wee lad back in 2001 when WWE founder Vince McMahon co-launched league and then, of course, when they relaunched the league again here. I covered that for Yahoo Finance. I still have my XFL badge here for field clearance, so that's important to point out. It holds a near and dear place in my heart. And as such, we're going to be asking hard hitting questions-- extremely hard questions, which I think is only fitting for a league that was once referred to as the "Extreme Football League." But I appreciate you being here.
So first off, let's talk about how you came to acquire the XFL out of bankruptcy. Because it was your bid of $15 million for a league that Vince McMahon had poured $200 million into building before the pandemic brought it to its knees and eventually chapter 11 bankruptcy back in April, setting up the potential for what could be the greatest sports acquisitions of all time. So what made you and your partners want to jump in on it?
DANY GARCIA: Well, like you, I had also seen the first iteration in 2001-- a little bit differently because I was involved with the WWE at that time in a different manner. But I was actually, also like you, just as excited about the 2019, 2020 relaunch and what they had put on the field. So, you know, when Vince had made this second attempt, I was wondering. I was like, you know, is there a little room for some partners? And my hope was in the future there was some franchise opportunities.
So I had literally had in my head I love this iteration. I love the space. I love the opportunity that it gives for the athletes here and was hoping there might be something in the future. Of course, COVID Hit surprisingly, he went into bankruptcy with the XFL, and it was an easy decision. It was what I call a "soul decision," right? I was very, very passionate about the prospects of what this league could be.
And so we went to work to say, OK, we think there's a premise here. Can we go through-- get through the information, get through the bankruptcy, and find the "there" there of the process. I spent about two weeks on it myself with my executive team of counsel, feeling good enough to then make that call to DJ and say, hey, I have an idea. Let's do this, and he was on board. And then we-- you know, we spent the summer just getting into the numbers and getting into the deal, trying to put something together so we could, you know, go to the bid, win that bid, which we did.
ZACK GUZMAN: Yeah. And you say DJ. Just everyone's aware there, that would be Dwayne, The Rock, Johnson-- your ex-husband and business partner. And, of course, your other partner here in RedBird Capital Partners being involved on the deal. But I mean, you're a very skilled businesswoman.
I mean, the resume's phenomenal, and I think that's why I was so excited to get the chance to chat with you. But when you're talking about that, obviously there's never an easy deal. There's always risks here. And, of course, the XFL came to an abrupt end with the pandemic just as all of sports did for a bit there.
But even without that, there were questions about the viability of the League. Of course, McMahon said he was prepared to lose money for a couple of years in the relaunch, and the bankruptcy filings revealed some of the finances there that they generated $14 million in revenue through the first 3 and 1/2 weeks of gameplay and posted a $44 million loss during that same period.
But notably, the league gave away TV rights for free to ESPN, Fox, and ABC. There was hope that eventually that payday would come. So now that it's proven capable of capturing millions of Americans and drawing those eyeballs, what is the business model look like for you moving forward?
DANY GARCIA: Well, you know, right from the beginning-- and Zack, you've done great homework. I so appreciate it. You know, the league can't-- it's a different-- as we like to say, it's a different universe now for the league. You know, those five weeks actually did help to prove-- and especially from the network and the media partners. They were able to see numbers, and the actual ratings and the numbers exceeded expectations.
You know, I think there was probably a public perception of what it would do, but then there was in the industry a realistic perception of could it outperform. And it did, which was wonderful. So, you know, going forward having media rights deals where there are no fees-- that's not the option that we're looking at. And, in fact, we're in robust conversations with numerous partners, and the representation is going to be these are different deals.
And everyone's aware of them. And that's-- you know, like I said, we have five weeks underneath our belt to discuss. But I think just as importantly it's the execution and the opportunities that new ownership brings to the interpretation of the XFL, which begins to change the business model. And if you're taking that point of view, you begin to see a lot of white spaces, and there's more opportunities for revenue streams that we can lean into.
So the business model-- there's a traditional aspect because football is football. But at the same time, we've overlaid additional revenue streams, identified additional revenue opportunities, identified various ways to connect with all the participants that are around the XFL value chain. So it's not just the fans. It's also the athletes. It's also our partners and our sponsorship partners.
ZACK GUZMAN: And when you think about where this league came from, I think that's a big question of what this iteration will look like compared to the 2020 iteration or the 2001 iteration. Because if you go back to 2001, DJ, The Rock, was there at the LA debut. And he was riling up the crowd talking about what the XFL represents versus what you get from the NFL that took a team away from Los Angeles.
He was pretty forceful with that speech, and that was his connection with the XFL, of course, the McMahon WWE connection as well. But when you think about that, what should people expect from this iteration of the XFL in terms of how it looks at the NFL as either a partner or a competitor?
DANY GARCIA: So I see ourselves as a cohort of the NFL. We are in the same-- we're working in the same space, right? And we are interpreting the game slightly differently. We have a faster pace, obviously-- a shorter time.
We made-- we will keep a number of the rule changes that were made in the 2020 season. We're actually going through a download now with players and our coaches to see what actually did work, and what didn't work, and if there were things that were a little bit rough.
You know, the access and the accessibility to the athletes, hearing the plays, seeing the reviews-- you know, we had things in place that the audience, you know, responded to in a major way. It was fascinating. You were in there, and you felt like this brought you closer to the athlete on the field instead of, you know, distancing you.
Because it has to be a quality of game, right? It's not about anti this or anti that. It's can we bring the best game possible? Can it be culturally relevant to our players, and to our fans, and to our partners? And that is a yes for us.
ZACK GUZMAN: But in terms of working with the NFL-- and maybe not looking at it necessarily as a competitor or a partner-- but there is the question of viability when you have good players maybe moving on. We saw it with a couple even in 2020 who moved on to the NFL, which is good. But in terms of capitalizing on that and the question of whether or not you can build and capture the upside if you have people tuning in to watch these players, how do you look at that as maybe, I guess, a challenge or an opportunity moving forward with the league?
DANY GARCIA: You know what? I think, first of all, all challenges-- and this is mindset. I think all challenges are opportunity. There is a-- when you look at the XFL, you have to look at who are we in the next two to three years? And who are we in the next three to five years? And recognize that that's going to be a process and journey throughout the XFL execution, especially if we're looking at next five and 10 years.
We're going to be in a position where, yes, will we have some transient players. And is that fantastic? Is that great for them? Can we still get the quality of play that we need even if we may have a player for just a few years? Our premise is yes, we absolutely can, right?
We know the number of football college eligible athletes coming out who will never play a game and never play a down professionally. And so we know that pool is very, very large. What we want to concentrate on is-- and we get to do this a bit more because this is single ownership, right? When you have single ownership, you actually can culturally create a place where the athletes are excited to play, where there's an investment in who they are, where they are given the best opportunity not only for their brand but their performance, treated like stars and, most importantly, have their stories told.
So right now our concentration is to do a great job with who we have and the athletes we have today and build upon that. Because our salaries will increase. We will become more competitive, right, in success. But do we deliver something today at the price point that is viable, right, to make the XFL successful and sustainable? Can we deliver a package that is still competitive? And I think you look at those first five weeks, and you saw something very special there.
You also and what's really interesting-- and this is a little bit more psychological. When you look at the athletes that are coming to the XFL in the next year and a half, they all have something to prove. Every play matters. It's a little bit different than when you have a, you know, $250 million contract or a $30 million a year contract, which is also amazing and fantastic. I want that for a lot of athletes.
But there's a heart and a soul to the play, you see, because [INAUDIBLE] opportunity and possibility. And I think when we look at sports on the whole, we want to see that heart, right, if you're a fan of sports. So that's a really important intangible that lives within XFL.
ZACK GUZMAN: But since you said, you know, "X" in XFL right now stands for "ex," it brings to mind and questions too about your own ex here and what DJ's role might be in the league. A lot of people have been speculating about what his role might be versus your role. Some people are say you should be in the booth talking about the games. Are you looking to maybe use his brand to bring some of that cachet back to the XFL here? What's the strategy around that?
DANY GARCIA: First, I've got to acknowledge the transition with the ex. That was so masterfully done, Zack.
ZACK GUZMAN: [INAUDIBLE].
DANY GARCIA: I love when people are so-- and I also appreciate when the public gets really vocal of how Dwayne should be used. So, you know, Dwayne is an owner-- a co-owner with us and, obviously, RedBird and Gerry Cardinal. So that element is-- in fact, for us, we are extremely hands on. And the XFL is a day to day process for me in particular.
And right now because we're filming "Red Notice," it's an in-between seeing process for DJ. But we have his schedule blocked out for the season, for each season, so that we actually can be on the road and go to the games. So there is a real presence not only from the corporate and storytelling. Because even though everyone knows DJ is, you know, in front of the camera, he's actually an incredible producer and content producer.
So, you know, he's also a former athlete. I'm a professional athlete. He's a former football player. He would be playing in the XFL if we went back so many years ago and that opportunity was there. So, you know, that interaction with the athletes-- that representation, the interaction with the fans, making our games, our live games an event not just because you're watching the game but what happens before, what happens in the booth-- we actually plan on being extremely forward facing.
So that that'll be our loudest time, but we also have content that's happening throughout the year, where you'll be hearing from the owners. And we'll have transparency as to what we're doing. Dwayne will be involved in that as well. He's a very hands on owner.
ZACK GUZMAN: Well, in terms of your roll-- I mean, beyond the decisions we've already described in trying to make the XFL successful in this iteration-- you're also shattering the glass ceiling here too, becoming the first female equal or majority owner of a major sports league in the US. You talked about the importance of that and representing unheard or underrepresented voices in prior business endeavors.
And with the league, you said you expect it to be extremely vocal about normalizing equality and equalizing justice and patriotism is about expressing yourself. So talk to me about how important that is for an achievement, not just for you, but for a lot of those voices that we don't hear from in sports.
DANY GARCIA: We know it's-- we talked a little bit about the intensity of getting to, you know, the point of bidding and auction, and then getting the call. You have the XFL. So I have to tell you it was that moment after the call where the enormity-- first, it was incredible joy because this was, like I said, a soul decision. So I couldn't believe it was here. We had done it.
But then it was a few days later when I began to recognize that through this process I had made history. And that's-- that's a very humbling moment, Zack, when you have this. You know, you are defining a period of time that never was.
And so there is no-- there is no "that was great," you know. It's not that. It's the weight of it. You actually appreciate it. You feel the joy, but then you recognize that the decisions you need to make and should make going forward-- you want to make them in a loud manner so that people can be inspired and learn and that you're carrying the responsibility.
It's not just the moment. It's what do you do with that moment. So I feel the weight of it, and I accept it. I think it's amazing.
I don't think-- you know, if you had asked me at 15 would you, Dany Garcia, want to own a sports league? I would have said yes, absolutely. If you had said and will you be-- you know, do you want to make history? I would not be thinking in that process. But now that I have, I'm extremely grateful. And I'm grateful that my expressions mean something to so many people.
ZACK GUZMAN: Dany Garcia, I can't thank you enough for the chat, and good luck with everything out there.
DANY GARCIA: Thanks so much, Zack. It was a pleasure. I look forward to seeing you hopefully in person.
ZACK GUZMAN: Yeah, I mean, I don't-- I don't think this will work down there at the games, but we'll see what happens here when we relaunch with Dany Garcia. Thanks again.
DANY GARCIA: Thanks, Zack. That was great.
ZACK GUZMAN: All right, awesome.