BRADY NELSON: THE SPOKANE SHOCK & the AFL

by Jay Luster

02/20/2018

 At the end of the 2017 IFL season, the Spokane Shock announced they were folding the franchise.  A few weeks later I learned one of their former owner’s, Brady Nelson, was doing some consultant work with the Richmond Roughriders.  Nelson wasn’t with the Shock when they folded, he had departed several seasons earlier, but with his knowledge of arena football and the AFL, in particular, it seemed he would be an interesting interview.  He wasn’t just a little interesting, he blew me away with his knowledge and insight into the league and why they’re struggling.  On the heels of the Jeff Bouchy: State of Arena Football interview, Nelson is the perfect follow up.  Thanks for reading.

 

AF Insider:  Hi Brady, thanks for agreeing to speak with me.  You were the owner of the Spokane Shock but sold the team a few seasons ago.  Why did you decide to sell the Shock?

Brady Nelson:  The Shock started in AF2 and then went into the AFL in 2010.  I sold the team at the end of the 2013 season.  I bought the franchise when I was 27 and built it up.  In my personal opinion, I love the game, I think arena football is great and if AF2 had been able to stick around we would have been happy to remain there.  We had a great following and were sold out for eight consecutive seasons, every game, every seat.  The AFL was heading in an unsustainable direction and I didn’t find enjoyment in it anymore.  I wanted to look for something else and somebody wanted to buy it so it worked out for everybody.  

 

AF Insider:  What happened that made it unsustainable?

Brady Nelson:  The AFL filed for bankruptcy in 2009 and there was uncertainty about ownership of the trademarks.  Our trademarks were going to get swallowed up in bankruptcy, so most of the AF2 teams had to team up and then buy their names and trademarks from the bankruptcy court.  Half the teams in the AFL wanted to shut down permanently, buy their names and trademarks and bury them.  Because of the uncertainty, a handful of AFL owners, and all the AF2 owners joined the bidding and bought the names and trademarks back with the idea of relaunching the AFL and AF2.  In order for that to happen the old AF2 had to go away because it was now owned by a bankrupt entity.  We launched AF1 and the initial concept was to have two tiers, AFL, and a new AF2.  In the process of that, we lost several AF2 teams. They either shut down or moved to a different league.  At one point, Doug MacGregor owned like nine or ten franchises and when he decided not to keep them going it hurt the league.

 

AF Insider:  Yes it did.  Now there are now only four teams left.

Brady Nelson:  Yes, the AFL is a shell of what it used to be.  There were a couple of major things, in my opinion, that was the cause of the demise.  For one, medical costs, to treat the players correctly, are a big deal and when the NFL had their big $450 million concussion settlement you couldn’t get insurance anymore for football.  We had to self-insure and that meant our premiums were dramatic.  For every dollar of player salary, the self-insurance costs skyrocketed.   

 

AF Insider:  So you bought back your trademark and logo and, even without MacGregor’s teams and the league went forward.  What happened next?

Brady Nelson:  From there 2010 launched pretty well, 2011 was a good building year and then 2012 we added more teams and that’s when organized labor came in and attempted to bargain for the players.  That was, in my opinion, the beginning of the end right there.

 

AF Insider:  That was the beginning of the end for the teams in the new AFL, but why did the AFL end up in bankruptcy court, to begin with?

Brady Nelson:  The old AFL was not profitable.  They may have had better revenue because they were in bigger markets, but they were losing money, every single team. They shut their doors because they couldn’t make it work. They wanted to restructure, reorganize. AF1 was an attempt to operate arena football at a level where you could make a profit, whereas the old AFL, which some people see as the glory days, was unsustainable and the heavy heavy losses were unsustainable.

 

AF Insider:  So many teams gone, Orlando, Tampa, Spokane, LA, San Jose, Portland, New Orleans etc. Now there are 2 owners running 4 teams and those teams are losing money?

Brady Nelson:  Correct

 

AF Insider:  With that little participation, and everyone losing money, it’s hardly a league at all, so what’s the purpose?

Brady Nelson:  Well, you’ve got one owner, the Washington team, they’re operating their team to experiment with the technology of their streaming platform. That’s what’s in it for them. Losing a million or two million dollars per team, which is what I’m sure they are doing, that’s nothing in the grand scheme of things.  Paying more for the same results doesn’t make any sense.

 

AF Insider NOTE:  if Ted Leonsis is in it to experiment and perfect streaming technology that has a time limit on how long he’ll operate the team. Either he makes it work or concludes he can’t make it work, but either way, the experiment will end and it seems like the logical conclusion is both Washington and Baltimore will fold.

 

AF Insider: After you left the Shock, what was next for you?

Brady Nelson:  When I sold my franchise in January 2014, but really after Arena Bowl 2013, I was out. I had made the decision to launch the Portland Thunder and I was six months into that already.

 

AF Insider:  The union seems to play a big part in owners business decisions regarding the future of their teams and, by extension, the league.  Can you talk about that?

Brady Nelson:  You have individual owners who are running it as a business and they were in the minority.  Three of us ended up negotiating on behalf of the owners. The former Commissioner, Jerry Kurtz, he gets a lot of negative publicity but actually did a pretty good job.  It came down to the last minute.  Three owners, including myself, said we’ve got to go out there and get something done. That’s what we did, the union was there, and Jerry was there.

 

AF Insider:  A moment ago you said only some of the owners were running their teams as a business.  What did you mean by that?

Brady Nelson:  OK, so you have individual owners who run their team like a business  Next you have hobbyist owners whose motivation was not about dollars and cents; and then there were major league owners. They own the building and so they can sustain losses, but they’re not going to try to cheat to win. They can sustain losses (they remain participants) and that’s the value of having those guys. That will keep it going.

 

AF Insider:  Yes, but keeping it going is not the same as succeeding, is it?

Brady Nelson:  Well that’s the thing. There’s no emotion with the big teams, they’ll shut it down in a (boardroom) meeting. Because they have no emotional investment they don’t care. If they have losses it doesn’t mean a thing. They have bigger fish to fry than the arena football league. For them arena football might be the smallest and most troublesome piece of their organization, so if things aren’t the way they want they’ll shut it down and move on.

 

AF Insider:  How does that translate to today’s AFL?

Brady Nelson:  The Philadelphia group are individual owners, it’s their own personal money they’ve invested.  But a guy like Ted Leonsis, if he gets too much negative publicity or too much chirping from (AFLPU Executive Director) Ivan Soto, he’ll just shut it down. He doesn’t care.

 

AF Insider:  I know you had left the Portland Thunder a year before they folded, but according to some news reports, they left a trail of unpaid bills behind them.  Is that true?  

Arena Football League leaves trail of unpaid bills in Portland

Not really. They had a deal negotiated with the AFL. They produced a documentary series which they did in return for a cost reduction from the league. When the new commissioner was hired (Scott Butera) he did not want to honor that. So they withheld the amount of the credit for payment to the AFL. The AFL then came in and seized the market. The actual Portland ownership group, Terry Emmert, they paid their bills, but the league didn’t follow up. When the league takes it over, they’re done, they don’t know how to run a team. They’re good at league management but they’re not good at individual team marketing and operations, they’re not built for that. When they take over a team in mid-season that is the end of that franchise, it’s over, they’re dead meat. Any bills not paid are from the AFL, and in the case of Portland, it’s not Terry Emmert (who owes any money).

 

AF Insider:  The Union seems central to the league’s issues, I would like to return to that for a moment.  When the contract was first negotiated, Jeff Bouchy said he offered to open his books for the union to see and they refused?

Brady Nelson:  Yes.

 

AF Insider:  Also Bouchy said the league offered the union an opportunity to run their own team?

Brady Nelson:  I don’t know if that was offered in jest, but they didn’t have any interest in that. Fundamentally I did not view the people who were representing the players union as representing the players. The AFL is not meant to be a career. It’s not meant to be for players with families to make a living, that’s just not what it is. It simply doesn’t make sense economically. It doesn’t matter if the players are worth it or not, it’s just not in the budget.

 

AF Insider: You said your team was sold out for eight years in a row, I would assume that, in those days, the team was either profitable or at least not losing a lot of money.  Then the union came in and all that changed and it became unsustainable.  Was there anything aside from player salaries that was problematic?

Brady Nelson:  Ok, so player costs are tied to insurance, so it isn’t how much the guys make, it’s really about how much you’re paying in insurance. It’s an expense that you put down every year and it doesn’t get you anything. You still have to pay out of pocket for injuries, and medical costs are much higher than player salary. The salary stepped up every year or two and year five would have been the top.   I believe there’s a provision that if we couldn’t renegotiate then we’d continue at the year five rate.

 

AF Insider:  So there was a kind of option year baked into the contract to keep the league going while union negotiations continue?

Brady Nelson:  Fundamentally, I view the player’s interest differently from the union’s interest. When I refer to the union, I’m not referring to the players, I’m referring to the union management who is essentially treating this like a player agent. They receive a cut of the payroll and that is how they make their living. It’s not about the game and it’s certainly not about the players.

 

AF Insider:  There was no union at the beginning of the sport, but there was after the league emerged from bankruptcy, how did that come about?  

Brady Nelson:  To get the rights to collective bargaining all they needed to do was get the majority of the votes passed, not a majority of the players, just of the votes that were actually cast. There were entire teams with no votes for the union and no votes against it either.  There were no votes at all.  Team management wasn’t allowed to talk to the players about unionization.  We couldn’t explain to them that not voting was essentially a yes. In the end, I think the players unionized on thirty or forty votes total and that allowed the union managers to get paid.

 

AF Insider:  Tell me about the Cleveland walkout?

That was the push that ended the stalemate.  It’s what forced us (Bouchy, Nelson & John Pettite) to go out to Chicago and meet with union management. Cleveland already didn’t care about the AFL and we begged them to get a team and they did. That was like the first game they were going to view and it was a no-show and for the first time in AFL history, there was a game canceled. That potentially could’ve shut the entire league down.

 

AF Insider:  What precipitated the walk-out?

Brady Nelson:  Union management told the guys if you don’t show, then you’re going to get a certain amount of money through the new union deal. That was their right, and it was their leverage. The Orlando and Pittsburgh teams had a scheduled game and they were threatening to not play. We told the guys if you don’t want to play, don’t play, but we’re obligated financially. We have told our fans that we’re going to have a team, so we proactively replaced them and that caused the walkout.

 

AF Insider:  After the walkout, You, Jeff Bouchy, and Terry Emmert became involved.  You sat down with the union and what happened?

Brady Nelson:  The union was threatening the league and they were negotiating through the press.  They can do it, but the league can’t negotiate in public.  We couldn’t say what was being offered because that is considered to be against the law. There’s so much legalese when you’re talking about collective bargaining because it’s federal, and there’s the NLRB (National Labor Relations Board).  Trust me, they (the union) will file a million grievances. They’ll paper you to death. They really wanted their 3% (union dues) and they didn’t want to make it optional.  If you made an opt-in for the players to pay then nobody would pay because most of them hadn’t voted for the union. The players were all shocked when they saw they were paying union dues every week because they were not told that ahead of time. They really weren’t happy with us, but that’s what they wanted and it’s what they got. We told them in that meeting if you do this you’re going to have a much smaller piece of the pie to work with because teams were going to shut down. Just speaking from experience once we do this deal we knew the clock is ticking on our own franchise. We knew this was going to be unsustainable but we knew we couldn’t shut down today so we had to do the deal.

 

AF Insider:  If the teams that are left are in it for reasons other than running a profitable business, wouldn’t that make it harder on the less wealthy operators?  

Brady Nelson:  What I said earlier, there are three types of owners. One who run it as a business, ones who run it as a hobby, and the ones who run it as a tenant in their building. Those are three totally different priorities, and they create totally different results. The teams who dropped out of the AFL first were the teams operating as businesses. They had the highest attendance, and the highest sponsorship and They wanted to save our business.

 

AF Insider:  The fans have seen when leagues begin to lose teams it oftentimes sets off a domino effect.  As you seem to have predicted, the AFL began losing teams after the union agreement.  What happens to the rest of the teams as the dominoes began to fall?  

Brady Nelson:  In the AFL when a team shuts down, the rest of the teams inherit all their league bills and all their player injuries. With no one there to manage it, there’s no one there to dispute their claims. Those claims get spread out amongst the remaining teams. You can’t collect on the owner because the players are league employees so when they shut down you take that bill and divide it amongst all the teams.  That pushes someone else who can’t or doesn’t want to pay. After that you get a second team and then there are three teams and suddenly it becomes a race to get out.  We were forced into a collective bargaining deal, but the minute we signed it the clock began ticking on those of us running our teams like a business.  After that Iowa, left, we left, as did many others.  

 

AF Insider:  It doesn’t make sense that guys would essentially vote themselves out of work, yet that seems to be exactly what they’ve done.  

Brady Nelson:  When we were negotiating with the union we were trying to tell them what was sustainable on salaries but they had information from Arizona players saying they were getting paid by the franchise above and beyond the player’s contract.  I mean thousands of dollars more per player, per game.  It was no surprise they, and another team refused to join the union discussions.  They didn’t need to, they didn’t feel the same plight as the rest of us.  The union tried to ignite a very race-based campaign.  It was disgusting. Anyone around the AFL would hold them up as exhibit A and exhibit B as the beginning of the end. When we said we can’t afford it the union said, “oh yeah?  Look at Arizona.”  They are a hobbyist ownership group.  They’re fine with losing $2-3M.  That’s not sustainable for the rest of us.  All they care about is lifting trophies.

 

AF Insider:  Wow, that’s a pretty scathing indictment.  With the AFL now down to four teams, it appears to be heading towards indoor oblivion.  Meanwhile, the CIF and AAL are trying to reduce costs by keeping travel expenses down.  The IFL, where Arizona and Spokane landed after the AFL, once saw itself as equal to the AFL, and they’re now a regional league.  They to have adjusted their player cap downward to better suit the lower cost approach.  The NAL model is a little bit more expensive, but it’s adding new teams and attracting new fans.

Brady Nelson:  The smaller leagues seem to be able to find profitability, or at least not lose so much money.  However, you can’t have hobbyist owners because they’ll ruin your league. They have the most money, they’ll do anything to win, and that’s not good for people who are trying to run a business. You can’t have some owners abide by a certain set of rules and also have someone who’s willing to lose 2 or 3M every year. They’re going to spend whatever they want to win and that takes the incentive out of it for those who are trying to run it as a business. It’s a totally different mindset. If everyone was business focused it would work. If there are some hobbyist and some business, it won’t work. Everyone has to run it as a business or the league will fail.

 

AF Insider:  With what happened this offseason with Colorado, Spokane, Wichita Falls, Bloomington and West Michigan, that certainly seems to be what’s happening in the IFL.  That has to be the reason why they’re moving towards a more sustainable salary structure and regional approach.

Brady Nelson:  Keeping cost down is the number one thing. I personally believe that arena football is a local game. It’s not a national game. The people in Spokane didn’t care about Cleveland because they didn’t follow arena football on a national level. Other markets don’t either, they have no idea who’s even in the league. I don’t think that’s ever going to change.  The AFL wanted to be the fourth or fifth major league sport but that’s not what arena football is. It’s super exciting and fun in the arena game. It’s a great fan experience and if you keep it local it can thrive. If you try to make it everything to everyone it won’t work. There are too many costs so from a practical standpoint it simply doesn’t make sense on a national scale.

 

AF Insider:  The NFL is sustained by TV money.  The AFL had TV contracts and still failed.  Why is that?

Brady Nelson:  If you don’t already understand the game it doesn’t translate to tv. The sport is made for the arena, it’s not made for TV like the NFL. (Though it didn’t start out that way) The NFL is made for TV and arena football is the exact opposite.  When you’re in the arena when you go see it, it’s great, anything can happen!  Unlike the NFL, the rules force you to try and score and the game is never over because you don’t have the option of running out the clock. If you don’t gain any yards, you lose a down and the clock stops. You have to try and move the ball which can cause turnovers and I love it. You can score from everywhere.

 

AF Insider:  Tell me what you’ve got going on now?  

Brady Nelson:  I started Radiant Sports.  My company helps with sales, sponsorships, and marketing for sports franchises and my first three teams are in arena football which is how I met Gregg Fornario.

 

AF Insider:  He’s the owner of the Richmond Roughriders.  How are you helping them?

Brady Nelson:  I was trying to familiarize myself with the smaller leagues on the east coast and Richmond, I looked into the size of the market and demographics and realized it should be successful, that it should even be able to support an AFL team.  If you’re operating on an AAL budget you can do something in Richmond.  So I called them up and we agreed I could help them with their organization and we began working together.  I am helping them with marketing, and social media marketing, but they’re a second-year team and there’s a lot to do with a small staff.  Selling sponsorships, selling tickets, year one will be much smaller than years 2 & 3.  I’m trying to use AFL sponsorship experience and when you find something that works in one market you should be able to go to the same type of sponsor in another market and sell that sponsorship.

 

AF Insider:  One last question, do you think you’ll ever own an arena franchise again?

Brady Nelson:   The players’ side, the coaching, I’ve had my fill and essentially have no interest in it.  The football aspect of the business is the least important. It is your entertainment product, but anyone can do it. Anyone can put a team together. Anyone can find 20 people who want to play but if you don’t have money coming in it doesn’t matter how good you are because you don’t have any money coming in. Guys want to own a team, win and do business, but the business side is where they need help and that’s what I’m doing.