AAF founder: Finances were in place, primary investor didn't come through
The Alliance of American Football will go down in history as a brief blip on the sports radar, and a blueprint in how to not start up a new sports league.
There still is a lingering question of what exactly went wrong. The AAF said it wanted to go about things the right away, and its opening weekend was a success. Then by the second week there were stories about not being able to meet payroll, and the league had to reach out for a new investor. That ended up being the beginning of the end.
From the outside looking in it seemed outrageous that a league could be so unprepared financially that it needed a bailout by Week 2 of the season. Charlie Ebersol, one of the founders of the league, has been mostly quiet, but told Sports Business Journal that it’s not exactly what it seems.
What went wrong with the AAF?
Ebersol talked to John Ourand of SBJ, and among the excerpts of a story set to publish Thursday was a quote that puts a different spin on the AAF’s financial failures. He said the league thought it had a sound financial footing going into its inaugural season, but he blamed a primary investor for not living up to agreements.
“We raised over $170 million in the second quarter of last year,” Ebersol told Ourand of SBJ. “We ultimately raised well over $200 million before the launch of the football league. When it became clear that our primary investor was either not able to, or not performing in line with the signed contracts which had been vetted by multiple banks, ... we went out to the market after the success of the first weekend and offered to let other people buy in. Ultimately Tom made an offer to buy in."
That would be Tom Dundon, the owner of the NHL’s Carolina Hurricanes. Dundon promised up to $250 million when the league had financial issues, due to Ebersol’s claim that an original and unnamed primary investor didn’t come through, and Dundon became the league’s chairman of its board of directors. For whatever reason, Dundon pulled the plug fairly quickly, complaining that the NFLPA wouldn’t allow the AAF to use some players and be the NFL’s developmental league.
"I know everyone has conspiracy theories,” Ebersol told SBJ. “But, unfortunately, this may have just died because the main investor and the founders had different visions of what the company was supposed to be. ... Our long-term vision for building something slowly and getting enterprise value was not aligned with [Dundon’s] vision of how he saw the league.”
AAF’s legacy is not a good one
The AAF is still a curiosity. It came and went so fast, which was shocking after what seemed like a sound plan and a very positive first week.
Ebersol also addressed to Ourand stories that players were stuck with hotel bills (“The hotels were paid,” he said) or that injured players were paying for their own rehab (“We have the necessary insurance, so all the players are covered,” he said). He also said that reports of Dundon investing just to get AAF gambling app technology was “asinine and not true.”
It’s a story of a good business idea that went totally wrong. We’re still unpacking how the AAF failed so spectacularly, which will unfortunately be the long-lasting legacy of the short-lived league.
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Frank Schwab is a writer for Yahoo Sports. Have a tip? Email him at shutdown.corner@yahoo.com or follow him on Twitter! Follow @YahooSchwab
