ESPN article on demise of AAF

Submitted by DoubleB on June 13th, 2019 at 3:32 PM

It's a long read but worth it if you're interested in the behind-the-scenes look at what was behind the demise of the AAF.

lostwages

June 13th, 2019 at 4:08 PM ^

FYI... this had been attempted multiple times before... wasn't there an off-shoot league back in the 70's or 80's briefly?

Still wish the XFL would have succeeded, enjoyed all of the drama. NFL is just half-ass everything, can't decide whether it wants to be taken seriously, or a clown show.

LSAClassOf2000

June 13th, 2019 at 4:23 PM ^

"Legendary Field Exhibitions, the AAF's parent company, listed the league's $11 million in assets against $48 million in liabilities. Its books and records were framed as a "best effort" in bankruptcy documents -- a final repudiation of any notion that the league's finances were ever buttoned up."

Yeesh. It would be interesting to see how ugly the entire financial picture was, but that number by itself is kind of jarring. 

DoubleB

June 13th, 2019 at 4:41 PM ^

Original financing came from a guy who is currently under indictment. Dundon came in and, with little understanding, bought into the league. Once he figured it out, he essentially pulled the plug.

At the end of the day, they were spending far too much money for what they were bringing in to have anything that could be termed viable. 

Ebersol comes off as clueless on how to run a business and Polian just comes off as naive--his experience from the NFL didn't translate to something from the ground up. 

The best part was the anecdote about drafting players in a manner like "The Voice." Probably captures both personalities about as well as anything.

Jmer

June 13th, 2019 at 5:03 PM ^

The important names of the article are:

Charlie Ebersol - Son of Dick Ebersol and founder of the league

Bill Polian - Co founder

Reggie Fowler - main investor

Tom Dundon - Second main investor after Reggie Fowler didn't come through.

In a race to beat the XFL, the AAF rushed to put a league together. They never came close to having the financial means necessary to run a football league. They should have folded before training camp but egos got involved and so they played half a season before they folded. They didn't even make payroll week 1. Charlie Ebersol, the founder of the league, to me, came off as an entitled asshole who wanted his hands in every single aspect of the league even though he had little to no experience running a $100 million business. He choose and sketchiest of investors in Reggie Fowler who promised $170 million that never came because his accounts were frozen by the US Government due to shady activity. Bill Polian, for a co founder, didn't have much power, but was unwilling to budge on the things he deemed important in the league, regardless of the cost. Tom Dundon made a really poor investment after the league was already doomed to fail. He did what he could to try and save it, then he pulled the plug.

The XFL will be the next attempt at a spring league in 2020. They have $500 million to throw at it and every game will be televised. It is still a long shot to make it long term.  

Tex_Ind_Blue

June 13th, 2019 at 4:46 PM ^

It looks like AAF failed for the same reason most businesses fail, money. They wanted to get in the game early. And they were not prepared at all. I admire Ebersol Jr.'s chutzpah, but a $100 Million plus business is not something one just jumps into. But I really hate (and pity him) it when he refuses to "look back" to learn from his mistakes. If he doesn't learn, it will be tough for his ventures to survive. 

McMahon is giving himself a better chance by being deliberate and diligent. At the end of the day though, it will be about quality of the product. If the play is good, they have a shot at survival. 

 

DoubleB

June 13th, 2019 at 5:12 PM ^

I didn't get the impression anyone thought the play on the field was the issue. As you stated, they just didn't have the financing to get this thing off the ground (and apparently Ebersol put his faith in a guy he shouldn't have) and as Dundon realized quickly once he committed, they were spending too much money on virtually everything.

The irony is that Ebersol talked up all his connections, but he couldn't get one VC firm in Silicon Valley (where I think he lives) to take a flyer on this thing for half a billion?

Tex_Ind_Blue

June 13th, 2019 at 6:42 PM ^

AAF seemed so much in red, the product on the field didn't matter. The XFL may have a chance to survive, if they stay with their plan. Put a great product on the field, keep the spend in check and see how things turn out. 

Valley VC funds have money, but no one is going to put $500 Million on a project cooked up in a year, without any revenue model, without any track record, would they? I do not know when do these Series A funds go in, but I am sure the business plans are scrutinized before a decision. 

DoubleB

June 13th, 2019 at 7:47 PM ^

The one thing I got out of Ebersol was that he was a good salesman/cheerleader for the league.

I think SV will jump on anything if they can get they can eventually get out profitably at the IPO level. But you bring up a good point. Usually when these things start out, it's not $500 million off the top (Series A). It builds to that point and starting a football league is much more capital intensive.

Tex_Ind_Blue

June 14th, 2019 at 5:44 PM ^

That's another point. Start small and then build it up. There have never been anything (I could be wrong) that started on a large scale and sustained itself at that scale or bigger. 

Year one. A small league, four teams in one state. Build the hype. Iron out the kinks. Keep expenses in check. Year two, expand. Year three ... Could it work? Don't know. It would be easier to sell though. *shruggs*

canzior

June 13th, 2019 at 5:24 PM ^

I don't know how much the "play" actually matters though.  With more social media now, getting college players that already have a following (from their alma maters fans) works to an extent, but you are building a league that relies on mostly college football fans following guys who were great at their school but didn't make it in the NFL(Denard Robinson), guys who watch any and all football (not many) and the person who is at home on a Saturday night in March with nothing else to do.  You'd probably need at least one of those groups to view the XFL as MUST-WATCH in order to have any staying power.  Can you build a league off of casual viewers?  The NBA Summer league and the G-league don't get great numbers.  

Goggles Paisano

June 13th, 2019 at 6:27 PM ^

Agree.  I don't need the read the article to know why it failed.  We all love football so much because of the football fast we go through each year.  We love the best of CFB and the NFL.  We don't want a watered-down product to fill the spring and summer.  I knew it would tank as soon as I heard about it and if another group tries to start another B-level football league, it will fail too.  There is no revenue without eyeballs - Just a bunch of dumb-ass rich dudes lighting their money on fire.  

Tex_Ind_Blue

June 13th, 2019 at 6:46 PM ^

I think the money would have come from somewhere else. The gambling app is the main selling point. Put the broadcast on time delay (very hard to do in these day and age, with in-stadium spectators having 4G cell connections) and let people from far away bet on plays. May be make it like a crowdsourced version of Madden 2020. You call. They play. 

I don't think any league/entity is depending on gate receipts. Gate receipts are a means to advertising dollars.