The AAF has been well received and looks like it has a shot at success as something to get sports fans through college basketball conference play and baseball spring training.
But as of a few days ago, it was already out of money. To make payroll, the AAF took a $250 million bailout from Carolina Hurricanes owner Tom Dundon, according to The Athletic.
By the sound of things, Dundon may have saved the league.
“Without a new, nine-figure investor, nobody is sure what would have happened,” an unnamed source told Glenn. “You can always tell people their checks are going to be a little late, but how many are going to show up on the weekend for games when they don’t see anything hit their bank accounts on Friday?”
Startup sports leagues always seem to be on shaky ground, financially. They’re a lot like freelance sports writers in that regard. But considering how well funded the AAF appeared to be, this is surprising. The league was co-founded by TV and film producer Charlie Ebersol and NFL executive Bill Polian. It got venture capital from a fund backed by Peter Thiel. It has TV deals with CBS, Turner and NFL Network. And it pays its players modestly, in the form of non-guaranteed three-year contracts worth $250,000.
It all looked pretty legit, and after an AAF game beat a Houston Rockets-Oklahoma City Thunder game head-to-head in ratings, the league’s biggest challenge appeared to be expansion, not survival.
Thanks to Dundon, who instantly was named AAF chairman, the league’s execution has been stayed indefinitely. But the emergency of the situation has to make you wonder how much commitment there really is to this thing.
Historically, payroll been a problem for upstart football leagues. As Jeff Pearlman/The Washington Post explained, owners in the USFL and World Football League didn’t have as much money as they acted like they did — some WFL teams ran out of cash before the first season was over.
The AAF seemed to be consciously avoiding the mistakes made by previous football leagues. But with all those people and corporations involved, how was it that the league began play without enough money on hand to pay players after the first week of games?
“The hope and belief now is that years from now, [the AAF] can look back and consider these some scary growing pains, because this league clearly has a chance to become incredibly successful,” a source told Glenn. “The opening weekend provided a lot of excitement and hope, even beyond the TV numbers. Obviously, though, the original plan did not include a financial crisis in Week 2.”