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AAF to Suspend Football Operations

Well, so much for that. Tom Dundon invested $250 million in funding into the league, but has apparently decided that the league doesn't have the $20 million it needs to get to the end of its first season. So yet another one of these spring leagues either a) doesn't have the patience to build over a period of multiple years and/or b) completely misread the research it did on financial viability. You're up next, XFL.

Comments

11 comments, Last at 05 Apr 2019, 10:11pm

1 Re: AAF to Suspend Football Operations

by Mike B. In Va // Apr 02, 2019 - 2:09pm

Damn. They were actually getting watchable, too.

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2 Re: AAF to Suspend Football Operations

by Pat // Apr 02, 2019 - 4:40pm

I'm shocked. Shocked, I tell you. Who could've possibly guessed that a league that was probably burning through about 5 times the amount of cash it pulled in from gates would fold. It's hard to imagine how Charlie Ebersol's "this isn't a sports league, it's a gambling tech startup" plan failed.

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3 Re: AAF to Suspend Football Operations

by Jerry // Apr 03, 2019 - 8:00am

I've seen it suggested that the gambling technology was Dundon's real interest, and once he got his hands on it, he was ready to pull the plug.

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4 Re: AAF to Suspend Football Operations

by Scott P. // Apr 03, 2019 - 9:49am

So, a grift. I guess 80% of the US economy nowadays is based on grifting, so we really shouldn't be surprised.

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5 Re: AAF to Suspend Football Operations

by Pat // Apr 03, 2019 - 2:10pm

Yeah, obviously. I'm sure the only reason that he kept the league going was to demonstrate to people the robustness of the setup, plus I also wouldn't be surprised if there was a clause in the contract for how long things had to keep going. However it's extremely unlikely that Ebersol and Polian included sole ownership of the intellectual property of the league in the deal. Controlling interest in the league means you can dictate how the company is run, including when it shuts down, but it doesn't mean you suddenly own everything.

But I've also seen people say that he only ended up losing $70M, which given that there are far fewer weeks left in the season than since he invested implies that the burn rate of the league was accelerating if the "need $20M more" claim is also correct (funding 24 games with $70M = $3M cost/game, whereas if he needed $200M for the remaining 11 games = $18M cost/game). That wouldn't be terribly surprising if, for instance, sponsors who were initially in declined to continue.

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6 Re: AAF to Suspend Football Operations

by Ajoe.Smith // Apr 04, 2019 - 5:35am

Gambling tech, grift, robustness of the setup?

1. Start a business
2. Demonstrate viability of related product/service.
3. Close business, sell related product/service.

I am afraid I do not quite understand.
Where would the grift come in?

Can someone point me to an article from a reliable source, please?

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8 Re: AAF to Suspend Football Operations

by justanothersteve // Apr 04, 2019 - 4:32pm

The app was already developed by the time Dundon invested into the league. Albert Breer of MMQB posted on Twitter that Dundon got exactly what he wanted then pulled his support for the AAF. Dundon didn't start the AAF. He was an investor who came in pretending to be interested in giving the AAF a financial boost.

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9 Re: AAF to Suspend Football Operations

by Ajoe.Smith // Apr 04, 2019 - 5:57pm

Thanks for the links.

A free blueprint for temporarily embarassed billionaires.

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11 Re: AAF to Suspend Football Operations

by Sixknots // Apr 05, 2019 - 10:11pm

Or maybe Polion and Ebersol promoted the tech thing to get investors and Dundon jumped in and then figured out that the tech payoff wasn't that good and pulled the plug rather than throw good money after bad.

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7 Re: AAF to Suspend Football Operations

by Theo // Apr 04, 2019 - 1:54pm

How can you spend so much time and energy in a league only to have it shut down mid-operation by an outside investor.
Polian and Ebersol will be looking back and scratch their heads.
Hope Vince will be smarter.

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10 Re: AAF to Suspend Football Operations

by Mike B. In Va // Apr 05, 2019 - 2:44pm

History finds that unlikely...

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