NHL Owner Rescues The AAF With Much Needed Cash

[MikeMitchell]

The Athletic is reporting that NHL Owner Tom Dundon is going to be named as the AAF’s new lead chairman on Tuesday. The AAF nearly missed payroll for week 2. Dundon is rushing in to save the league. Committing 250 million dollars to keep the league afloat.

Here is an excerpt from the article.

According to sources, there was one enormous problem, one that became obvious even before the AAF’s second weekend (Feb. 16-17) of games: The league was running short on cash, and quickly. Without new investors, there was a good chance it was going to miss payroll last Friday.

“Without a new, nine-figure investor, nobody is sure what would have happened,” one source said. “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?”

On Tuesday, multiple sources told The Athletic, the AAF will announce that Carolina Hurricanes majority owner Tom Dundon, a self-made billionaire from Dallas, has become that nine-figure investor. Dundon will be introduced as the league’s new chairman after last week’s commitment of $250 million enabled the AAF to meet its obligations.

Dundon will continue in his role as owner of the Hurricanes.

“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,” one source said. “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

[Joker]

I don't understand how you can have a business plan that doesn't cover contingency for all expenses past the second week of operation? Does this have anything to do with the lack of broadcast revenue? The lack of fans in the seats?

Second, 250 million is a big chunk of change. It should last a while. But if the league is bleeding cash that bad it won't last forever.

[XFL_FAN]

When Albright said that the XFL had 9 times more cash than the AAF, I thought it was an exaggeration. Obviously he was right until now. 250 million can last for a bit, but if the AAF can't start making money, Vince McMahon and Oliver Luck are going to find a way to beat out the AAF. 500 million is supposed to last 3 years for the XFL. Let's say 250 lasts 1.5 years. Next year they will need another investment, especially if they can't make money off their TV deal. The AAF is a mess right now...

[MikeMitchell]

Update from Pro Football Talk on payroll issue.

[And there were indeed payroll issues. An agent who represents multiple AAF players alerted PFT on Friday that some paychecks weren’t received. The AAF attributed the delay to an administrative glitch./b]

[MikeMitchell]

When Albright said that the XFL had 9 times more cash than the AAF, I thought it was an exaggeration. Obviously he was right until now. 250 million can last for a bit, but if the AAF can't start making money, Vince McMahon and Oliver Luck are going to find a way to beat out the AAF. 500 million is supposed to last 3 years for the XFL. Let's say 250 lasts 1.5 years. Next year they will need another investment, especially if they can't make money off their TV deal. The AAF is a mess right now...

The question now is how much power will Tom Dundon have? Will he now run the league? Obviously you don’t invest 250 million without thinking that you can make the league profitable. Whether that entails a renewed financial focus on marketing/advertising, securing a tv rights deal or getting the NFL to buy in.

Most people don’t realize how much these leagues cost to run and operate. They think it’s like basketball and baseball. It costs hundreds of millions of dollars just to launch and then run and operate a league.

Remember Oliver Luck’s line about Vince McMahon’s initially reported 100 million dollar investment. “It won’t even get you to the 20 yard line”.

[MikeMitchell]

I don't understand how you can have a business plan that doesn't cover contingency for all expenses past the second week of operation? Does this have anything to do with the lack of broadcast revenue? The lack of fans in the seats?

Second, 250 million is a big chunk of change. It should last a while. But if the league is bleeding cash that bad it won't last forever.

When Oliver Luck was first appointed the CEO and commissioner of the XFL. Media members asked him about McMahon’s 100 million dollar investment. Luck revealed that Vince would be investing a lot more than that. Luck said that the 100 million wouldn’t even get the XFL to the 20 yard line. That’s when Forbes and other found out that McMahon would be investing over 500 million dollars.

The AAF ran out of funds fast. They have virtually no revenue. You can’t survive without tv money, especially with the amount of money, they are spending on technology alone. Their 3 hour infomercial on CBS paid off. They didn’t get the NFL to buy in yet but they got themselves a 250 million dollar investment. That will get them to year two most likely. That’s not guaranteed. The league has to show profits at some point from somewhere. It’s currently not from attendance, merchandising, gambling, fantasy or television.

[XFL_FAN]

I don't understand how you can have a business plan that doesn't cover contingency for all expenses past the second week of operation? Does this have anything to do with the lack of broadcast revenue? The lack of fans in the seats?

Second, 250 million is a big chunk of change. It should last a while. But if the league is bleeding cash that bad it won't last forever.

When Oliver Luck was first appointed the CEO and commissioner of the XFL. Media members asked him about McMahon’s 100 million dollar investment. Luck revealed that Vince would be investing a lot more than that. Luck said that the 100 million wouldn’t even get the XFL to the 20 yard line. That’s when Forbes and other found out that McMahon would be investing over 500 million dollars.

The AAF ran out of funds fast. They have virtually no revenue. You can’t survive without tv money, especially with the amount of money, they are spending on technology alone. Their 3 hour infomercial on CBS paid off. They didn’t get the NFL to buy in yet but they got themselves a 250 million dollar investment. That will get them to year two most likely. That’s not guaranteed. The league has to show profits at some point from somewhere. It’s currently not from attendance, merchandising, gambling, fantasy or television.

And this is why the XFL picked major markets. This is also why the AAF is thinking about expanding to NY. So they can get some TV money. The AAF will also have to add more commercials if they want to get more money into their league. They have already made major mistakes already that will most likely be their funeral.

[MikeSherman]

Holy shit. No wonder they were lying about Week 2 attendance -- they were trying to close Dundon.

The AAF's problems extend beyond cash, and even if it did, $250 million commitment does not equal $250 in cash right now. Hopefully they can finish the season and the investors can sell off what they can, but they're not taking the field in 2020.

People can shit on XFL 2001 all they want, but they paid all their bills. They even honored their multi-year contracts after the league shut down.

[Andibald]

https://twitter.com/darrenrovell/status ... 7035115521

Darren Rovell
✔
@darrenrovell
BREAKING: After week one, the new football league, the AAF, essentially sold off the entire league to Carolina Hurricanes owner Tom Dundon. Dundon puts in $250 million.

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8:49 AM - Feb 19, 2019

[MikeMitchell]

Holy shit. No wonder they were lying about Week 2 attendance -- they were trying to close Dundon.

The AAF's problems extend beyond cash, and even if it did, $250 million commitment does not equal $250 in cash right now. Hopefully they can finish the season and the investors can sell off what they can, but they're not taking the field in 2020.

People can shit on XFL 2001 all they want, but they paid all their bills. They even honored their multi-year contracts after the league shut down.

Exactly. People forget about that. The league lost money in year one but they were supposed to. All upstarts lose money. They could have had a season two. McMahon was owed 50 million dollars from NBC for year two but he never made them pay it. Obviously losing big sponsors and being leveraged by their tv partners killed the league. You never ever hear any issues of McMahon not holding up his end of a financial deal. His checks are never late.