I don't think the acquisition was a block. The Rock has about 7 movies he's committed to, plus the TV show and whatever his production/endorsement deals amount to. Based on the current "activity" (or lack thereof) surrounding the XFL, I can't see at least him (and then perhaps by some extention DG/RedBird) having both the time and inclination to create a from scratch start up, as much for the money aspect as well as just the time it would entail.
With 20/20 hindsight based on what intel we have, I think they approached this like most other private equity firms - they were buying a distressed/undervalued business, and thought they could put some minimal investment into it and either watch it grow exponentially, or "flip," it for a profit (either by selling it outright, or by decentralizing and selling off the individual franchises. It seems like they either misread the marketplace and thought as a live sports provider they could get a reasonable deal with at least one of the big players, or thought that Johnson's presence in the endeavor (I'm sure he can probably get a lot of films or TV shows made just based on his involvement) would somehow be the same in the sports rights marketplace and got a rude awakening.