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The AAF nearly ran out of money before its second week, per report

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A $250 million investment kept the fledgling league afloat.

AAF: Atlanta Legends at San Diego Fleet Orlando Ramirez-USA TODAY Sports

The Alliance of American Football burst onto the scene with better than expected television ratings on Feb. 9. One week later it ran into a familiar problem for non-NFL pro football leagues — it was reportedly out of money.

The AAF nearly went the way of the USFL, XFL, UFL, and most of the AFL after only one week of play, according to The Athletic’s David Glenn. A last-minute investment from Carolina Hurricanes CEO Tom Dundon kept the league afloat; his $250 million infusion made sure no one missed any game checks heading into Week 2.

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

That didn’t fix the league’s Week 1 problem, however. The AAF missed payroll after its four-game debut, leaving players without a paycheck for up to 10 days after their opening day performance.

An AAF spokesman denied reports the league was in danger of failing to make payroll at any point.

Why invest in the AAF?

The league’s big opening weekend drew more than three million viewers to a pair of matchups that featured the debuts of the Orlando Apollos, Atlanta Legends, San Diego Fleet, and San Antonio Commanders. That was enough to convince Dundon the AAF was a worthy investment. In exchange for his nine-figure buy-in, the billionaire was named the chairman of the league’s board of directors.

“This was a terrific opportunity for Tom to expand his investment in the sports world,” Hurricanes president and general manager Don Waddell told the press in a statement. ”The AAF is off to an exciting start as a league and was founded on some truly unique and groundbreaking concepts.

”Tom is excited about the direction of the Carolina Hurricanes and remains fully committed to this franchise’s current and future success in Raleigh.”

Dundon’s investment goes beyond just an on-field product. The AAF’s decision to embrace gambling has led it to develop technology aimed at transforming sports gambling by offering a wide array of in-game, real time bets to viewers. This innovation is something that can be scaled up to other leagues — particularly the NFL — as more and more states legalize sports betting. Jumping on board with the AAF gives Dundon come control over that expansion and licensing, though how much is unclear.

Why might the AAF succeed where other leagues have failed?

The first week of AAF action earned plenty of buzz, thanks to a combination of innovative rules and exciting, sometimes sloppy play.

Unlike several other startup spring leagues, the AAF is operating with the NFL’s blessing, earning a broadcast spot on league partner CBS and even earning a weekend spot on the NFL Network. There are familiar faces throughout the Alliance’s sidelines, including coaches like Steve Spurrier and Mike Martz and players like Trent Richardson, Zac Stacy, Charles Johnson, and, for better or worse, Christian Hackenberg.

The end result is a familiar, but skewed, product, like watching a preseason NFL contest or going to a playoff game after drinking a whole bottle of NyQuil. But the season’s first two weeks have drawn bigger crowds than expected, provided a launching point for some big performances, and earned plenty of real estate across social media. That helped convince Dundon to pour a quarter billion into the league, and now he’ll have the chance to shape it in his image as president of the AAF’s board.