The AAF’s dramatic collapse, explained

The AAF arrived with excitement, fanfare, and hope. Less than two months later, operations were suspended and a shutdown of the entire league is imminent. The drama played out with anger, backbiting, and pointed fingers. Was the league poised to break out before having its knees cut out from under it, or was the league swallowed up in a billionaire’s scheme to get his hands on some gambling technology?

Many questions are left unanswered in the wake of the AAF’s rapid collapse, but it’s unquestionable that the move caused a lot of pain for a great many people. Players, coaches, officials, and league employees uprooted their lives with the promise of an ideal of an alternate football league, only to have those hopes dashed 60 days later. Now we’ll do our best to make sense of how things went so badly, and why the league is dead.

How it all began.

Influential TV producer Charlie Ebersol (son of former NBC Sports head Dick Ebersol) formed the idea for the AAF in 2016 after working on ESPN’s 30-for-30 documentary on the collapse of the XFL. In researching and producing the documentary, Ebersol came to the conclusion that the concept for a secondary football league was viable in the US, but the XFL’s on-field product and presentation was its downfall. Feeling he could correct the XFL’s errors, Ebersol planned out how the AAF would operate for a launch in 2019.

During those early planning stages Vince McMahon, chairman and CEO of WWE, announced he would be re-launching the XFL, starting in 2020. Initially Ebersol approached McMahon in the hopes of parlaying his idea for the AAF with McMahon’s vision, but ultimately the sides didn’t reach an agreement — which included Ebersol wanting ownership of the XFL brand.

Ebersol continued work on his concept for a football league, and it wasn’t until 2018 that the public heard more information about the AAF. Ebersol secured the services of renowned household names and football minds, including Bill Polian, Troy Polamalu, Hines Ward, J.K. McKay, and Justin Tuck. He followed this up by announcing Steve Spurrier would be the league’s first head coach, lending more credence to the idea that the AAF was a league in its own right, not the machination of a TV producer.

Ebersol explained how he saw the AAF fitting in when he spoke to SBNation.com in February:

“If you’re a player who wants to play in the NFL, another league comes along, you look at that league as an opportunity to show your skills off and get back in the big show. The problem is, if they screw with the game, which all these people have done, you can’t get back in the NFL because if you’re playing in the CFL or another league like that, and NFL’s looking at that the game, it’s so wildly different.”

On Feb. 9, 2019 the league launched and things were wonderful ... for a week.

The AAF gets bailed out.

Signs of trouble emerged in the AAF’s second week with reports that the league was in severe financial trouble. ESPN’s Darren Rovell reported the league missed payroll in its inaugural week, which was initially claimed to be a “glitch” by AAF officials, before news dropped that the league was on the verge of collapse unless an investor stepped in and propped up the organization.

One major issue was that Reggie Fowler, slated to be a $170 million investor in the AAF pulled back, committing only $28 million to the league and leaving the AAF in a lurch.

How was a league in this much trouble, this quickly, considering its early ratings were promising and people were excited? NFL insider Benjamin Allbright said on the radio show Pushing The Odds that the AAF wasn’t making any money off its broadcasts, no matter how many people were tuning in. Part of its partnership with CBS called for the AAF to provide CBS with programming, free of charge, for the first year. This was designed to be a proof of concept, engendering goodwill with broadcasters in the hopes of cashing in for the second season. This ensured the AAF would get plenty of exposure, but did nothing to actually keep the league afloat.

It’s here where billionaire Tom Dundon enters the picture. Dundon, owner of the Carolina Hurricanes, made his fortune off subprime car loans, before parlaying that into a 55 percent purchase of “TopGolf,” which marries sport and technology. Dundon came through as the AAF’s bailout, committing a reported $250 million to ensure operations could continue, but in reality only gave $70 million to the AAF and was operating on a weekly basis. The result of this investment was that Dundon became chairman of the board — and had full control of its future.

Initially, it seemed like the league would survive as a result of the investment, but it wasn’t long before things went bad again.

A plea to the NFLPA.

It’s here where things get muddy. It appears that Polian and Dundon had differing views about how the league should position itself moving forward. Polian saw the AAF as a potential feeder league for the NFL — giving undrafted and cut players an opportunity to showcase their talents in the hopes of returning to the NFL.

Rovell explained the differing opinion:

“Ebersol and Polian’s plan was to develop the league for three years on its own before becoming a feeder system to the NFL. Dundon, however, wanted to create that minor league relationship immediately and sought to use the leverage of folding the AAF to get a deal with the NFL Players Association to better insure a flow between leagues.”

USA Today reported that Ebersol and Polian’s plan had reached a point where they were having informal discussions with the NFL, but nothing had been cemented. Executives believed it would always be a 2-3 year plan to become a minor league for the NFL.

Dundon, on the other hand, wanted to secure a talent-sharing agreement with the NFL immediately. This would allow signed NFL players to compete in the AAF during their offseason. Reports indicate Dundon was so adamant about the NFL supplying the AAF with players that he indicated he could fold the league without an agreement, but the problem was that any kind of deal like Dundon proposed went against the collective bargaining agreement signed by the NFL and NFLPA in 2011.

Players can’t simply be asked to play in another league, and that’s before talking about injury risks. Essentially Dundon wanted NFL players to play in his league, away from their teams, doctors, strength and conditioning staff — allegedly delivering a quick-turnaround ultimatum on an issue that would take months for the NFL and NFLPA to agree upon, assuming they saw value in working with the AAF in the first place. Especially considering they had a CBA negotiation looming.

The end of the AAF.

Reports emerged less than a week after Dundon floated the idea of dissolving the league that the AAF would cease operations at 5 p.m. on April 2. Players and coaches learned of the decision mid-practice, weeks removed from the playoffs and a championship game slated for a primetime slot on CBS, which would have turned more eyes to the league than ever before.

Polian issued a statement prior to Dundon’s announcement blaming the chairman for dissolving the league.

“I am extremely disappointed to learn Tom Dundon has decided to suspend all football operations of the Alliance of American Football,” Polian said. “When Mr. Dundon took over, it was the belief of my co-founder, Charlie Ebersol, and myself that we would finish the season, pay our creditors, and make the necessary adjustments to move forward in a manner that made economic sense for all.”

Then, at 5 p.m. Dundon made a statement to AAF players announcing the league would cease operations. No press release was made public, and the AAF’s own website took days to mention the league dissolving.

New information has emerged about the league’s finances in the wake of bankruptcy filings, and it shows that the AAF ceased operations while massively in the red.

However, it’s unclear what role Dundon is playing in the proceeding, as his name did not appear on the bankruptcy filing itself.

Why did this need to happen?

Currently there’s no good answer, other than money. It’s unclear why Dundon felt the issue needed to be forced with the NFL just a year out from the league needing to negotiate a new CBA with the NFLPA. Trying to play hardball with the NFL at a time its hands were tied seemed misguided, at best.

There’s an alternate timeline here where the AAF could have continued its operations until the NFL/NFLPA negotiations and attempted to be added to the CBA as a viable play alternative to young players, securing Dundon’s long-term goal, instead of pushing for it early.

However, there’s speculation that none of this was really about football. One of the AAF’s most valuable assets was proprietary gambling software the league had built into its app. This combination of real-time fantasy football paired with sports gambling had attractive potential, especially at a time where more states are legalizing sports gambling. Some believe that Dundon’s interest in the AAF was only to secure the technology behind the gambling app.

Reports indicated that Dundon did not actually own the technology, and court proceedings bore that out. He did not challenge the software’s sale to MGM in the midst of bankruptcy hearings. The app was purchased for the relatively low sum of $125,000 in August. MGM also reduced its bankruptcy claim against the shuttered league from $7 million to $5 million with the sale.

It’s important not to forget the human toll of this situation.

It’s easy to look at the AAF as a curiosity, or laugh at its failure — but the reality is that dozens of athletes, coaches, and employees relied on the AAF for their livelihood. Even if the league was mismanaged the people associated with the league didn’t deserve to have the rug pulled out from under them like this.

Players went from preparing for a game one day, to being kicked out of their hotel rooms and stranded.

Things reached a point where players weren’t even fed before games. It was on them to find their own food, using a per diem to cover their costs.

Employees were sent a cold email notifying them that their employment had been terminated.

Charles James II, cornerback for the Memphis Express is used to being forced to make changes over the course of his football career — but the collapse of the AAF hit him hard.

“A lot of these guys are younger guys who had never been through this process,” James said. “I’ve never been in the process of a league ending, but I’ve been cut before. Seven times. I’m used to picking up and being in another place. But this is too fast, too soon. We’re talking about relationships, memories, all that — gone.”

Other players just wanted to know about their healthcare and paychecks.

“Questions immediately shifted to how long their health insurance would last, and whether they’d just received a final paycheck. Some coaches simply sent their teams home.”

Numerous entities are out in the cold as a result of the AAF’s problems. UCF lost $1 million it was promised for hosting Orlando Apollos games. Vendors in San Antonio are owed $4 million, and it’s unclear if they’ll ever see a cent. The ripples of the league’s collapse extend far beyond those directly employed or playing for the league. It’s impacting lives everywhere.

Now, players are in limbo. Shortly after the NFL reportedly released a memo barring teams from signing former AAF players due to the league’s legal problems, the AAF announced that its players were free to sign with NFL teams.

It didn’t take long for players to be signed, with more than 40 players getting signed within a week of the AAF’s demise. That includes:

• Carolina Panthers: defensive tackle T.J. Barnes, center Parker Collins, tight end Thomas Duarte, offensive tackle Brandon Greene, guard Kitt O’Brien, receiver Rashad Ross
• Chicago Bears: kicker Elliott Fry
• Cleveland Browns: quarterback Garrett Gilbert
• Dallas Cowboys: defensive end Shakir Soto
• Denver Broncos: cornerback De’Vante Bausby
• Jacksonville Jaguars: defensive back Cody Brown
• Kansas City Chiefs: cornerback Keith Reaser
• Los Angeles Rams: quarterback John Wolford
• Miami Dolphins: guard Michael Dunn, linebacker Jayrone Elliott, running back Kenneth Farrow, linebacker Tyrone Holmes, wide receiver Reece Horn, tackle Jaryd Jones-Smith, defensive tackle Joey Mbu
• Minnesota Vikings: safety Jordan Martin, linebacker Greer Martini, defensive end Karter Schult, safety Derron Smith, cornerback Duke Thomas
• New York Giants: defensive back Henre’ Toliver
• New York Jets: quarterback Brandon Silvers
• Oakland Raiders: defensive end Alex Barrett, wide receiver Demornay Pierson-El
• Philadelphia Eagles: wide receiver Charles Johnson, quarterback Luis Perez
• Pittsburgh Steelers: defensive tackle Winston Craig, center J.C. Hassenauer, linebacker JT Jones, cornerback Kameron Kelly, defensive back Jack Tocho
• San Francisco 49ers: offensive lineman Daniel Brunskill, defensive lineman Damontre Moore
• Tampa Bay Buccaneers: safety Orion Stewart
• Tennessee Titans: tight end Keith Towbridge, quarterback Logan Woodside
• Washington: linebacker Andrew Ankrah, linebacker DeMarquis Gates, guard Salesi Uhatafe

It appears only the NFL is open to signing these players, however — leaving the CFL out of the loop, albeit with some dubious contract language from a league that no longer exists.

On Wednesday, April 17 the AAF issued a statement that the league was effectively dead following bankruptcy proceedings.

Financial documents regarding the league showed that when the AAF ceased operations they had $48.3 million in liabilities, and just under $12 million in total cash and assets. Court filings show that Charlie Ebersol was listed as part of the bankruptcy, but not Tom Dundon — whose organization did not provide information.

A deep dive into the league’s operations by ESPN detailed how the AAF operated in chaos. Dundon, Ebersol and Polian rarely saw eye to eye on any of the league’s operations, and the entire process of it dissolving was a mess.

The players involved might not agree with every element of the story, but there seems to be a few consistent threads: Ebersol was desperate to make the league work. Polian was convinced an agreement could be reached with the NFL on player sharing. Dundon knew almost nothing about the business he was getting into.

The one element that jumps out is just how abrupt and cruel the final day of the AAF was. Ebersol and Polian only learned that the league would be suspended the same morning it was finally shuttered, and when they asked Dundon’s office for clarification they learned that everyone would be fired at 5 p.m. Not simply an announcement that the league would end operations, but everyone would be out of a job.

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There were laudable things the AAF attempted to do that would have changed football for the better. It tried to provide opportunities to overlooked players. It gave them healthcare. The league brought innovation and integrated fans into the experience in a way the NFL has never done. The early returns showed that these were influential enough to have the NFL considering some innovations, with variations appearing at the NFL owner’s meeting in March.

In the end, the story of the AAF might not be one of a league full of promise that flew too close to the sun, and instead the tale of a billionaire destroying a league to get some software. Nobody is better off for the AAF dying, and it’s all a shame.