What had happened was
I will openly admit to you, I have not been following the AAF. So when the news broke yesterday, it came as a shock to me what had happened. I knew the league had some financial complications, but I didn’t know the extent of it. I wanted to know what happened…what I learned….the aaf rabbit hole goes deeper than we think.
Just 10 days into its inaugural season, the Alliance of American Football was facing a shutdown. Tom Dundon, owner of NHL hockey team Carolina Hurricanes and Investor in the AAF, dropped a reported $250 million cash into the league to keep it afloat. It has since been reported that Tom Dundon has been financing the league on a week to week basis. The total amount spent by Dundon over the past 6 weeks according to reports is $70 million. Tom Dundon became the chairman of the AAF on the day he committed to keep the league running….as the great Sean Dottius Carter once said, "Everybody's bosses till its time to pay for the office… till the invoices separate the men, from the boys." And so thus, he became the boss, and the boss makes the final decision.
So what happened??
"…If you want to test a man's character, give him Power." Abraham Lincoln. Quickly after Dundon became chairman, Founders of the AAF Charlie Ebersol and Bill Polian (NFL hall of fame inductee in 2015 for his role as GM of Bills and Colts) saw the approach was going to be different with Dundon as the man in charge. According to reports, Polian and Ebersol had a plan, after a minimum of 3 years, to start using the AAF as essentially a minor league for the NFL….Chairman Tom Dundon was not exactly pleased or patient with the plan. Dundon thought by folding the AAF he would create leverage with the NFLPA. Dundon also demanded to be a flexible system between NFL practice squad players and AAF rosters. The current NFL Collective bargaining agreement would not allow this or several other of what Dundon demanded. In my personal opinion, I do not believe the NFL and NFLPA will stress too much about the AAF during their negotiations for a new Collective Bargaining Agreement. It will be interesting to see if it is mentioned at all, however.
The Orlando appolos were facing a workman’s compensation issue due to a law which doesn’t recognize professional athletes as an employee. Now routinely insurance companies are willing to take on teams like the Dolphins and the Heat, and even the Marlins, but the AAF didn’t have that type of pull. So the Appolos had to cross the Florida-Georgia line and hold 51 percent of their practices in Georgia in order for their policy to remain in effect. Further, multiple reports surfaced citing the AAF was making players pay for their own travel expense. Yikes.
Aside from the players, vendors working with the league also got shortended financially. Dundon’s response, according to multiple reports, was he is not responsible. Dunn said that tab belongs to the original lead investor, Robert Fowler. Fowler lost his seat at the head of the table when Dundon made his investment. It has still not been decided who is going to pay the vendors, but if this gets to court it would make one hell of a Netflix Miniseries.
Shark Eat Shark world. Biggest Shark Bites Biggest
Charlie Ebersol and Tom Dunon are no strangers to controversy in the business world. If you’ve ever seen the Italian Job, then you know how Napster was “invented." Well that’s precisely what Robert Vanech is claiming. Vanech says he “dreamt” of the idea and the two men shook hands on it, however, according to Vanech, Ebersol stole the idea after a meeting with XFL owner Vince McMahon. As for Dundon, how he made his riches is frowned upon to say the least. Tom Dundon started off as a used car salesman and it didn’t take long for him to understand there’s more profit in financing used cards than selling them. Dundon specifically targeted people with bad credit and loaned out cars with interest rates as high as 29 percent!!! Dundon sold his company to Santander Bank in 2006 and resigned from the company in 2015 after the company started facing major scrutiny….although he resigned he certainly did not lose….the company he founded in 1992 had made him fortunes and in November of 2017 his cash out from the company was a handsome 713 million dollars.
So What Now?
In Conlusion the AAF did not shut down due to a financial issue. Some people question the intentions of Tom Dundon in the AAF. The feeling around the league was Dundon only wanted control for the gambling app.
This company was seemingly doomed from jump. Selfish agendas gave birth to this company....and it killed it. The company's two biggest investors had no problem making their fortunes off vulnerable people, and some people don't change. Ebersol was a shark, Dundon was the bigger shark. While Ebersol had invested about 28 million dollars into the league, Tom Dundon came along and flexed 250 million dollars....."they say that money talks, tell these other boys speak up." Now Bill Polian was on ESPN radio and had nothing but good things to say about Tom Dundon, politics as usual by Bill. However in his initial staement Bill said the understanding was they were gonna finish the season no matter what and Tom Dundon was aware of that before he made his commitment. In essence, he "took his ball and went home." Bill Polian believed the AAF was approaching a big weekend with a big game on CBS in primetime ahead of the NCAA Final Four. He felt a breakthrough was approaching. I am not an expert at operating a billion dollar company just yet, however certain things are common sense. There is no denying Dundon is a smart man, according to Polian he was a fresh of breath air and a man who understood analytics. I do not believe Dundon was upset with the timetable. I believe he knew the business was doomed and he saw an opportunity with the gambling app and seized it. As far as the AAF's future, Bill Polian said as far as he knows if they were to start it again it would essentially have to be from scratch. Translation: The AAF is no more.