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Old 01-26-2020, 07:02 PM
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Alliance of American Football: What went wrong?


It's been almost a year since the AAF launched, and I have to wonder: What went wrong? Why didn't it even last a season?
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Old 01-26-2020, 07:09 PM
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It ran out of money. They clearly didn’t have a sustainable business plan. They couldn’t even pay the players’ salaries.
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Old 01-26-2020, 07:32 PM
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It's a little more complicated than that. But not a whole lot more complicated.

It is true the business plan wasn't workable. The NFL wasn't all that interested in a development league (no matter what some of them said) and didn't offer much support. The TV broadcast deals they were hoping for also didn't pan out, though they might have if the AAF had been around a little longer.

But also, there was never an intention to be profitable for at least a few years. The business plan depended on relying on the initial round of investors for those first few years until the league could be profitable. But the primary investor wasn't sound - the main investor was Reggie Fowler, who it turned out was deep in debt and unable to fulfill his commitments even before the first game. Now, a lot of this is on league executives - they shouldn't have launched without their due diligence on their investors and ensuring they had the funding lined up, but the plan wasn't totally insane if the venture capital was actually there in the first place.

It probably would have ended up being a slow death over several years but it wouldn't have been a disaster after less than 1 season.
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Old 01-26-2020, 07:34 PM
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We had a thread on the AAF when it was running last year, which I'm trying to find now.

IIRC, they realized, like one week into the season, that they had a serious cash issue, and they brought in a new investor (who wound up pretty much running the league from that point out). I'm still not sure exactly what went on there, but I think he decided, most of the way through the season, that he wasn't interested in burning through more money, and he shut it down suddenly.
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Old 01-26-2020, 07:39 PM
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It could have worked if they had saved up a big wad of cash first, as a hedge contingency fund, and operated off of that.
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Old 01-26-2020, 07:41 PM
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Originally Posted by CastletonSnob View Post
What went wrong? Why didn't it even last a season?
It was offering a product that very few people wanted, at a cost that couldn't be sustained for a full season. The market for low quality professional football outside of regular football season is exceedingly small.
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Old 01-26-2020, 07:46 PM
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Found the old thread:

https://boards.straightdope.com/sdmb...d.php?t=870490

Go to page 3 of the thread for posts that related to the league's sudden shutdown.

What I didn't remember until re-reading the thread was that one of their big selling points at the time was an app that let fans make real-time bets on player performance, which apparently never was really completed.

Also, I'd linked to an SI.com story in that thread about the shutdown. Quoting myself:

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Originally Posted by kenobi 65 View Post
While walking to the train from my office today, I saw a woman wearing a San Diego Fleet sweatshirt, and I thought to myself, "I have to believe that there'll be some behind-the-scenes journalism going on, about what went wrong with the AAF.

And, in fact, there's a long-form article on SI.com this week, by Conor Orr, on it. A few key bits:
- Tom Dundon apparently had no interest at all in the tracking / wagering smartphone app (which turned out to not have lived up to its initial promises before the plug was pulled).
- The AAF was forced to bring in Dundon when one of their initial investors, Reggie Fowler, wound up having his bank accounts frozen, when he was charged with bank fraud.
- When Dundon came on board, he forced Charlie Ebserol off of the league's board of directors.
- The league filed for Chapter 7 bankruptcy, "claiming some $11 million in assets against $48 million in liabilities. Cash on hand: $536,160.68."
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Old 01-26-2020, 07:48 PM
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And, quoting myself again from the old thread:

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Originally Posted by kenobi 65 View Post
Also, a paragraph I'd missed the first time I'd read through the SI article:

"It may have been due diligence on the television front, however, that eventually helped inform Dundon’s decision to shut it all down before his investment reached nine figures. According to a high-level sports exec from one of the four major networks, Dundon called to ask about the Alliance’s TV future. What he learned: While it wouldn’t necessarily always be this way, the AAF would have to continue paying to be on the air for the foreseeable future."

Read that one again: the AAF was on CBS, TNT, and the NFL Network, but they weren't making any money from that -- in fact, the league was apparently paying for that airtime. Doing so was clearly an investment in the league's future, by generating visibility and accessibility, but it was also clearly an expense that Dundon decided was too much to continue to bear.
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Old 01-26-2020, 07:51 PM
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And that's what the surprise was. The AAF did a great job convincing everyone they were on solid ground; they were very upfront that they expected to lose money the first few seasons, and had planned for it. Except, of course, that their founders, Charlie Ebersol and Bill Polian, were standing on quicksand and didn't know it until too late.

Their Hail Mary pass was to Tom Dundon, who sank tens of millions into the league and then swiftly decided to shut it down. It was rumored at the time that he did this to get the AAF's proprietary app software, but apparently that wasn't true and anyway it made no sense. It is apparently more true than Dundon was dissatisfied with the lack of progress in getting the NFL to allow some of its practice squad / lesser players to play in the AAF. I guess the NFL wanted to take its time, but Dundon wanted it done yesterday and they told him to go to hell. I don't really get what the rush would have been - they were halfway through the first season so what difference would it really have made in 2019? But that's the story.

The part of the story that, so far as I am aware, no one has ever answered is why Dundon would pour money into the league and then promptly give up. One source said the league at dissolution was almost completely broke; if true, that would literally mean Tom Dundon spent tens of millions of dollars to get controlling interest in a business that he basically did no due diligence on whatsoever, which would be truly a stunning thing to have happened.

I strongly recommend reading the SI article about it, which suggests the AAF was never sincerely a sports league, but that it was more of a slimy Silicon Valley startup seeking to leverage football to make something of that app, and that it never quite worked out.

https://www.si.com/nfl/2019/05/01/al...sol-tom-dundon
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Old 01-26-2020, 08:07 PM
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It's a really dumb idea to compete with the NFL the NFL has tons of money and many die hard fans. The AFL did it in the 60s before the NFL got so powerful.
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Old 01-26-2020, 08:17 PM
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It's a really dumb idea to compete with the NFL the NFL has tons of money and many die hard fans. The AFL did it in the 60s before the NFL got so powerful.
I think that the AAF had three hopes:
- To get a formal arrangement with the NFL to serve as a developmental league (didn't happen, and the NFL wouldn't let the AAF use players who were on NFL rosters, even those who were on practice squads)
- To build interest in (and sales of) their gambling app (which apparently wasn't ready in time)
- To provide rabid football fans with football content during the off-season (they drew well in some markets, but pretty poorly in others)
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Old 01-26-2020, 09:08 PM
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- To provide rabid football fans with football content during the off-season (they drew well in some markets, but pretty poorly in others)
Oh this describes someone I know very well and who is reading over my shoulder. There's market there. Enough market? Dunno.
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Old 01-26-2020, 09:20 PM
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Oh this describes someone I know very well and who is reading over my shoulder. There's market there. Enough market? Dunno.
The AAF (and other, earlier spring football leagues) had recognized that there's a "hole" in the sports calendar in February. Relatively speaking, there's not much after the Super Bowl, until you get to the NCAA basketball tournament and MLB spring training in March -- February is when the NBA and NHL are dragging along in their seemingly-endless regular seasons.

So, the AAF started their own season the week after the Super Bowl, to get as much exposure as they could during that "sports lull," hoping to keep the fans they attracted in February over the course of the rest of their season. Of course, it could be (and was) argued that, that soon after the Super Bowl, football fans might be a little burned out. And, while there are undoubtedly a lot of football fans who really only care about football, I suspect that many football fans are *also* fans of other sports, and that their attention gets pulled away in March and April.

Last edited by kenobi 65; 01-26-2020 at 09:22 PM.
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Old 01-26-2020, 10:30 PM
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I saw a commercial today for the XFL starting after the SB. I'm holding out for the new USFL.
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Old 01-26-2020, 10:33 PM
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Originally Posted by kenobi 65 View Post
The AAF (and other, earlier spring football leagues) had recognized that there's a "hole" in the sports calendar in February. Relatively speaking, there's not much after the Super Bowl, until you get to the NCAA basketball tournament and MLB spring training in March -- February is when the NBA and NHL are dragging along in their seemingly-endless regular seasons.

So, the AAF started their own season the week after the Super Bowl, to get as much exposure as they could during that "sports lull," hoping to keep the fans they attracted in February over the course of the rest of their season. Of course, it could be (and was) argued that, that soon after the Super Bowl, football fans might be a little burned out. And, while there are undoubtedly a lot of football fans who really only care about football, I suspect that many football fans are *also* fans of other sports, and that their attention gets pulled away in March and April.
Yeah, I think after 20 weeks of NFL football, it was bad timing for AAF football right after the Super Bowl. They should have run it in the spring-summer time. (With all indoors stadiums, or nighttime games, to cope with the heat)
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Old 01-27-2020, 12:40 PM
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Yeah, I think after 20 weeks of NFL football, it was bad timing for AAF football right after the Super Bowl. They should have run it in the spring-summer time. (With all indoors stadiums, or nighttime games, to cope with the heat)
I'd have put it in an April-June season format so that they're the also-ran to baseball, not encroaching on pro football, and as a de-facto developmental league, their players would be in condition (hopefully) when NFL training camp starts. It would be done well before the All-Star Break in major league baseball. The only thing it would compete with would be the NBA finals.

Plus, that timing would put it at just about the center of the NFL/college offseason, giving hardcore football fans something to satisfy their cravings at the point most distant from "real" football.
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