Death of the Alliance of American Football

[dfwabel]

7 minutes ago, GDAWG said:

Dean Blandino and Mike Pereira were involved in the AAF?  Did they serve as rules analysts? 

They were in charge of officiating, but day-to-day operations was done by Steve Strimling, a Referee in the Pac-12

[dfwabel]

Quote

Of the creditors named in the filing, the following are owed more than $1 million:

MGM: $7,000,000

CBS: $5,190,153

swirl | mcgarrybowen: $2,275,602.29

Morgan, Lewis, & Blockius: $2,413,773.57

Aramark Sports: $1,831,648

Arizona State: $1,237,793.82

 

swirl/McGarryBowen is the ad agency

Morgan, Lewis, & Blockius is a law firm.

 

Quote

Embassy Suites San Antonio Landmark: $439,838.52

The Emily Morgan Hotel: $324,416.29

Courtyard By Marriott Atlanta Alpharetta: $184,854.09

Hilton Phoenix Mesa Hotel: $170,437.89

 

The first two are San Antonio training camp hotels.  The other two are Legends and Hotshots local housing bills.

 

Credit: Front Office Sports

[dfwabel]

Not a good look Charlie

 

 

[dfwabel]

Charlie spoke to SBJ/SBD's John Ourand today.

 

Quote

On why the league failed: "I know everyone has conspiracy theories. But, unfortunately, this may have just died because the main investor and the founders had different visions of what the company was supposed to be. ... Our long-term vision for building something slowly and getting enterprise value was not aligned with [Tom Dundon’s] vision of how he saw the league.”

 

On accusations that he misrepresented the league’s financing: “We raised over $170 million in the second quarter of last year. We ultimately raised well over $200 million before the launch of the football league. When it became clear that our primary investor was either not able to, or not performing in line with the signed contracts which had been vetted by multiple banks, ... we went out to the market after the success of the first weekend and offered to let other people buy in. Ultimately Tom made an offer to buy in."

 

[Gothamite]

9 hours ago, dfwabel said:

Not a good look Charlie

 

 

 

But let’s hear again how Dundon is the only bad guy in this story.

[MJWalker45]

36 minutes ago, Gothamite said:

 

But let’s hear again how Dundon is the only bad guy in this story.

Dundon is the easiest to point the finger at because he took over everything then pulled the plug. But Ebersol has proved to be less credible the more we find out about his operations. And it looks like he couldn't admit he needed to delay kicking off until he had all the money he needed. 

[Gothamite]

The more details we get, the clearer it becomes that the league was run by incompetents, liars, and scam artists from the beginning.  Nobody looks good.

[The_Admiral]

Dundon also gets more blame because he made his fortune in the disgraceful field of subprime auto loans whereas Ebersol appears to be a bumbling failson. Both guys are despicable, but it's not hard to see why one of the two breeds more contempt.

[Ferdinand Cesarano]

Hold on, now.

It appears that Ebersol's claim of having the league funded was based upon promises made by another investor who eventually went back on his pledge after the whole thing was announced. That's not a lie or a scam on Ebersol's part. The people who lied were Dundon and the original investor Reggie Fowler.  (And whether Ebersol was paid any money this week is neither here nor there.)

 

 

 

 

[raysox]

If anyone is interested....

AAF stuff on Dick's website are half off

https://www.dickssportinggoods.com/c/shop-by-alliance-team

[dfwabel]

45 minutes ago, Ferdinand Cesarano said:

Hold on, now.

It appears that Ebersol's claim of having the league funded was based upon promises made by another investor who eventually went back on his pledge after the whole thing was announced. That's not a lie or a scam on Ebersol's part. The people who lied were Dundon and the original investor Reggie Fowler.  (And whether Ebersol was paid any money this week is neither here nor there.)

 

 

 

 

Wait?!? What?

Maybe Fowler saw how his millions, and he did invest millions, was being missued and stopped. Hell, we know Dundon did. This wasn't free f'n money, venture capital money is a loan!  Dundon pulled the term sheet because he could be and Ebersol's words never matched the books. It's called "cash burn" and that's all on Charlie Ebersol. Putting the teams up in the hotels they did clearly didn't help. The Apollo's, before switching to Georgia, were in the be downtown Orlando Marriott...why?

 

As I said two weeks ago, Ebersol seems to have paid every person within the business and not for the services.  The training camp hotels, venues and be caterers were stiffed. Part of that stuff was likely billed weekly, so even with Net 30 billing, they were past due before Dundon.

[Ferdinand Cesarano]

17 minutes ago, dfwabel said:

Maybe Fowler saw how his millions, and he did invest millions, was being missued and stopped.

 

First of all, paying the salaries of players and coaches does not constitute a "misuse" of funds.

But, yes, Fowler evidently disliked what he saw and pulled out.  The point, however, is that this does not mean that Ebersol's early pronouncements about the league's funding were lies, as those comments were true when he made them.

Anyway, if Fowler was expecting a profit right away, he was living in fantasy land. Any reasonable investor in a new league has to be prepared to lose money for years before the league can be profitable.

[dfwabel]

10 hours ago, Ferdinand Cesarano said:

 

First of all, paying the salaries of players and coaches does not constitute a "misuse" of funds.

But, yes, Fowler evidently disliked what he saw and pulled out.  The point, however, is that this does not mean that Ebersol's early pronouncements about the league's funding were lies, as those comments were true when he made them.

Anyway, if Fowler was expecting a profit right away, he was living in fantasy land. Any reasonable investor in a new league has to be prepared to lose money for years before the league can be profitable.

Thus my edit to mention "burn rate".

Crunchbase only had them with $17M in funding through the first half of 2018. Then Ebersol, in subsequent interviews, tries to point out that in Q2 he was able to raise 10x that amount?!? Really?

 

https://www.crunchbase.com/organization/alliance-of-american-football/

 

The insurance issues in January were the initial tell of their inability to finance this.  They held training camps w/o paying anyone!

 

[DG_ThenNowForever]

4 hours ago, raysox said:

If anyone is interested....

AAF stuff on Dick's website are half off

https://www.dickssportinggoods.com/c/shop-by-alliance-team

 

This is a really lovely hat:

 

[monkeypower]

I really would not mind some sort of AAF merchandise just to have some. Like in a few years, it could be akin to somebody wearing OG XFL gear today.

 

But Dick's doesn't ship outside of the States, so I'm SOL.

[Wings]

4 hours ago, raysox said:

If anyone is interested....

AAF stuff on Dick's website are half off

https://www.dickssportinggoods.com/c/shop-by-alliance-team

 

That stuff should be at 75% not 50%. 

[MJWalker45]

17 minutes ago, Wings said:

 

That stuff should be at 75% not 50%. 

Dicks upped the price on coolers though, at least in store in San Antonio

[dfwabel]

SBJ/SBD's Daniel Kaplan spoke with XTRA San Diego sports radio.

 

It starts at the ~22:00 mark and unless you really appreciate old school hokie, sports radio, you'll skip to the interview mark. Note that one of the co-hosts was part of the Fleet's radio broadcast. The interview goes to the 31:00 mark and the rest of the hour has the host talk about the AAF, their soon to be launched podcast on the AAF.

[dfwabel]

Another Charlie Ebersol interview, this one with CBSsports.com.

 

I am going to post two of the questions and his answers (bolded by me):

Quote

CBSSPORTS.COM: So then if you raise capital investments and have more than $200 million at the start of the year, per the interview with the SBJ, where does that money go?

 

EBERSOL: Let me clarify. We spent less than $30 million getting to kickoff. We didn't overspend and run out of money. We were not able to get access to the capital. Oftentimes in fundraisers that are this big -- high eight-figure, nine-figure raising -- the money is put into an account that you have access to and you draw down from because the cost of taking that much money out of circulation to an investor or a fund is too big for them to park it when we didn't need all that money. Like, we weren't going to spend $200 million on Feb. 9 [when the season began]. We were going to spend $200 million over the course of two-and-a-half years. 

So the money would be made available to us through a facility, which had been set up over six months and vetted by and run through by multiple banks, both in the U.S. and international. Everything was signed off on and agreed to in contracts. The board signed off on it. Most of my major investors had access to all the information. A lot of my partners had access to the information. All of my GMs and head coaches met with my primary investor during January and had a chance to talk to him and understand the financing.  

What happened was -- really in the weeks leading up to the first game -- we started getting nervous about issues that were popping up with access to the capital. There were draw-down issues, a variety of different things that started happening that were preventing us from getting access to the capital. The money was on an as-needed basis so we could draw down. When that started happening we weren't in immediate trouble, but we knew we were going to have to find another protective source. 

2

You spent less because you weren't paying your damn bills!

 

Quote

CBSSPORTS.COM: What role did unpaid vendors and liabilities play into Dundon's decision to halt operations? Did he feel like his money was going out the door? 

 

EBERSOL: You'd have to ask Tom. I understand Tom has complete authority to do what he did. I don't understand why he did it and neither does Bill [Polian, AAF Head of Football]. The conversation about liabilities, vendors, etc.: the natural course of business is that there is a delay between when something happens and when someone gets paid. By this point in the year, you're paying on a 60-day or a 90-day pay period. The decision was made by the board [Dundon] not to pay vendors looking backward. 

 

Honestly, I am not sure where he does business, but most of the vendors I deal with only bill Net-30 with Net-60 being very rare.  Net-90? GTFO, Chuck.

 

He has other comments which talk about banks and financing which you can read about at the link above. 

[FiddySicks]

On 4/18/2019 at 7:18 AM, Gothamite said:

The more details we get, the clearer it becomes that the league was run by incompetents, liars, and scam artists from the beginning.  Nobody looks good.

 

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