Dundon: AAF Could Fold without NFLPA Support

[GindyDraws]

Majority investor: Alliance of American Football in danger of being discontinued without NFLPA help

The first-year Alliance of American Football's inability to secure cooperation from the NFL Players' Association to use young players from NFL rosters has put the AAF in danger of folding, Tom Dundon, the league's majority owner, told USA TODAY Sports on Wednesday.

"If the players union is not going to give us young players, we can't be a development league," said Dundon, who invested $250 million into the league in February. "We are looking at our options, one of which is discontinuing the league."

The NFLPA had no official response to the accusations that their lack of cooperation is prompting the AAF to fold.

However, a players' union official did express serious concerns about the risks of lending active NFL players to the AAF. The official requested anonymity because of the sensitive nature of the issue.

The person said the players' union is founded on the belief that using active NFL players and practice squad members for the AAF would violate the terms of the CBA and the restrictions that prevent teams from holding mandatory workouts and practices throughout the offseason. The limitations set in place are designed to ensure the safety and adequate rest and recovery time for football players. But there’s a concern that teams would abuse their power and pehaps force young players into AAF action as a condition for consideration for NFL roster spots in the fall.
The additional concern on the NFLPA’s part is that if an NFL player played in the AAF and suffered serious injury, that player would face the risk of missing an NFL season and lose a year of accrued experience, which carries financial ramifications for players.

Dundon said he is considering all options and expects to make a decision about the league's future over the next two days.

The AAF was hoping to get permission to use practice squad players, particularly No. 3 quarterbacks and young linemen starting next season. The AAF's game plan was to be to the NFL what Class AAA baseball is to Major League Baseball.

In a statement announcing his financial investment, Dundon said he was "impressed with The Alliance's stunning growth in-stadium and across TV, mobile and social media in just these first few weeks."

Dundon, who also owns the NHL's Carolina Hurricanes, said the NFLPA's primary objection was not wanting their young players "to feel pressure to play" in the AAF.

The AAF is in Week 8 of its 10-week season.

Can't say I'm surprised about this news.

Click to read more...

 

[CandyCanes]

Dang that investment has went sour extremely quickly. I wonder if they do decide to fold, how much Dundon gets back on his $250M. No way all that money has been spent already.

That said, the NFL really could use a developmental league.

 

[Anton Dubinchuk]

So wait... This guy invested $250 million dollars less than 2 months ago. And now they're legit having discussions about folding the league?

 

[RodTheBawd]

How do you drop that type of cash when your plan is basically "I hope they let us use the players"? Dude must be laundering drug money or something .

 

[Boom Boom Apathy]

So wait... This guy invested $250 million dollars less than 2 months ago. And now they're legit having discussions about folding the league?

I'm guessing the $250M isn't what it seems. He probably invested a small amount to keep it going, with a commitment to much, much more, but contingent upon certain things (such as NFLPA support). This is probably him negotiating through the public and giving himself an out before he has to pay too much.

 

[Anton Dubinchuk]

How do you drop that type of cash when your plan is basically "I hope they let us use the players"? Dude must be laundering drug money or something .

"Folding" is different than going bankrupt. He'd still get a pay-out of the company's assets according to his equity, which is probably the majority of his initial investment as it's probably still just sitting somewhere in an account (that is, if it really was an upfront investment and not an option-based agreement like BBA mentioned).

 

[Negan4Coach]

So wait... This guy invested $250 million dollars less than 2 months ago. And now they're legit having discussions about folding the league?

Whomp Whomp

I guess making money off sports isn't as easy/lucrative as ripping off people with shitty credit for car loans.

What a ridiculous idea- why would you invest in an idea that has been tried several times before and failed utterly?

 

[Svechhammer]

If the AAFL can't make it, the XFL is probably dead on arrival

 

[GindyDraws]

If the AAFL can't make it, the XFL is probably dead on arrival

As I cited on the main thread in the Fugu Memorial Business section, the XFL exists solely to cater to the demographic who oppose the NFL purely on a political level, not on a competitive level, and therefore would reject any offering the NFL may give them. Sure, they could get better TV deals than what the AAF had, what with the WWE ties, but again, it's those same WWE ties that helped killed the original XFL. And, the landscape of television is much different in 2019-2020 than it was in 2001.

From an attendance perspective, only three of the AAF teams (San Antonio, Orlando, and San Diego) average above 15,000, although Birmingham has had decent support, with one of their home games skewering their average below the 15,000 median. If the AAF survives to a second season, Arizona and Salt Lake are either going to fold or relocate, as attendance and marketing have not helped them out at all, with Salt Lake being the worst (doesn't help that originally 4 of their 5 home games were on the PPV-like B/R Live, further isolating the team from their home market), as both are below 10,000.

 

[MinJaBen]

That said, the NFL really could use a developmental league.

That’s what the NCAA is. And it’s free. Why would the NFL want to risk guys they already pay and risk money they don’t have to to make this work when they are already so successful?

 

[Chrispy]

As I cited on the main thread in the Fugu Memorial Business section, the XFL exists solely to cater to the demographic who oppose the NFL purely on a political level, not on a competitive level, and therefore would reject any offering the NFL may give them. Sure, they could get better TV deals than what the AAF had, what with the WWE ties, but again, it's those same WWE ties that helped killed the original XFL. And, the landscape of television is much different in 2019-2020 than it was in 2001.

From an attendance perspective, only three of the AAF teams (San Antonio, Orlando, and San Diego) average above 15,000, although Birmingham has had decent support, with one of their home games skewering their average below the 15,000 median. If the AAF survives to a second season, Arizona and Salt Lake are either going to fold or relocate, as attendance and marketing have not helped them out at all, with Salt Lake being the worst (doesn't help that originally 4 of their 5 home games were on the PPV-like B/R Live, further isolating the team from their home market), as both are below 10,000.

Playing in Arizona in February and March never made sense to me. Then again, neither does Orlando but they are making it work. In both cases you're competing directly with MLB spring training that the locals are used to having every year. But Florida does have a much larger HS football base to attract to off-season football.

If this continues, I wonder if Dundon would push to relocate one of those teams to Raleigh.

 

[Drivebytrucker]

I don't think Dundon wrote the AAF a 250 million dollar cheque. I'm sure he's a little more careful with his money than that..

That's why rich people have lawyers

It was probably contingent on them meeting lots of stipulations

 

[Chrispy]

"Folding" is different than going bankrupt. He'd still get a pay-out of the company's assets according to his equity, which is probably the majority of his initial investment as it's probably still just sitting somewhere in an account (that is, if it really was an upfront investment and not an option-based agreement like BBA mentioned).

I'm sure the chairman of the AAF will determine how those investments are paid back out to the investors.

Remind me, who's the chairman of the AAF again?

 

[Svechhammer]

I don't think Dundon wrote the AAF a 250 million dollar cheque.

He didn't. I remember when Adam & Joe had him on later that day/week after that news broke and he made it clear the purchase was basically setting money aside for the league to use, and not an outright investment at that moment.

He always knew this thing could go tits up quickly, and he hedged his investment on that.

 

[Canes]

I think it was pretty obvious league interest would fizzle out after the novelty wore off. Didn't think it would be quite this fast though.

I just don't think a football league will ever work basically right after NFL/NCAA football season ends. People have already had their football fix and are ready to move on to traditional spring time activities/sports. I don't think the NFLPA or NFL can help them with this. Like I said before, I think the only chance they have is mid-to-late summer before preseason NFL starts (so they can capitalize on fans waiting for football to start) or during regular football season on weekdays. But even then that's no slam dunk either.

 

[TheBigKahuna]

He did NOT drop 250 up front. That's been made clear in several stories and outlets already.

 

[Finnish Jerk Train]

I wonder if playing in the spring was the wrong idea. I get the logic behind it, but if the ultimate goal is to be the NFL's minor league, it should mirror the NFL's schedule. There's a reason they do it that way in every other minor league in every other sport. You can't have guys go out there and get themselves beat up all spring to try and earn a spot on a major league roster, take a month or two off, then expect them to go through the rigors of the NFL season. They'd be dropping like flies by Week 6. It's no wonder the union is not cooperating.

As for the money, there's no way TD is taking a $250m haircut on this. We knew this thing was a financial train wreck and that this was a very real possibility. Rich people don't get rich by being that reckless. He hasn't risked any more than he's willing to lose.

 

[GindyDraws]

AAF may not make it beyond this weekend

Dundon might just cancel the rest of the season, make it World Football League on all us bitches!

 

[RodTheBawd]

He did NOT drop 250 up front. That's been made clear in several stories and outlets already.

As well as this very thread. Thanks for the clarification.

 

[Navin R Slavin]

I heard that Dundon is going to lose his entire $250 investment -- but I'm pretty sure he can afford it.

 

[NotOpie]

I heard that Dundon is going to lose his entire $250 investment -- but I'm pretty sure he can afford it.

I heard it was a buck, two ninety-eight.

 

[Legionnaire11]

Y'all need to read deeper. This turned out to be Dundon bluffing to pressure the NFLPA into an agreement ahead of the XFL starting up.

His investment is also incremental, it's "up to" $250M, but he can pull out whenever he wants without reaching that amount.

Attendance and ratings have improved four weeks in a row, despite March Madness going on. They are adding new sponsors every week. And they have Jerry Jones in their corner which is big, he even got AAF to move their championship game to his new stadium.

From what I have read, most of the league personnel are unhappy that Dundon used this tactic though, and I agree with them. Look at the headline and how everyone here (casual/non-fans) have reacted. This bluff may turn into more truth just by killing off any immediate growth from casuals who now see no reason to invest their interest and viewing time.

 

[Legionnaire11]

AAF Future Not in Jeopardy - Last Word on Pro Football

 

[VaCaps Fan]

The canes should get the 250 million instead.

 

[Navin R Slavin]

The canes should get the 250 million instead.

There's no way the Canes investment turns into a billion, and there's a good chance that a football league does.