Abandoned by its lead investor, the Alliance of American Football to suspend operations
With its majority stakeholder having decided to take his ball and go home, the Alliance of American Football is suspending operations just 25 days before its inaugural championship game.
Carolina Hurricanes owner Tom Dundon, who in February pledged to invest $250 million in the upstart spring football league, is pulling out of his commitment after paying out some $70 million. In refusing to release any further funds to the AAF, Dundon effectively made it impossible for the league to continue past the eighth week of its inaugural season.
While a formal announcement is expected to be made this afternoon, league insiders have confirmed the suspension. Dundon did not respond to a request for comment.
The shuttering of the AAF leaves CBS and two cable networks with a fair chunk of airtime to fill in the coming weeks. Two weeks ago, CBS announced that it would program the April 6 Memphis-San Antonio game as the lead-in to its coverage of college basketball's Final Four. That's a worthy piece of real estate; in 2017, CBS's broadcast of the early hoops semifinal (Gonzaga-South Carolina) drew 14.7 million viewers and an 8.5 household rating.
CBS will also miss out on hosting the early AAF playoff game on Sunday, April 21, and what would have been the league's first-ever title showdown on Saturday, April 27. The erasure of these future broadcasts won't have much of a financial impact on CBS; AAF ad inventory is limited to around 14 national split-screen spots per game, or well shy of the 85 full-screen units that air over the course of a typical NFL broadcast.
Also scrambling to fill a few upcoming hours of airtime are TNT, which had signed on to carry the second AAF playoff tilt, and NFL Network, which will punt away its last four scheduled regular-season telecasts.
The de facto owner of the AAF, Dundon swooped in with his investment proposition after the league's very first round of games. And while he initially seemed to be on the same page with AAF co-founders Charlie Ebersol and Bill Polian, it soon became apparent that Dundon had his own ideas about how the startup should be run.
Ebersol and Polian had always thought of the AAF as a tech startup, an entity to be built from the ground up that would require as much as $300 million in seed money as it developed. The partners looked to grow the league organically, letting it get its legs underneath it for as many as three seasons before taking the next step and becoming a farm system of sorts for the NFL. For Dundon, that approach wasn't fast enough, and his impatience to turn the AAF into a feeder system for football's dominant league appeared to be at odds with the NFL's own interests.
More specifically, Dundon looked to create a system that would allow NFL practice squad members and many of its more unseasoned players to participate in AAF games. Dundon's insistence upon establishing a more open exchange of talent between the two leagues flew in the face of the NFL's collective bargaining agreement, and when the Players Union rejected his overtures, he threatened to pull his investment in the AAF.
"If the [NFL] Players Union is not going to give us young players, we can't be a development league," Dundon told USA Today last week. "We are looking at our options, one of which is discontinuing the league." If this was meant to be a negotiating tactic, it was a truly bizarre one, given that neither Dundon nor the AAF enjoyed any leverage over the hegemonic National Football League. (Nobody does.)
Sources on Tuesday said another $20 million would be sufficient for the AAF to continue on through the championship game, although no formal bailout offers have been tendered. The status of the league's tech investments remains up in the air.
After kicking off last month on CBS to a national audience of 3.25 million viewers and notching a 1.9 household rating—deliveries which topped ABC's live NBA coverage on the same night—the AAF averaged a respectable 425,000 viewers and a 0.2 household rating on NFL Network and TNT. Given the light commercial load associated with AAF productions, CBS wasn't offering advertisers in the championship game the standard ratings guarantees; that said, the broadcast was expected to put up higher numbers than the Feb. 9 opener.
Dundon's apparent decision to effictively shutter the AAF leaves 416 players and thousands of fans holding the short end of the stick, although ticket holders in Orlando must be particularly aggrieved by the sudden turn of events. Steve Spurriers' Apollos had amassed a dominant 7-1 record on the season, and were the prohibitive favorites to win the first AAF title.
If nothing else, the AAF's premature demise gives Vince McMahon that much less to worry about as he plans his revival of the XFL. The wrestling magnate last week sold 3.2 million shares of his WWE stock, pocketing just under $272 million and ensuring that his efforts won't be forestalled by an outside investor with an itchy trigger finger.