AAF may fold

cuda.1973

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Dec 6, 2009
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Not going to say where I spent all of my career, when I had a real job, but..................

We lost hundreds of millions, for many years, before we turned a profit. Turned into a really big deal. (What killed it was when the guy who started it passed away, the 2 schmucks he lined up to be his replacement ran it into the ground in record time.)

Three years is not an unrealistic model.
 

TexasTider

BamaNation Citizen
Mar 6, 2004
47
19
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So do you know the most reliable way to ID the posters you should not necessarily listen to in a thread? Find the ones that not only mis-spell the name of the parties of interest - but at best they get phonetically close. Condon sounds like Dundon. This tells me someone has been listening to a lot of talking heads and has read very little about the actual events. Believe me I think Tom Dundon is a slimeball from the get go. Just check out his history and where he made all his money. But it's difficult to try to to have a legit discussion if I don't even know who you are talking about. :)
 

81usaf92

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So do you know the most reliable way to ID the posters you should not necessarily listen to in a thread? Find the ones that not only mis-spell the name of the parties of interest - but at best they get phonetically close. Condon sounds like Dundon. This tells me someone has been listening to a lot of talking heads and has read very little about the actual events. Believe me I think Tom Dundon is a slimeball from the get go. Just check out his history and where he made all his money. But it's difficult to try to to have a legit discussion if I don't even know who you are talking about. :)
Just FTR a pretty prominent figure on this site did call Dundon “Condon” about 6-7 posts above you so it might not be smart to infer that posters using that name for Dundon are incapable of having an intelligent conversation.
 

KrAzY3

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The AAF wasn't a tech startup (I know there was some tech involved, but I'm not even sure they can retain those rights now that it's in bankruptcy and owes tens of millions, property tends to be auctioned off to pay the debt), they weren't doing something new or perfecting some sort of product that requires years of investment. This was still football, plain old football. The market was already there, they product was already there.

I do know something about entertainment, and organizing events, and that sort of thing and you don't sit down and do a plan that says well after three years of doing shows we'll stop losing money! That's not how the entertainment industry works, and this is an entertainment product ultimately. The fans dictate your success. You get good engagement it's successful you don't and it's a failure. Sure there are some sunk costs, but clearly they were not meeting the expectations of either sets of investors.

Two different set of investors pulled the plug. Occam's razor isn't that hard to apply here. It was failing.

One betting site paid out all the bets for the league as winners. It was ten grand total, ten grand! For a league that supposedly was going to monetize betting! That's spectacularly low engagement. The same site paid out Alabama as winners, and guess what? They paid out around 400,000. I'd have backed out of my investment to once I saw numbers that abysmal.

Apologies for the spelling though, I was lazy and copied a previous poster. Anyway, I'm not saying semi-pro football success is impossible, there is the CFL after all, but it's really, really, really hard and a lot of rich and brilliant men have tried and failed. I just don't see the AAF as being sabotaged so much as it failed to do some things crucial to their success.
 
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81usaf92

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The AAF wasn't a tech startup, they weren't inventing something new, or perfecting some sort of product that requires years of investment. It was football, plain old football. I do know something about entertainment, and organizing events, and that sort of thing and you don't set down and do a plan that says well after three years of doing shows we'll be profitable! That's not how the entertainment industry works, and this is an entertainment product ultimately. Sure there are some sunk costs, but clearly they were not meeting the expectations of either sets of investors.

Two different set of investors pulled the plug. Occam's razor isn't that hard to apply here. It was failing.

One betting site paid out all the bets for the league as winners. It was ten grand total, ten grand! For a league that supposedly was going to monetize betting! That's spectacularly low engagement. The same site paid out Alabama as winners, and guess what? They paid out around 400,000. I'd have backed out of my investment to once I saw numbers that abysmal.

Apologies for the spelling though, I was lazy and copied a previous poster. Anyway, I'm not saying semi-pro football success is impossible, there is the CFL after all, but it's really, really, really hard and a lot of rich and brilliant men have tried and failed. I just don't see the AAF as being sabotaged so much as it failed to do some things crucial to their success.
The problem with the CFL is that their contracts over the last 5 years have restricted movement to the NFL. They are basically trying to prevent very talented players from doing 1 and done contracts. That’s the major reason Johnny Manziel jumped ship to the AAF. The CFL is probably done once an American League succeeds.

Ftr this is the only part I’m willing to discuss at this point because I think we both have said our main points over and over so much we might as well copy and paste the original posts. If you and Big (or whoever) wants to have that debate again then have at it. I just am willing to dispute the CFL at this point.
 
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KrAzY3

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The problem with the CFL is that their contracts over the last 5 years have restricted movement to the NFL. They are basically trying to prevent very talented players from doing 1 and done contracts. That’s the major reason Johnny Manziel jumped ship to the AAF. The CFL is probably done once an American League succeeds.
I have a habit of making a post and then looking at it and deciding it was a mess and editing it and then looking at it and going it's still a mess and giving up... anyway.

I think the biggest thing the CFL has going for it is they don't have regional competition from (US based) college football or the NFL. They tried moving into the US once and failed, but they did co-exist fairly well with all the previous semi-professional leagues. They have deep roots, which has allowed them to survive all the previous leagues. They might lose talent, but if they can keep the fans I'm not sure how much what happens in the US will matter. I think the Arena league is far more vulnerable, but they already declared bankruptcy once and are almost completely irrelevant.
 

81usaf92

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I have a habit of making a post and then looking at it and deciding it was a mess and editing it and then looking at it and going it's still a mess and giving up... anyway.

I think the biggest thing the CFL has going for it is they don't have regional competition from (US based) college football or the NFL. They tried moving into the US once and failed, but they did co-exist fairly well with all the previous semi-professional leagues. They have deep roots, which has allowed them to survive all the previous leagues. They might lose talent, but if they can keep the fans I'm not sure how much what happens in the US will matter. I think the Arena league is far more vulnerable, but they already declared bankruptcy once and are almost completely irrelevant.
I think the CFL has lived off decent contracts and very little competition since the end of the USFL, but I think once the NFL really started to poach talent in the 2000’s they have really became vulnerable to competitors. They have tried to become more like the NFL in Canada and have really made it harder to transition to the NFL for some key players. The AAF and XFL 2.0 have really made the CFL freak out because both have promised less restrictive and good money contracts with the focus on getting back to the NFL. I think if the XFL makes it to year 2 then you are going to see the CFL become desperate enough to try to compete again.

But yes the CFL has survived on mostly untapped regional appeal, but I think they are desperately hoping the XFL suffers the same fate as the AAF where they are the only game in town again. If the XFL gets by their 3 year projection then we could really have a war.
 
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KrAzY3

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But yes the CFL has survived on mostly untapped regional appeal, but I think they are desperately hoping the XFL suffers the same fate as the AAF where they are the only game in town again. If the XFL gets by their 3 year projection then we could really have a war.
The counterpoint to my earlier point is that since the American Football League, there hasn't been a truly successful league in the US. All the others have had varying level of failure, so yes a more stable and competitive league could pose problems they haven't had to deal with for a very long time, if at all.

I guess that gets into what happens in college, we've had this discussion to, but where the XFL gets their talent could really determine a lot. Eventually that gets into the long term state of football in general, does it eventually break out of regional confines and become a more international offering? May be that's part of what Vince can do, if he goes after international markets (including Canada) it could be interesting, I know he broadcasts wrestling in a lot of countries.
 
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BamaNation

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So do you know the most reliable way to ID the posters you should not necessarily listen to in a thread? Find the ones that not only mis-spell the name of the parties of interest - but at best they get phonetically close. Condon sounds like Dundon. This tells me someone has been listening to a lot of talking heads and has read very little about the actual events. Believe me I think Tom Dundon is a slimeball from the get go. Just check out his history and where he made all his money. But it's difficult to try to to have a legit discussion if I don't even know who you are talking about. :)

Sorry for the confusion. I'm fixing the post so you'll no longer have to not trust me.
 

Pilot172000

1st Team
Sep 25, 2017
455
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37
Winnsboro, LA
So do you know the most reliable way to ID the posters you should not necessarily listen to in a thread? Find the ones that not only mis-spell the name of the parties of interest - but at best they get phonetically close. Condon sounds like Dundon. This tells me someone has been listening to a lot of talking heads and has read very little about the actual events. Believe me I think Tom Dundon is a slimeball from the get go. Just check out his history and where he made all his money. But it's difficult to try to to have a legit discussion if I don't even know who you are talking about. :)
I apologize. I was typing in between projects. From what I have read, the AAF was rushed and financial analysis wasn't properly done because of the need to get in front of the XFL. Many of the investors backed out before the launch because it was not as advertised and Ebersol struggled with cash flow problems right out the gate. Dundon came in like a white knight to save the league and after only a few weeks shuttered the whole operation when the NFLPA didn't agree to play ball. Rumors for a long time were that he only wanted the technology tied to a new gambling app and looked to do away with the league once this was acquired. I took that to be the case and made the comment about corporate raiding.
I didn't realize that my using the wrong name was a great way for you to judge a person's character. Good job. :biggrin2:
 
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Pilot172000

1st Team
Sep 25, 2017
455
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Winnsboro, LA
The counterpoint to my earlier point is that since the American Football League, there hasn't been a truly successful league in the US. All the others have had varying level of failure, so yes a more stable and competitive league could pose problems they haven't had to deal with for a very long time, if at all.

I guess that gets into what happens in college, we've had this discussion to, but where the XFL gets their talent could really determine a lot. Eventually that gets into the long term state of football in general, does it eventually break out of regional confines and become a more international offering? May be that's part of what Vince can do, if he goes after international markets (including Canada) it could be interesting, I know he broadcasts wrestling in a lot of countries.
I have a hard time believing that there is a viable market for a minor league football league without direct support from the NFL. The CFL is unique in that it is a national league with full support from Canada. It has been around as long as the NFL and is content with its placing. Minor League Baseball is successful because its propped up by MLB with all roster and coaching salaries paid by a major league team. The G-League has a similar setup with the NBA and is wholly owned by the NBA. All the football leagues since the AFL merger have been rival leagues trying to fill a void or push expansion with the NFL. The biggest hindrance with professional football outside of the NFL is that college football is the minor league to the NFL as far as the common fan is concerned. College football has a symbiotic relationship with NFL in that fans feel comfortable rooting for both without fear of competing interest. Sports is about identity and branding. It is almost an impossible task to compete with both the NFL and College Football for die hard fans.
 

CullmanTide

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Jan 7, 2008
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So do you know the most reliable way to ID the posters you should not necessarily listen to in a thread? Find the ones that not only mis-spell the name of the parties of interest - but at best they get phonetically close. Condon sounds like Dundon. This tells me someone has been listening to a lot of talking heads and has read very little about the actual events. Believe me I think Tom Dundon is a slimeball from the get go. Just check out his history and where he made all his money. But it's difficult to try to to have a legit discussion if I don't even know who you are talking about. :)
I took it as a play on words. Dundon is a con artist so...
 

Crimson1967

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Nov 22, 2011
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The CFL works because it is in Canada. The people there support it because they want to watch the local teams.


Sent from my iPhone using Tapatalk
 

KrAzY3

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Rumors for a long time were that he only wanted the technology tied to a new gambling app and looked to do away with the league once this was acquired. I took that to be the case and made the comment about corporate raiding.
If we follow the bankruptcy proceedings that might unravel this part of the mystery. As I understand it, the property (unless it's blocked) will go up for auction if debts are not paid:
"Chapter 7, also called "liquidation" or "straight bankruptcy," is the process by which a debtor's assets are sold, creditors receive payment, and you are then free from your debts"

We'll see if what's his face manages to protect the intellectual property or not, and what lengths he goes to do that. That's one thing that should become clearer, because I was openly perplexed when he basically bought the league. If it does go all the way through Chapter 7 proceedings, we are left with nothing but the league being a colossal failure.
It is almost an impossible task to compete with both the NFL and College Football for die hard fans.
I believe you are correct and this probably lead to the first set of investors vanishing. 30 million was spent getting to launch, something must have spooked them (perhaps things like this: "only $78,582 in licenses, franchises and royalties"). Despite one poster's assertions I lacked understanding of the issue, I made a post about why this venture was likely to fail, before the financial troubles were known. You and I seem to be outlining similar issues. It should be noted that the AAF was not pre-revenue, they were not losing money simply because they weren't trying to monetize anything, once the product launched in week one that ended. They were still losing money because they didn't have enough engagement.

Not replying to you necessarily, but Ebersol screwed up by not having concrete investing lined up and not being on the same page with the ones he did have. Ebersol spoke of an exit strategy, so I have to wonder if he saw being bought out by the NFL as an exit strategy? Perhaps hoping to hang on just long enough to prove some sort of viability to the NFL, one of the only entities that might actually might want a property losing money on a weekly basis? I'm not sure a lot of people understand the extent that the minor leagues you mentioned, and even many college football programs are subsidized. If the fans aren't paying enough to keep the lights on, someone else has to.

That's the part I still am curious about. Even if the tech itself held value, there's no need to fund a league for years to that end (corporate raiding would explain why it was shut down). That part doesn't explain Ebersol's plan. He had to imagine some rich party coming in and throwing money at them down the road if his strategy was in fact to sustain this burn rate, but why and for what? At the end of the day I guess the investors didn't get that either and that's why both sets refused to continue the funding (hockey team guy could have kept funding the league and retained ownership of the tech if he wanted).

So, we know for a fact, that two different set of investors did not think it was worthwhile to continue funding. We know it continued to lose money. We do not however, have any real idea of how Ebersol actually expected to make it profitable and that remains the big mystery.
 

81usaf92

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We do not however, have any real idea of how Ebersol actually expected to make it profitable and that remains the big mystery.
No actually we do. Ebersol always wanted an investor like Dundon from the start to establish a line of credit for 3 years, and then after the next collective bargaining agreement make a pitch to the NFL. The problems really started to happen once handshake deals proved to be non deals. His initial investor only paid a 1/4 of what he promised, and then he was desperate enough to get Dundon. Ebersol is too proud to admit that he is a horrible businessman, and was suckered into trusting a known con man.

Would it have worked? probably not, but that was clearly how Ebersol expected to be profitable.
 

KrAzY3

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Would it have worked? probably not, but that was clearly how Ebersol expected to be profitable.
Did Ebersol come out and say that or is that just knowledgeable speculation? Not disputing your account and I've believed all along that the NFL might have been their saving grace, but I didn't see where he explicitly stated that. I mean at least there's some logic to it, but still a massive risk without assurances in advance. The thing is I'm left looking at him a bit like he was a con man. No one spends 30 million then backs out unless they didn't like what they were seeing. When funding was cut they had to understand the money spent could become a complete loss. You don't do that unless you're feeling really bad about the situation.
 

81usaf92

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Did Ebersol come out and say that or is that just knowledgeable speculation?.
A bit of both. It has been noted that Ebersol actually believed Reggie Fowler was going to give him the cash flow (the same guy that tried to buy the Vikings but we found out he didn't have enough to even really put his name up for bid)

Not disputing your account and I've believed all along that the NFL might have been their saving grace, but I didn't see where he explicitly stated that. I mean at least there's some logic to it, but still a massive risk without assurances in advance. .
Ebersol and Polian have said it often that they were waiting for the next collective bargaining agreement to try to get a firm commitment from the NFL about being a feeder league, but Dundon was trying to get that agreement 2-3 years ahead of that period.
 

Pilot172000

1st Team
Sep 25, 2017
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If we follow the bankruptcy proceedings that might unravel this part of the mystery. As I understand it, the property (unless it's blocked) will go up for auction if debts are not paid:
"Chapter 7, also called "liquidation" or "straight bankruptcy," is the process by which a debtor's assets are sold, creditors receive payment, and you are then free from your debts"

We'll see if what's his face manages to protect the intellectual property or not, and what lengths he goes to do that. That's one thing that should become clearer, because I was openly perplexed when he basically bought the league. If it does go all the way through Chapter 7 proceedings, we are left with nothing but the league being a colossal failure.

I believe you are correct and this probably lead to the first set of investors vanishing. 30 million was spent getting to launch, something must have spooked them (perhaps things like this: "only $78,582 in licenses, franchises and royalties"). Despite one poster's assertions I lacked understanding of the issue, I made a post about why this venture was likely to fail, before the financial troubles were known. You and I seem to be outlining similar issues. It should be noted that the AAF was not pre-revenue, they were not losing money simply because they weren't trying to monetize anything, once the product launched in week one that ended. They were still losing money because they didn't have enough engagement.

Not replying to you necessarily, but Ebersol screwed up by not having concrete investing lined up and not being on the same page with the ones he did have. Ebersol spoke of an exit strategy, so I have to wonder if he saw being bought out by the NFL as an exit strategy? Perhaps hoping to hang on just long enough to prove some sort of viability to the NFL, one of the only entities that might actually might want a property losing money on a weekly basis? I'm not sure a lot of people understand the extent that the minor leagues you mentioned, and even many college football programs are subsidized. If the fans aren't paying enough to keep the lights on, someone else has to.

That's the part I still am curious about. Even if the tech itself held value, there's no need to fund a league for years to that end (corporate raiding would explain why it was shut down). That part doesn't explain Ebersol's plan. He had to imagine some rich party coming in and throwing money at them down the road if his strategy was in fact to sustain this burn rate, but why and for what? At the end of the day I guess the investors didn't get that either and that's why both sets refused to continue the funding (hockey team guy could have kept funding the league and retained ownership of the tech if he wanted).

So, we know for a fact, that two different set of investors did not think it was worthwhile to continue funding. We know it continued to lose money. We do not however, have any real idea of how Ebersol actually expected to make it profitable and that remains the big mystery.

We will see all or most of the cards during the Bankruptcy Proceedings. He can't dispose of the technology with a pending bankruptcy, but these are trade secrets we are talking about. Those can't simply be put back in the bag so to speak.

As for the second comment about Ebersol, I honestly think he was trying to build a startup to sell to the NFL and failed out the gate. Why the heck are you talking exit strategy from the get go? He had only one possible customer who could buy his goods and he is talking about getting out? That's a horrible business practice. I did a marketing analysis on Birmingham and Memphis yesterday and they are on par with Green Bay, Jacksonville and New Orleans as sports towns. But the difference between the NFL and an XFL/CFL/AAF is the brand power and external revenue. People buy the NFL because its the NFL and its brand power sells merchandising. The brand alone would sell t-shirts and hats in towns like Memphis and B-Ham. The tv revenue has always floated small market teams and probably always will. The larger market teams subsidize the smaller ones. The Big guys need the little guys to fill a schedule and get their own product out. In a minor league situation like this where there is no subsidizing from another established league there are very few alternative income sources. This is especially true when there are no large markets to draw income from. They were hanging their hats on sports gambling and felt that it would take about three years to establish a trusted enough brand to generate revenue from that source.
 

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