Inside the sudden collapse of the Alliance of American Football

AAF goes under: Inside the sudden collapse of the Alliance of American Football
Says one team president after cleaning out his desk: ‘We made a deal with the devil’

RYAN KARTJE

link: [www.ocregister.com]

SAN DIEGO — Three weeks before the Alliance of American Football suspended operations against his wishes, confounding league officials and leaving stunned employees and players stranded and reeling, Charlie Ebersol stood on the sideline at SDCCU Stadium in a blue AAF windbreaker, reveling in the roar of the crowd.

It had been Ebersol’s vision to start a spring football league, one that might complement the NFL instead of compete with it, and in a matter of a year, he’d built one, complete with eight teams, more than 400 players and a slew of major media partners.

“Everyone seems to forget that in the stories,” Ebersol told the Southern California News Group in March. “We built this league from absolutely nothing. No company behind us, no marketing agency, none of that. Built from scratch.”

But beneath that proud facade, the league’s foundation was cracking. A deal with billionaire investor Tom Dundon meant to bail out the AAF was already becoming its undoing. Team budgets had been slashed to nothing. Bills were left unpaid. Before long, the nascent league would crumble, leaving many who trusted the vision of Ebersol and his co-founders feeling misled and angry. Most still don’t understand exactly why the AAF shuttered. The league’s brass, meanwhile, place the blame firmly on Dundon.

“We started out with a vision that we all believed in,” said Jeff Garner, president of the San Diego Fleet. “We were told – just like our partners were told, our players were told, our coaches were told – that we had funding for three years and that we were going to take a long-term approach to this. We knew we were going to lose money up front, but we were going to focus on the football and the fan experience. That’s what we were told. But an investor backed out, and we made a deal with the devil.”

That night in San Diego, as the Birmingham Iron lined up for a game-winning field goal, no one had any idea the AAF would never return here. The Fleet had struggled to find a foothold in Year 1, often leaving large swaths of open seats in this massive stadium. But now, as a few thousand rose to their feet, the buzz for football in the spring felt palpable.

Ebersol beamed. This was his vision, the league he’d sketched out over pancakes with Pro Football Hall of Fame executive Bill Polian. As the stands emptied for the last time, he lingered on the field, shaking hands with players who hoped the AAF might be their second chance.

“Charlie Ebersol, that’s my guy,” Trent Richardson, the Iron’s running back, said in the locker room after. “He gets it.”

But the league wouldn’t finish its first season, cancelling its final two weeks, as well as the playoffs. Players returned from canceled practices Tuesday to find they’d been kicked out of their hotel rooms. In Memphis, some woke up to thousands of dollars in unpaid hotel charges on their accounts.

By 2 p.m. Tuesday, long after word of the AAF’s demise had spread, league employees received a short email sent from a generic company address. The email alerted them that their employment would be terminated the next day. “Thank you again for your service,” it read.

Polian issued a statement, expressing his disappointment. By Thursday, Ebersol had yet to break his silence. The AAF did not make him available for this story.

“They certainly didn’t take care of the employees,” Garner said. “They terminated everyone, no severance, no anything, you’re done. The players are stranded and told they have to find their own way home. Even if you had to end it, you could’ve done it in a classy way. This was classless.”

***

As the National Football League became a ratings behemoth, tightening its stranglehold as the most popular form of televised entertainment America had ever seen, there have been many well-funded, ill-fated attempts to parlay that success into a spinoff.

First among these flops was the World Football League, which couldn’t deliver on its initial promise – or on player paychecks – and folded in 1975 after two abbreviated seasons. A decade later, on advice from New Jersey team owner (and future president) Donald Trump, the United States Football League made a disastrous decision to move from spring to fall, quickly squandering its early success. The XFL later met a similar fate, debuting to huge ratings before closing down after one season, doomed by misguided gimmicks and bad football. None, however, fell apart as swiftly as the AAF.

And yet, amid this graveyard of failed upstarts, the allure of launching a spring football league persists now more than ever. It is an El Dorado of sorts for gridiron-minded entrepreneurs, intoxicating investors into spending millions on the assumption that Americans don’t just want more football, they need it. In spite of the AAF’s failure, multiple other leagues plan to launch over the next year, all with their own ideas on how to fill that football void.

“When you consider that football is so dominant,” Ebersol said in March, “the fact that there is no alternative football league out there is a bizarre reality.”

Ebersol is more familiar than most with the past failures of alternative leagues. His father, Dick, helped launch the XFL in 2001 as chairman of NBC Sports. Ebersol himself co-directed a documentary, “This Was The XFL,” which chronicled the league’s downfall. It was from that experience that Ebersol became convinced of why other spring leagues had failed in the past.

“People have dramatically underestimated how important it is to have good football,” he explained. “They haven’t had the operation to be able to do it.”

So he joined with Polian, the longtime NFL general manager and Indianapolis Colts president, and set out to construct an entire league infrastructure in mere months. It was an ambitious undertaking, but with the specter of other leagues looming, the urgency felt necessary in order to fulfill the promise of the highest quality football.

“We all realized it was rushed,” Garner, the Fleet president, said. “We knew that we were moving forward at the pace we were to capture talent ahead of the XFL. … I think it was probably the right thing to do from a football perspective. But everything else suffered from that.”

With the inaugural season fast approaching, the Fleet struggled to find facilities for practices or team meetings. The team was left scrambling after short notice kept them from securing the Chargers’ former practice facility at Murphy Canyon.

So the Fleet ultimately held their practices behind a maintenance shed, at the far corner of the SDCCU Stadium parking lot, where the team shared two shortened grass fields with a rugby club and a youth soccer academy. The field conditions were good, but the arrangement was hardly ideal. Players had to be bused from the field to the stadium’s locker room every day, while a series of trailers were converted into team meeting rooms.

“We made a little trailer park,” Garner said. “We did the best we could.”

Still, Fleet players weren’t complaining. They saw only opportunity. “I’ve been a couple places where your reps are so limited that it’s impossible to make an impression,” said Fleet and former Rams wideout Nelson Spruce.

With a three-year, guaranteed contract in hand, Spruce even wondered if he might choose to stay with the AAF over an NFL practice squad.

“I’m pretty invested in this,” he said.

Before he became chairman of the AAF, in a decision that would ultimately spark the league’s downfall, Tom Dundon accumulated his massive fortune primarily off subprime auto loans, which offer risky, high-interest loans to desperate people who are likely to default on their payments.

Dundon’s short-lived investment in the AAF was not all that dissimilar. After one of the league’s primary backers, Reggie Fowler, pulled the remainder of his pledged investment just a week into the season, the AAF found itself dangerously short on cash, even as TV ratings exceeded expectations. A delay on player paychecks was blamed publicly on a “payroll glitch”.

Then, in swooped Dundon, who committed $250 million and took unilateral control of the league.

“We didn’t assume in our business model that we would have this much success, this fast,” Ebersol raved in March. “We didn’t expect someone like Tom would want to pay such a significant amount of money to be a part of it this early.”

Dundon described the investment as “enough money to run this league for a long time.” Polian said it provided the AAF with “long-term stability, three, four years down the road.” But Dundon’s takeover was met with a mix of relief and unease among team officials, many of whom questioned how Ebersol and Polian could so quickly hand over control of their league to a deep-pocketed investor with unclear motivations.

The red flags only accumulated from there. On Dundon’s orders, team budgets were immediately slashed to account for only bare essentials. Marketing and promotions budgets were eliminated, as were team dinners. The night before one game, Fleet officials found out that the league hadn’t paid vendors for a fireworks show they’d advertised extensively to local fans. They convinced the league to cover the cost just in time.

Still, the vision of the league’s co-founders appeared to be at least somewhat intact before the final week of March. That’s when Dundon told USA Today that the league would likely fold without a formal player-sharing agreement with the NFL Players Association.

The ultimatum was a stunning departure from comments Ebersol and Polian made weeks earlier. While a developmental partnership with the NFL had always been a part of the league’s business plan, Ebersol shrugged off the suggestion that an immediate agreement was necessary to the AAF’s survival.

“Ultimately,” Ebersol said, “with or without a relationship with the NFL, we’re a developmental league for the NFL.”

The sudden shift in plan left officials in both leagues confounded. Dundon had no leverage to force the NFL into a partnership that almost certainly would violate its collective bargaining agreement. Sources within the AAF confirmed that Polian and Ebersol strongly disagreed with Dundon’s tactics. As chairman, however, Dundon had the power to shut down the AAF on his own – though doing so meant sacrificing $70 million he already invested.

Speculation over his motivation ensues, days after the league shut down. Some league officials have posited that Dundon, who also owns the NHL’s Carolina Hurricanes, might have bought the AAF for its gambling and real-time tracking technology. Given the tangle of investors involved, the actual answer is likely a simpler one.

“It made no sense to any of us,” Garner said. “There were ongoing conversations, as recently as Monday with the NFLPA. They were definitely talking. It was moving in a good direction with them, and ultimately, something would’ve been worked out. This had very little to do with the NFLPA.

“It was about money, plain and simple.”

***

Even as its vision was compromised and its capital ran dry, Garner held out hope the AAF would make it through the end of its first season. The product, he felt, had been as Ebersol promised. The TV ratings remained steady. With some time – and money – maybe the league could regroup.

By Wednesday, as he cleaned out his office in San Diego, Garner had given up on that future. Like most others around the league, he blames Dundon for the league’s demise.

But Ebersol and Polian are certainly not blameless. Both trumpeted the AAF’s stability, repeatedly assuring that the league had years of financial runway remaining. In spite of those assurances, it took just one week for the AAF to face possible financial collapse. The league lasted just seven more weeks after that, and with unpaid bills and unhappy investors, it could face impending litigation for months to come.

“The stability of the funding was misrepresented to everybody,” Garner said. “But we did have the right idea, and they were trying to do the right thing.”

As Fleet employees filed in on their last day, though, Ebersol’s original vision no longer mattered. Garner had moved his family from Pennsylvania to San Diego to be the Fleet’s president.

Now, in his last few hours, all that was left of the Fleet for him to preside over was laptop inventory.

“Hopefully,” Garner said, “the league will sell these to pay their creditors.”