League Failure.  That is all that can be made from the announcement by the Alliance of American Football (AAF) that they are shutting down football operations.  League Failure from the top to the bottom.   In every way possible.  With the end of the AAF this week that will leave one alternate football league in the wings.  The XFL is set to start up operations again in February of 2020.  From their point of view it was nice of the AAF to show what not to do when starting up a ne football League.

League Failure is not a new thing in the world.  As far as we know so far since the inception of the NFL there has been at least 17 leagues that have failed.   That is just 17 alternate football leagues that have failed.  On that Wikipedia page the list is riddled with League Failure.   Of course it is not easy to start a new pro sports league.  There is a lot more that goes into it than most people would think.   With the right set up you still should be able to make it at least one season before closing your doors.

The AAF says that it is not folding just suspending operations at this point.  They will have the face reality.  Suspending operations the way that they have.  Leaving employees, media outlets, vendors, cities and everyone that put anything into this hanging.  They will have to start completely over.  They will not be able to just start up the league again.  All those people will be gone.  They really can’t wait around to see if they will have a job again.  The same will be true of the players.  I am sure that many of the players were on the phone to the XFL as soon as they got the news.  This is the best advertisement the XFL could have possibly asked for.

League Failure – The Lack of a Plan

The idea for the  AAF started in 2016 when Charlie Ebersol was making a documentary about the XFL for ESPN.  He saw the problems that the XFL encountered and though that fixing those issues would lead to a successful product.   I think that he is correct on that.   The problem is that the AAF was founded in March of 2018 and went live in February 2019.   Eleven months is just not enough time to make sure that you have things pointed in the right direction.  The AAF was following in the path of the XFL.  Maybe different mistakes but still making mistakes as they were moving along.

As any business owner would tell you.  In order to succeed you need to have a plan in place.  Starting a business and the hoping that the money shows up is not a business model that will lead to success.   It seems that the AAF followed the hope model and it did not work out.

With co-founder Bill Polian it looked like Ebersol has assembled a good team to head the AAF.   They brought in people that knew football.  They set the league up similar to the MLS where the league would own all the teams.  That was the smart part.  The problem is that it looks like the league grossly underestimated how much it would cost to actually run the teams.  We don’t have numbers on how many employees each team needed but it would be easy to say that each team would have needed at least 10 to 20 employees just to run the franchise.  This would not include any of the temporary employees they would need on game days.  The question there is where does that money come from?

The first year of existence that money is going to have to come from an outside source.  An investor or investors would have to put up the money with the understanding that year one that money is gone.  This investment is a risk and you would have to be willing to lose money initially to make money later.   The AAF was under funded from the beginning and then had to scramble for money.  They thought they had found that money with Tom Dundon.  It turns out he was not who they thought he was.

By accepting the money from Dundon the AAF gave up control of the league to him.  Initially Dundon had said that he was going to invest $250 Million into the AAF.  Turns out that was not an up front investment but a time projection of what he would invest.   This year he put in about $70 Million.  That is a good chunk of change but was still not enough to keep the league going.   It appears that money was not coming in fast enough to offset the loss.  Sitting on the outside looking in that is not a surprise.   After all it is an investment with the thought of future earnings.  Clearly not something that you were going to get your money back today.

It is unclear what Dundon’s motive was by investing in the AAF.  The AAF was working on several apps that would enhance the games and allow people to bet on different parts of the game though the app.   If the AAF had patents on those apps the IP could be worth billions.  In that case then a $70 Milion investment is peanuts.  If that is what he did that may be good business practice for him but it really sucks for everyone that was either working for or interested in the AAF.

I am not sure that is what really happened.  Here is what we are sure of.  The AAF rushed to get the league going so they could beat the XFL to the punch.  The problem with that is rather than make sure that they could cover everything they left things to try and fix them during the season.  That is never a good idea.  When you do things that way it will greatly reduce your chances of success.

The real problem here is that as far as viewership goes the league was on the way to being a success.  The numbers for the broadcasts were actually pretty good.  The first game had over a million viewers.  After that it dropped to between 500,000 and 600,000 viewers.  The numbers for the streaming I did not bother to look up.  The streaming was a mess.  I watched as much as I could but it kept hanging and kicking me off.  Attendance at the games was not that great.  They were averaging around 8,000 fans a game.  They really would have needed to get that up in the 15,000 to 20,000 in attendance.  We will never know if they could have gotten to that point since they crashed and burned after week eight.

They say that this is just on hiatus.   I would like to believe them and that the AAF will be coming back.  The truth is there is probably almost no chance that this will happen. Stopping play afte week eight when you were so close to finishing out the season.   Telling all the players that they were on their own to get back home.  Players getting back to where they were staying and their stuff was already moved out of rooms.  That is a lot of bad feeling the AAF created by the way they did things.  Any player would really have to think twice about coming back to this league.  What would prevent the same thing from happening.  If they did this once they would probably do it again.

With the people they had involved with this project you really would have though that they would have had things planned out better.   Clearly they did not and it showed.

I do believe that there is room for minor league football.  Probably a 10 – 12 team league.  They would have to find a way to keep cost down as much as possible.  It would never be what the NFL is and I think that they would understand it.  There are people in the sport world that would not understand that and would complain about it.  We then this league would not be for you.  So the solution is just don’t watch.  Hopefully the XFL was paying attention and can learn from the AAF League Failure.

Read our most recent The Week That Was post here