NHL owner reportedly saves the Alliance of American Football with huge investment
The upstart new professional football league quickly needed a large cash infusion to keep the lights on.
More than 29,000 fans filled the Alamodome on Sunday to watch the San Antonio Commanders lose a tight game to the Orlando Apollos, in the second week of play for the Alliance of American Football. That followed a successful first week where the new pro league drew impressive ratings on CBS, on par with an average NBA game.
But behind the scenes, the highly touted spring football league was desperately running short on cash after just one week of football, the Athletic reported Monday night. According to Action Network HQ’s Darren Rovell, the league missed its payroll in Week 1, telling agents the delay was due to an “administrative glitch.”
It took a $250 million infusion of cash early last week from Tom Dundon, the billionaire owner of the Carolina Hurricanes, to rescue the league, according to The Athletic. On Tuesday, the Alliance announced the Dundon would serve as chairman of its board of directors.
"As a lifelong sports fan and entrepreneur, I’ve always valued the opportunities generated in the ecosystem of sports and entertainment," Dundon said in a statement released by the Alliance. "I’m impressed with The Alliance’s stunning growth in-stadium and across TV, mobile and social media in just these first few weeks."
Dundon told the News & Observer columnist Luke DeCock that he initially passed on investing in the Alliance, but reconsidered after the league faced financing issues following a strong ratings debut during its first weekend of play. Dundon also reportedly received guidance on the investment from former NFL quarterbacks Tony Romo and Troy Aikman.
One league source didn’t dispute the reports of cash-flow problems, but told the Inquirer that with Dundon’s investment, the Alliance would be “able to move our business to the next phase much faster.” A spokesperson for the Alliance said, “Players were never in danger of not getting paid."
Charlie Ebersol, the co-founder and CEO of the Alliance, dismissed reports of the league needing a bailout to the Associated Press.
“It’s a giant challenge and opportunity, and as a startup you are constantly looking for some peace of mind,” Ebersol said. "When we got out of the first week of games, we saw there was so much interest from investors, and if we had one person who could take care of us for a very long time, that would be great.”
It’s unclear what Dundon’s addition will mean for Ebersol and head of football Bill Polian, who co-founded the Alliance and positioned it as a developmental league for the NFL.
Ebersol told the Inquirer earlier this month that the Alliance was built to be sustainable for at least a couple seasons, based largely on the technology the league was developing for its app, which would enable people betting on sports to place wagers in real-time.
“Look, you can’t raise money to launch a football league. Anyone who tells you they can is lying, unless you’ve got a quixotic billionaire who just wanted to spend all of his money,” Ebersol said. “We raised money as a technology business … The actual business is data, data compression and data delivery manifestation, or artificial intelligence or machine learning.”
The Alliance’s eight teams are divided into two divisions, mostly scattered throughout the south in cities with no local professional football team, such as San Antonio, Birmingham, and Memphis. Alliance games air on the NFL Network and CBS Sports Network throughout its 10-week season, and CBS is scheduled to air the league’s championship from Sam Boyd Stadium near Las Vegas on April 27.
If the Alliance survives into its second season, it will face head-to-head competition from the rebooted XFL, which will once again be run by WWE CEO Vince McMahon. McMahon reportedly expects to spend $500 million in the league’s first three seasons.