Connect with us

General

BREAKING: AAF Files for Chapter 7 Bankruptcy 

In the filings, the league claims assets of $11.3 million and liabilities of $48.3 million. According to the documents, the league has $536,160.68 in cash.

Front Office Sports

Published

on

Photo Credit: Jake Roth-USA TODAY Sports

Front Office Sports has learned that the Alliance of American Football has formally filed for Chapter 7 bankruptcy in San Antonio, Texas. In the filing, the fledgling football league claims assets of $11.3 million and liabilities of $48.3 million, as well as merely $536,160.68 in cash.

The filing comes 15 days after the league formally suspended operations on April 2, the eighth week of its first season in its attempt to provide a professional football alternative to the NFL.

According to court documents first obtained by Front Office Sports, the league’s creditors who have claims secured by property include MGM Resorts International for $7,000,000, Aramark Sports for $1,831,648 and Silicon Valley Bank for $810,523.

Other parties with unsecured claims include CBS ($5,190,153), CAA ($30,000), Mike Pereira ($60,497.81) and Dean Blandino ($45,000).

Additional creditors range from universities (Arizona State University: $1,237,793.82) to cities (San Antonio, via the Alamodome: $169,619.13; City of San Diego, SDCCU: $225,555.99) to private businesses (Rosemary’s Catering, a local San Antonio business: $203,000.81).

Of the creditors named in the filing, the following are owed more than $1 million:

MGM Resorts International: $7,000,000

CBS: $5,190,153

swirl | mcgarrybowen: $2,275,602.29

Morgan, Lewis, & Blockius: $2,413,773.57

Aramark Sports: $1,831,648

Arizona State: $1,237,793.82

When it comes to hotels, it doesn’t look like the league was paying the bills there, either.

According to the filings, here’s a look at just some of the lost income the hotels are left to figure out how to recoup:

Hilton Phoenix Mesa Hotel: $170,437.89

The Emily Morgan Hotel a Doubletree by Hilton: $324,416.29

Courtyard By Marriott Atlanta Alpharetta: $184,854.09

Embassy Suites by Hilton South Jordan Salt Lake City: $115,009.75

Embassy Suites San Antonio Landmark: $439,838.52

Embassy Suites San Antonio Riverwalk Downtown: $133,158.63

In response to the news, the league issued the following statement to The Action Network’s Darren Rovell.

The eight-team league launched in early February but was quickly beset by financial issues. Less than a month into operation, Carolina Hurricanes owner Tom Dundon pledged to invest $250 million in the league and assumed its chairman role shortly after The Athletic first reported the league was in danger of not making payroll.

Within weeks, he appealed to the NFL Players’ Association for cooperation in allowing select young NFL players to play on AAF rosters, telling USA Today on March 27 that “if the players union is not going to give us young players, we can’t be a development league.”

Failing that, Dundon told the paper, the league would consider ceasing operations. One week later, the AAF did exactly that. Multiple reports soon followed that the players were forced to pay their way home from road trips after the news broke. Now the league is officially bankrupt, 10 days prior to the scheduled date of what was to be its first-ever championship game.

*An earlier version of this story incorrectly stated that CAA was owed a figure of $30,000,000. It has since been updated to reflect the accurate figure of $30,000.

General

Meet the WNBA’s New Boss

Deloitte CEO Cathy Engelbert will become the first commissioner of the WNBA and the first woman to lead a Big Four professional services firm in the U.S.

Front Office Sports

Published

on

wnba-comissioner-cathy-engelbert
Photo Credit: Jennifer Buchanan-USA TODAY Sports

*This piece first appeared in the Front Office Sports Newsletter. Subscribe today and get the news before anyone else.

For the first time ever, the WNBA will have a commissioner. Before now, all of the league’s previous leaders like Val Ackerman and Lisa Borders were given the title of president. 

Cathy Engelbert, the current CEO of Deloitte, will take control of the role on July 17th and will report directly to Adam Silver. 

What should you know?

1. By the time she is done at Deloitte, Engelbert will have spent more time at the company (33 years) than the WNBA has been a league (23 years)

2. Engelbert is the first female to lead a Big Four professional services firm in the U.S.

3. She is the fifth person to lead the league after Val Ackerman (1997-2005), Donna Orender (2005-10), Laurel Richie (2011-15) and Lisa Borders (2016-2018)

4. Engelbert has spent the past four years in charge of Deloitte’s U.S. operation.

Basketball is in her blood…

Although she might be an accountant by trade, Engelbert is no stranger to the game of basketball. 

According to Bob Hille of Sporting News, she played at Lehigh for Hall of Fame coach Muffet McGraw and was a team captain as a senior. Her father Kurt also played and was drafted in 1957 by the Pistons.

What are they saying?

“Cathy is a world-class business leader with a deep connection to women’s basketball, which makes her the ideal person to lead the WNBA into its next phase of growth. The WNBA will benefit significantly from her more than 30 years of business and operational experience including revenue generation, sharp entrepreneurial instincts and proven management abilities.” – Adam Silver on the hiring of Engelbert

“I think that’s probably one of the reasons I was selected for this role, to come in and bring a business plan to build the WNBA into a real business and a thriving business, quite frankly.” – Engelbert to ESPN’s Mechelle Voepel

Continue Reading

General

Adam Silver Wants More Gender Diversity

The NBA commissioner states his desire to get more women into the sports industry. The NBA currently has a 31.6 percent ratio of women in team management.

Front Office Sports

Published

on

adam-silver-gender-diversity

Photo Credit: Bob Donnan-USA TODAY Sports

*This piece first appeared in the Front Office Sports Newsletter. Subscribe today and get the news before anyone else. 

If Adam Silver has his way, 50 percent of the new incoming NBA officials will be women.

That number applies to coaches too, Silver said speaking at the Economic Club of Washington.

How do the leagues stack up?

The following numbers, outside of MLB, come from 2018 reports put together by The Institute for Diversity and Ethics in Sports (TIDES) at the University of Central Florida. MLB is the first league to have a report done on it this year.

1. NBA – 31.6% of team management are women / 37.2% of team professional admins are women

2. NFL – 22.1% of team senior admins are women / 35% of team professional admins are women

3. MLB – 28.6% of team senior admins are women / 26% of team professional admins are women

4. MLS – 26.5% of team senior admins are women / 31.6% of team professional admins are women

5. WNBA – 48.6% of team VPs and above are women / 58% of team managers to senior directors are women

6. NHL – No report done

Quotes from Silver… 

“It’s an area, frankly, where I’ve acknowledged that I’m not sure how it was that it remained so male-dominated for so long. Because it’s an area of the game where physically, certainly, there’s no benefit to being a man, as opposed to a woman, when it comes to refereeing.”

“The goal is going forward, it should be roughly 50-50 of new officials entering in the league. Same for coaches, by the way. We have a program, too. There’s no reason why women shouldn’t be coaching men’s basketball.”

That’s not all Silver wants to see change…

Silver, who has been adamant about getting rid of the one-and-done rule, provided some clarity as to when that might be achieved.

According to the commissioner, the 2022 NBA Draft will likely be the first one since the 2005 NBA Draft to allow high school players to go straight into the league rather than playing a season in college first.

Citing “active discussions” with the NBPA, Silver noted that they are still “a few years away.”

Continue Reading

General

“I Thought This Was a Good Deal”: AAF Vendors Speak Out

Amidst the spring football league’s collapse, countless vendors are still waiting to get paid for services rendered.

Robert Silverman

Published

on

aaf-stiffed-vendors

Ultimately, it was the little things that best told the story of how dire things had gotten for the Alliance of American Football (AAF), an ex-team social media manager said. Starting in Week Five, social media managers no longer traveled with the team for road games. Even before, they’d doubled up on hotel rooms. The final bit of penny-pinching was the most bizarre: For the eighth and final AAF game, social was told Getty’s photographers would not be in attendance. Instead they would have to rely on “generic images,” making the job vastly more difficult.

Less than a week later, on April 2, the chaotic, short-lived lifespan of the spring professional football league, launched in March 2018 by filmmaker Charlie Ebersol, the son of venerated TV producer Dick Ebersol, came to an abrupt end. A little over two weeks after that, the AAF filed for bankruptcy, as first reported by Front Office Sports.

In the aftermath, stories like the social media manager’s have become ubiquitous. A  former player was sent a medical bill for treatment received during training camp. Scores of others reportedly had to cover their own airfare or were sent four-figure bills for hotel rooms. There was the class-action lawsuit filed by two players, claiming that ownership misled them about the league’s long-term fiscal solvency. Founders pointed fingers at one another after the debt-ridden league came crashing down. All manner of now ex-employees, from team officials to players,  learned they were out of a job thanks to social media.

The league’s bankruptcy filing revealed that $48.3 million was still owed to a variety of creditors against a $11.3 million in concrete assets, a scant $536,160.68 of which remained in the league’s bank accounts. Moreover, the AAF informed the thousands of creditors that any attempts to recoup their losses would be pointless right now, because, per Sports Business Journal, its coffers are entirely bare… “If it later appears that assets are available to pay creditors, the clerk will send you another notice telling you that you may file a proof of claim and stating the deadline,” the filing states.

But like the social media manager, many of those selfsame creditors began to suspect the AAF was on rocky financial ground long before the league officially pulled the plug.

Shortly after Tom Dundon, the majority owner of the NHL’s Carolina Hurricanes, who built his financial empire on the backs of subprime auto loans, bought a majority share of the financially-strapped league, he started to cut corners, looking to pare down expenses by any means necessary according to a report by Sports Illustrated. “As soon as Dundon took over, our f——— expense reports were getting approved out of Dallas,” where Dundon Capital Partners’ office is located, a former mid-level AAF employee told the magazine. (Dundon did not respond to multiple requests for comment sent via the Carolina Hurricanes. The form to contact Dundon Capital Partners on their website was removed at some point in the past few months )

With the AAF bleeding millions each and every week it remained in existence, per USA Today, Dundon deemed it necessary to scrimp and save wherever possible including on the margins. So vendors—companies that supplied locker room supplies, traveling equipment and more—were approached hat in hand and offered less than the full amount owed by the AAF.

READ MORE: AAF Files for Chapter 7 Bankruptcy 

While AAF officials served as the point of contact, two sources involved with the negotiations told Front Office Sports that the debt-clearing plan was conceived and ordered by Dundon’s financial team. If that meant exploiting AAF officials’ pre-existing relationships with vendors and playing on the faith placed in the league, so be it. As one former AAF official told Front Office Sports, it was “just a shit situation.”

Some of the companies did take the lowball offers, but others refused to accept less, insisting on full payment. It didn’t matter. Both paths led to vendors getting stiffed by the AAF. Dundon’s financial team kept stalling, promising the equivalent of “the check’s in the mail,” right up until the moment when the AAF closed its doors for good.

Now those vendors have been reduced to poring over the bankruptcy filings. They know all too well that, despite being out five or six figures, they’re way at the back of the line, trailing giant conglomerates like MGM and Aramark which are owed millions. And they’re not happy about it.

“I definitely feel scammed,” one vendor said.

(more…)

Continue Reading

Trending