AFL heading for bankruptcy?

With the 2009 season scuttled and prospects for 2010 looking dimmer all the team, the Arena Football League could be filing for bankruptcy protection, according to John Lombardo of SportsBusiness Journal.

Lombardo reports that the league has $14 million in debt, and that it would need $10 million to $12 million in new capital in order to return in 2010.

As we explained several weeks back, $10 million would come from selling a Pittsburgh expansion franchise to a group including Steelers Hall of Famer Lynn Swann.  

The other alternative is for existing owners to cough up some cash.  But, as Lombardo reports, that’s a tough sell.

“There is a commitment to a plan to play and some owners don’t want to put up the cash,” an unnamed source told SBJ.

Apparently, these are the “weak sisters” to whom Chicago Rush co-owner Mike Ditka was referring last month.

Bottom line?  If the AFL can’t raise the assets to offset the liabilities, then the only alternative for dealing with the debt is to avoid most of it, by declaring bankruptcy.