At a time when many are wondering why the Alliance of American Football needed $250 million last week, the correct answer to the question could be that it didn’t.
AAF CEO and co-founder Charlie Ebersol explained Tuesday morning that the quarter-billion-dollar investment from Carolina Hurricanes owner Tom Dundon (pictured) reflected a decision by Dundon to accelerate the startup league’s ongoing effort to raise funds.
“It was not urgency,” Ebersol told PFT by phone, explaining that the AAF has been structured like a tech startup, with multiples rounds of investments planned. Dundon decided to short-circuit the process.
“‘You can raise Series A, Series B, Series C, or you can raise Series Infinity right now,’” Dundon told Ebersol.
Ebersol opted to accept the offer from Dundon, who had been studying the AAF for the past year, and who decided to make his move after the league’s performance in its debut weekend.
It was the kind of payment that none of other investors were capable of making, and it makes Dundon the largest institutional investor in the league. He’ll instantly become chairman of the Board of Director. Ebersol will continue to run the business side of the AAF, Polian will run the football side of the AAF, and Dundon will remove the fundraising obligation from Ebersol’s plate.
Ebersol nevertheless understands the skepticism, fueled by a report from TheAthletic.com that painted a picture of a league that needed to be saved after only one slate of four regular-season games.
“If you’re looking as an outside observer,” Ebersol said, “any time we’re raising money it looks like urgency.”
With a fresh $250 million, there should be no urgency now. Whether that means Dundon will get a return on his investment is a different issue, as is whether the league will survive for the long haul. Regardless of what the consequences of not getting the money could have been, the reality is that the league should now have the funding to get through at least a couple of seasons, if not longer.