Fight is looming over MGM’s effort to buy AAF app

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If you think MGM is getting a great deal in purchasing the AFF’s real-time betting app for $125,000, you’re not alone.

Per a source with knowledge of the situation, a fight is looming within the confines of the AAF’s bankruptcy proceeding over whether the proposed sale of the app to MGM should be approved.

Beyond the measly sum of $125,000, which in most American markets wouldn’t come close to buying a three-bedroom house, MGM will reduce its claim against the AAF bankruptcy estate from $7 million to $5 million. But so what? Beyond the app, the AAF’s assets are largely non-existent — to the point where the AAF at one point advised creditors to not waste their time filing claims.

The thinking is that, if the AAF indeed plunked $40 million into the development of technology that permits real-time betting (the delay from field to phone is a matter of milliseconds), the app has a value far greater than $125,000 plus an effort to get 28.5 percent less blood from a turnip. So why not market it aggressively? Why not auction the technology to any and all interested parties, from traditional casinos to FanDuel/DraftKings to the various sports leagues (NFL included) to major tech companies that could turn the thing into the pre-eminent driver of instaneous wagering, worldwide?

Those arguments will eventually be made in the AAF’s bankruptcy case. And if, in the interim, anyone out there wants to make a better offer for an app that could be worth tens of millions if not more, now is the time to make your interest known.

7 responses to “Fight is looming over MGM’s effort to buy AAF app

  1. The app is based upon integrating player position / orientation information from sensors in the pads.

    The question is what marketplaces could use the app? The first answer is the NFL, but I don’t see the NFL making that information inexpensive nor would the NFLPA agree cheaply. The AAF was a different ownership structure, so it could make it happen — the NFL is not so easy.

  2. I am not a bankruptcy lawyer, but arnt assets normally auctioned off to pay Tier 1 creditors? MGM trying to forgive a portion of the outstanding debt, but come on. if 40 million was spent on it, and its at least a solid base, its worth 20 million. if it works amazing, its worth 40+ in the long run..

  3. The app was the only facet of the AAF that seems to have been thought out at all. And it’s fair to question how much money they spent on it since they were out of cash by Week 2. A cool gambling app isn’t terribly helpful when you’ve shut down midway through your first season.

  4. It is much more complex than this article is asserting. As another comment noted, there is senior debt, junior debt, etc. In addition, MGM’s credit may be secured by the technology. Lastly, if they are reducing their claims by $2mm then they are paying $2.125mm for the technology. The cost to develop the technology has no bearing on the market value.

  5. Didn’t Mike report part of a prior deal between them included a provision that mgm had right of first refusal? Inside deal no competition?

  6. Whoa…tap the brakes on talk of this app being worth 10s of millions or more. Highly unlikely this app is some revolutionary platform architecture upon which all others will be derived from. It’s so specific to the nuances of the AFF, it would likely require a total rewrite to repurpose for another organization’s business requirements.

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