The Alliance of American Football got off to a tremendous start in February 2019. The eight-team league’s first two games on CBS averaged 3.25 million viewers, topping a national NBA telecast on ABC that weekend.
Underneath, however, there were major financial issues. Funding from lead investor Reggie Fowler had dried up, and the league was late to pay its 450 players. AAF co-founder and CEO Charlie Ebersol, son of sports TV luminary Dick Ebersol, needed new financial backing fast.
Enter Tom Dundon. Ebersol, who declined to comment for this story, first connected with Dundon via former Topgolf Executive Chairman Erik Anderson on Feb. 12 about possibly investing in the AAF. By Feb. 15, Dundon had transferred $5.1 million in emergency funding to the league to allow it to make payroll. On Feb. 19, the AAF and the Hurricanes each announced that Dundon had committed to investing $250 million in the league and would serve as chairman of its board, effective immediately.
“They put up good ratings, the football looked good, and they were in a position where instead of having to continue to raise money, they could use the stability that I was able to provide them,” Dundon said in a “Rich Eisen Show” interview that month.
The details of what occurred between that courtship and the league’s demise two months later — during which time Dundon invested just less than $70 million in the league — remain at the center of the ongoing legal battle.
According to a lawsuit filed by the U.S. Trustee overseeing the AAF’s bankruptcy, Ebersol told Dundon the league would need $90 million to get through its first season, and Dundon said that instead of just providing short-term funding, he would serve as “a ‘series infinity’ investor who would solve the league’s financial problems” by committing $250 million and supporting the league for years. Upon taking control of the league, the lawsuit claims, Dundon reneged and moved to cut costs before shutting down the league midseason and filing for bankruptcy.
In a lawsuit filed the same day against Ebersol, however, Dundon claims Ebersol misled him about the financial state of the league, failing to disclose its myriad liabilities and prompting him to make a $70 million commitment that he otherwise would not have made.
Prior to the league’s demise, Dundon and Ebersol, along with fellow AAF co-founder and ex-NFL personnel executive Bill Polian, held discussions with the NFL and NFLPA about forging a relationship that would make the AAF a feeder league for America’s biggest sports entity. One Dundon associate said the unsuccessful conclusion of that dialogue was the last straw for Dundon.
