On Friday, after a quick 35-minute hearing, a U.S. bankruptcy court approved the sale of the XFL for $15 million to Alpha Acquico, the holding company represented by Dany Garcia and her business partners Dwayne “The Rock” Johnson, and RedBird Capital. The approval of the sale cleared the way for the new ownership group to attempt to bring the XFL back from the graveyard.
There had been an objection from an unsecured creditors’ committee that had objected to claims against parties like Vince McMahon and his company WWE transferring to Acquico, which the creditors would have no redress against. WWE provided back-office services for the XFL, and the creditors contended the wrestling company overcharged. After the sale agreement was renegotiated, the creditors held onto some of the right to seek past payments owed.
It is interesting that the XFL only attracted four buyers, and at the July 30 bid deadline only two came in. Of those, only Acquico’s was valid.
The rumors that there were dozens of interested parties may have been true. The lack of genuine interest in the league probably does not reflect on the league itself, but rather the sports business landscape in current times.
It was reported in The Athletic that the incoming owners plan a round of talks with prospective media partners in the coming weeks. There is also mounting evidence that the ESPN and Fox Sports’ broadcast contracts would not be carried over to the new ownership group, although informal discussions have already begun, and will ramp up over the next few weeks. Fox is in talks with the XFL about letting its contract carry over to Acquico, and ESPN has objected to its deal passing through.
A broadcasting deal is vital, since the league’s success in early 2020 was mainly due to their robust television exposure.
Fans, players, and especially laid-off staff, are excited by the recent developments. However, it is becoming clearer that the league may not rush back to play due to the unknown situation regarding the COVID-19 pandemic. The new ownership group is talking big about getting back into the game of football, and that may be their job to do so, especially when they are trying to lobby for new broadcasting agreements. However, the revival of the league may be delayed past the spring of 2021.
Reported by The Athletic, an insider claimed, “These guys won’t move a muscle until they have a lucrative media rights deal.” The same source said Fox Sports had already denied the first offer of a new proposal.
Still, Acquico claimed that this was false, and that media talks were just getting rolling.
Meanwhile, there is the matter of monies owed. As part of the purchase agreement, Acquico agreed to pay $9.2 million in cure amounts, which is money owed to vendors whose contracts are carrying over to the new buyer. In the XFL bankruptcy filing, court documents listed $31.4 million of liabilities. Earlier this week, unsecured creditors continue to file claims, adding to the tens of millions of dollars owed by the league.
On August 4, the St. Louis Visitors and Convention Commission, the leaseholders of The Dome at America’s Center where the St. Louis BattleHawks played, filed a $1 million claim. On August 3, Jonathan Hayes, the head coach and general manager of the BattleHawks filed a $633,333.33 claim, and June Jones, the Houston Roughnecks head coach, filed a $540,000 claim. More claims are probably rolling in as this article is written.
Although we’d like to see the XFL rush back onto the field, COVID-19 and business realities may be setting in for a longer stay.
