$320 million Alliance of American Football trial underway today, six years after league shuttered; Goodell testimony expected
Key question in the trial: did Tom Dundon purposefully torpedo the league?
Almost exactly six years from the day the Alliance of American Football filed Chapter 7, a long brewing but explosive case goes to trial this morning to answer the question: did sports titan Tom Dundon tank the league on purpose? The trial will include videotaped deposition testimony from NFL commissioner Roger Goodell, who is expected to describe the NFL’s plans to invest in the nascent minor league, which were scuttled when the AAF shut down.
Now a distant memory, the AAF was the brainchild of Charlie Ebersol, scion of the great TV executive Dick Ebersol. But in a federal bankruptcy court room this week the younger Ebersol will get his chance to tell his story of contending Dundon essentially conned him with promises made privately and publicly to invest $250 million in the nascent league and then pulled the rug out when given the keys. The AAF played its first game February 9, 2019, Ebersol sold the league less than a week later to Dundon, and the Chapter 7 was filed April 17, 2019.
Ebersol sold the league when money due from investor Reggie Fowler did not come through (Fowler it would later be revealed was in the process of being indicted in a cryptocurrency scandal, for which he was convicted and jailed). Dundon, Ebersol claims, promised $250 million, but then undercut the AAF’s operation while turning away other investors.
Dundon owns the Carolina Hurricanes, is a major investor in TopGolf, and owns the professional pickleball tour. He is scheduled to testify this week.
Why would Dundon purposefully stifle his new league and then throw it into Chapter 7? The plaintiffs argue he did it for tax reasons, to book losses against gains elsewhere in his portfolio. He says he invested $70 million into the league, but it was a hopeless financial basket case.
The judge overseeing the case, Craig Gargotta, dismissed Dundon’s efforts to toss the case, finding enough evidence that the billionaire’s actions deserved scrutiny at trial. And notably he did dismiss a countersuit Dundon filed against Ebersol claiming the league founder had not been transparent about the AAF’s finances.
The AAF’s brief life was at the time just the latest failed minor football league to come and go. Since then, the UFL has emerged as a strong contender to stick around, currently in its second season (longer if you count the previous seasons played by its predecessor leagues the XFL and USFL that merged in 2024). The UFL is also owned by Disney, Fox, RedBird Capital, Dwayne Johnson and Dany Garcia, so it has the capital behind it to keep going.
As for the NFL commissioner, according to a witness list filing made in the case, “Goodell is expected to testify that he has known Charlie Ebersol for approximately twenty years and considers him honest; that he viewed Ebersol as the principal figure behind the AAF and recommended Bill Polian for football operations; that he had limited involvement in the AAF-NFL 32 Equity term sheet, with most details handled by staff; and that although he found AAF’s officiating technology interesting, he was not involved in its deployment and had minimal interaction with Tom Dundon beyond a brief introductory call.”
The case against Dundon is filed by the U.S. trustee who oversees the bankruptcy. He is seeking the $180 million difference between the $250 million Dundon pledged orally, and the $70 million he paid to run the AAF from February to April 2019. The trustee is also seeking the lost enterprise value of the AAF, which the office pegs at $144 million. That means the trustee is asking for over $320 million.
The case, occurring before judge Gargotta in his bankruptcy court in San Antonio, is expected to last seven to 10 days.
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