XFL could make comeback, but without McMahon
STAMFORD — The bankrupt XFL could return in 2021 — but it would do so under new ownership after founder Vince McMahon said he would relinquish control of the football league, according to court documents submitted in the past week.
McMahon’s decision to withdraw from the bankruptcy bidding process, which has attracted interest from dozens of parties, reflects the contention between XFL officials and the case’s official committee of unsecured creditors. The latter group has suggested the XFL has tried to manipulate the sale of its assets to benefit McMahon, which is vehemently denied by the Stamfordbased league and McMahon, who is also WWE’s CEO and chairman.
“Filled to the brim with inflammatory rhetoric and unsubstantiated accusations that the debtor (the XFL) rigged the bidding procedures in favor of Vince McMahon, the committee’s objection (court filing) is irresponsible and value-destructive,” the league said in a brief filed May 26 in federal bankruptcy court in Delaware. “Indeed, in response to the needlessly vitriolic personal attacks in the committee’s objection, McMahon has chosen to bid the debtor good luck and simply walk away from any potential bid for the debtor’s assets.”
In recent testimony in the case, McMahon made a similar rebuttal.
“The suggestion in the media is that I’m trying to buy the XFL back for pennies on the dollar. Not only is that not good for my personal reputation, it’s also not true,” McMahon said in a deposition. “I’m not going to be a bidder. And the other thing, too, is that ... you’ve damaged the possibility of attracting some bidders because it looks like that, oh, OK, I see what Vince is going to do. A lot of bidders would not come forward because if Vince is going to be involved again, he must know what he’s doing, yaddy-yaddy, and I don’t know if I want to bid against him.”
Bids are due July 30, according to an order signed May 28 by Judge Laurie Selber Silverstein.
“The debtor has articulated good and sufficient business reasons for this Court to approve the bidding procedures, including the scheduling of bid deadlines, an auction and a sale hearing with respect to the proposed sale,” Silverstein said in the order.
Much of the scrutiny of McMahon’s involvement in the league’s future stems from arguments about the time frame for submitting bids.
The XFL had proposed a July 6 deadline. But the committee sought to push the date back to Sept. 2, arguing the extension was necessary to attract a sufficient number of bidders and account for the disruption of the coronavirus crisis.
“Proposing a quick sale process will freeze out many potential purchasers unwilling to rush or forego necessary due diligence,” the committee said in a May 19 filing. “The debtor’s insistence on an aggressive sale timeline makes no sense. Unless, of course, the debtor’s actions are being dictated by McMahon, who appears intent on re-acquiring the XFL football league at a discount, free of all its liabilities.”
In the same brief that admonished the committee for questioning McMahon’s motives, the XFL said it was willing to extend the deadline by about 25 days.
“This (proposed new deadline) is the absolute best that the debtor can do,” XFL officials said in the May 26 brief. “Delaying the sale beyond the first week of August will jeopardize a purchaser’s ability to restart the league in 2021, which would likely decrease the number of potentially interested bidders and the amounts those bidders would be willing to pay.”
A revived league would have to rebuild its back-office staff: The week before its April 13 bankruptcy filing, the league laid off nearly 100 employees who had been based at its main offices at 1266 E. Main St., on Stamford’s East Side.
“I think potential owners should be wary of the McMahon fate before they drop millions into the game,” said Daniel Durbin, director of the University of Southern California’s Institute of Sports, Media and Society. “That said, I don't think the bankruptcy will create a greater stigma. There are so many bankruptcies floating around right now that it's becoming a rite of passage for media groups and sports.”
With the 2020 comeback season, McMahon had sought to prove that a non-NFL professional football league could succeed. Such a feat eluded also his first version of the XFL, which ran for one season in 2001.
Two days before the season’s sixth round of games, the league announced March 12 that it was suspending play in response to the spread of the coronavirus. A few days later, the league confirmed that a player on the Seattle Dragons team had tested positive for the virus. On March 20, the league said that it was canceling the remainder of the 2020 season.
During the past 15 months, two other football leagues, the Alliance of American Football and the Arena Football League have also shut down.
“I don't know why anyone would think there is a driving need in the American public for a new football league,” Durbin said. “In the major network days, you had a built-in audience just because you had so few networks. Today, you have to justify the time expenditure to a millennial audience that has a notoriously short attention span and almost no sense of history.”