We’ve seen the reports that speculate Vince McMahon could be trying to buy back the XFL. But the facts don’t support the claim. And don’t forget, these are creditors that feel this is the case. Not anyone connected to the McMahon family, or a bidder.
The basis of the claim was a proposal to the creditors-which was objected to-to pay $3.5 million to the season ticket holders for the games that were played. And that former league president Jeffrey Pollack reached out to Seattle and St Louis to gauge their feelings about renewing the stadium leases.
When I first heard this, I thought, yeah, maybe. Could be possible. But after speaking with independent attorneys who have dealt with bankruptcies, especially chapter 11, multiple people close to the situation-possible buyers-and executives from other leagues, what we learned could surprise you.
Let’s first look at what it means to put your business in Chapter 11 bankruptcy. Companies do this in order to stop some of the debt from piling up while allowing the business to continue.
Take the airline industry. Many companies have filed chapter 11 after signing contracts with manufacturers for a certain amount of goods, only to realize they don’t need as many as they ordered. But if they simply cancel the order, they’re still on the hook for the balance. Filing Chapter 11 allows them to restructure and settle the debt at a lower rate. American Airlines did it in 2011, and came out with a merger.
Retail stores like JC Penney file, close stores, and keep going. What they don’t do, is wipe out the infrastructure, with the intention of continuing their business.
This is not the standard Chapter 11 filing. Our contact told us, this is more like Chapter 7, as the firm handling the bankruptcy, Houlihan Lokey, says the business will be sold, either as a whole or in pieces.
This is why it’s curious as to why McMahon fired everyone, filed bankruptcy, and set the league for sale via auction. The way it was done, sudden. No warning to any staff. Pollack may have known, but it’s proven that 2021 business was still being planned the day before the shutdown and termination.
None of the creditors were alerted. No stadiums, vendors, coaches, or other contracted staff were told they were going to be laid off, or terminated. Just an email, the day of.
One of his creditors was quoted saying this:
“McMahon’s intentions are laid to bare when considering his decision to shutter the league and then advance debt to the company, rather than infuse equity, in the face of the many public statements and reports that McMahon was prepared to invest several hundred million dollars in the league and absorb significant losses over a several year period in order to ensure the ultimate success of the enterprise,” the objection reads. “Instead, seizing an opportunity to shed significant liabilities and at the expense of the many creditors and vendors that detrimentally relied on McMahon’s comments and commitment to backstop the league as it matured into a profitable enterprise, McMahon is the principal architect of a loan-to-own strategy that that would benefit him at the expense of unsecured creditors.”
Let’s not forget the firing of the Commissioner and CEO, Oliver Luck. Which promptly led to a lawsuit between Luck and McMahon for wrongful termination. Luck says he is still owed the remaining money left on his deal, upwards of $20 million. While McMahon gave flimsy reasons as to why Luck was fired. Just another reason why this supposed plan by Vince doesn’t fit.
Now let’s get to Pollack reaching out to the cities in regards to the leases. That’s just good business. One exec I spoke to said this would happen anyway. Someone would check on previous localities to make sure they could do business there again, or if they have to find another city.
The XFL already did that, with Orlando. The city was left holding the bag when the AAF folded. But it seems as though they were receptive to the being the relocation site of the Tampa Bay franchise. It was Pollack who called, simply because he’s a familiar voice, separated from McMahon. As it’s likely these venues are not keen on speaking to the man.
Especially if Vince is trying to continue with the XFL, owing money, asking to forgive the debt, while wanting to do future business? My insider says it’s unlikely to happen with McMahon involved.
Now to the $3.5 million proposal. Vince already pledged a loan in this amount, to whoever buys the league. Earmarked to pay back the season ticket holders.
It’s a great gesture, and a way to help smooth the fanbase they’re looking to spend money with the new league. What sense does it make to ask the people you already owe money to, to pay out money you have already pledged?
Look, I understand, McMahon’s name grabs attention. But to deduce that he’s trying to buy the league from the information we have is far too thin.
I’m not saying he isn’t trying to buy back the league. But what we know, doesn’t point to that at all. No one I talked to saw the connection. It would be more than just bad business practice for McMahon to try.
If the creditors really believe McMahon is trying to stay with the league, there has to more to the story. If there is, great. But if not, this makes no sense.
Which is a shame. The fans want spring football. But we’re not sure football wants McMahon.