Today Alpha Entertainment LLC, the parent company of the XFL, has declared Chapter 11 bankruptcy.
Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets. Named after the U.S. bankruptcy code 11, corporations generally file Chapter 11 if they require time to restructure their debts. This version of bankruptcy gives the debtor a fresh start.From investopedia
One interesting tidbit from the filing was this line.
Mr. McMahon has recused himself from the consideration and approval of any post-petition financing since he is a potential source of such post-petition financing;
If you thought the door was closed on the XFL venture, why would that line be added to the document? Also, companies like Apple, General Motors and Marvel Entertainment to name a few, have recovered from Chapter 11.
Statement From The XFL On Bankruptcy
“The XFL quickly captured the hearts and imaginations of millions of people who love football. Unfortunately, as a new enterprise, we were not insulated from the harsh economic impacts and uncertainties caused by the COVID-19 crisis. Accordingly, we have filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code. This is a heartbreaking time for many, including our passionate fans, players, and staff, and we are thankful to them, our television partners, and the many Americans who rallied to the XFL for the love of football.”XFL
Some notes from the filing
- Estimated # of creditors: 1k-5k
- Estimated assets: $10m-$50m
- Estimated liabilities: $10m-$50m
- World Wrestling Entertainment, Inc owns 23.5% of Class B Interests
- Vincent K. McMahon owns Class A: 100%, Class B: 76.5% Interests
People or entities the XFL owes money too;
- Bob Stoops ($1,083,333.33)
- Mark Trestman ($777,777.78)
- Jonathan Hayes ($633,333.33)
- Winston Moss ($583,333.33)
- Kevin Gilbride ($583,333.33)
- June Jones ($583,333.33)
- Jim Zorn ($583,333.33)
- 47 BRAND ($846,000.00)
- St. Louis Sports Commision ($1,600,000.00)
You can read the full document here
Blame this 100% on the COVID-19 pandemic. It forced the league to shut down after 5 games causing the XFL to lose tens of millions in revenue. With no clear end of the pandemic insight, Alpha Entertainment was left with no choice.
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If our President can file for bankruptcy 5 or 6 times and still be a billionaire, then hopefully this league can get things figured out and back in the field in 2021.