So I want to take a minute and explain the difference between the XFL and AAF bankruptcies because they are not the same thing at all and people are trying to make them the same.

The way I understand it is this (and anyone more well-versed in financial literacy is more than welcome to correct any mistakes):

On one hand you had the AAF- good product, very poor business model. Most new businesses expect to loose money in their infancy...

This becomes problematic when you don’t even have money to lose in the first place which is where it went wrong for the AAF. They never had the funds and lied about it. Once they could no longer cover this up they had to shut their doors, but naturally people wanted their money.

Again, problematic when you never had it in the first place and so they filed a chapter 7 bankruptcy. Essentially (and this is overly simplified) they sold everything off (equipment, gear, computers, etc) to attempt to make a dent in the money they owed.

Any remaining debt gets “forgiven”, but it leaves the company with absolutely nothing making a comeback impossible without completely starting over. This is why you’ll never see the AAF comeback unless they rebrand and even then big eye roll

On the other hand there is the XFL- good product with a good business model. They essentially had a big, established brand/company backing them (WWE) and helping with any finances they weren’t able to cover while they established themselves.

Unfortunately there isn’t much you can do when a crazy virus not only shuts the new venture down, but the established one as well, drying up funds.

There is still a lot of money there, but when you’re in a place where you aren’t currently making more money to replace what is used by the new league- you risk losing both businesses trying to keep the new one afloat which is dumb.

In this odd situation the XFL had to be shutdown in order to preserve the more established business until things get back to “business as usual”. However, people still want their money, and while you have it, you need to protect yourself with the uncertainty of the moment.

Enter the chapter 11 bankruptcy the XFL filed. They will keep all their assets (equipment, gear, computers, etc), but work w/creditors to restructure their debt so its more manageable. AKA they will be coming up with some sort of payment plan to eventually pay everything owed.

This method essentially keeps the company intact allowing for an eventual return (if they wish) when all their debt is cleared and money-flow/funding is “normal” again.

Again, this is a very dumbed down explanation. There are a lot of smaller moving parts, but gives at least a basic idea of why these league collapses are not even remotely comparable outside of the gut-punch to their employees.