New arena league bids $6.1M for AFL assetsPublished December 7, 2009
The assets of the bankrupt Arena Football League fetched $6.1 million in a recent auction between two competing bidders.
The winning bid was submitted by AF1, a new startup indoor football league led by Jerry Kurz, who was a co-investor in the original AFL. The auction took place on Nov. 25, with the bidding starting at $2.5 million. AF1 won the bidding against another investment group called Acquisition Holdings.
While the auction is closed, the sale of the league’s assets is not final until the completion of a sales hearing set for today when the money from the AF1 bid is due. It is possible that Acquisition Holdings, or any other interested group, could still buy the AFL by showing up at the sale with money exceeding the amount of the winning bid.
“The auction is closed but not complete until the sale hearing,” said Diana Casas, senior director of Moglia Advisors, which was appointed as trustee by the Northern District of Illinois U.S. Bankruptcy Court to sell the AFL assets. “If another bidder showed up with a bid higher than the AF1 bid, I would expect the trustee would ask the presiding judge to open it up if it is substantial.”
Among the AFL’s assets is its intellectual property, including the names and logos of the league and all of its teams.
Tulsa-based AF1 is planning to play in 2010, and the successful acquisition of the AFL’s assets would allow the league to use previous AFL teams and logos. To date, AF1 has announced plans to play in at least 16 markets, including Chicago, Salt Lake City, Phoenix and Orlando. More teams are expected to be added should the league close on its purchase of the AFL’s assets.
The AFL canceled its 2009 season after 22 seasons, citing financial problems. The league was sent into forced Chapter 7 bankruptcy and then in late August, it successfully filed to move into Chapter 11 protection.
Proceeds of the $6.1 million bid are earmarked for Fifth Third Bank, which is owed $7.7 million and is the largest secured creditor named in the AFL’s Chapter 11 filing. Other large non-secured creditors include NBC, which is owed $1.59 million. Former AFL Commissioner David Baker is owed $985,000, while former TV rights holder NBC is owed $540,000.
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