While a minority of the football-hungry public embraced the Alliance of American Football to varying degrees simply because they were excited about the prospect of another viable professional American football league—which turned out to be anything but on the business end—there was significant outside interest in the league because of another reason: a gambling app that it had pioneered.
According to a Pro Football Talk article, the AAF is said to have spent around $40 million, if not more, creating the app, which allowed users to analyze games in real time in a number of different ways and place bets. There was even a feature that allowed one to predict play calls.
We now know at this point that this app is the thing most likely to be its most tangible lasting legacy, and it was thought that a scramble to acquire it would take place. Many assumed that Tom Dundon bought in in large part because he wanted to exploit that technology.
He didn’t get it. MGM did, and reportedly, the company only paid $125,000 for it—which is dramatically less than what it cost to create it, to say the least. MGM actually paid the AAF $7 million in a secured interest for the technology already last year, but that claim has been reduced to $5 million, so they saved even more on the back end.
The article notes that the AAF and MGM agreed to an “irrevocable” license for the intellectual property behind the app on the day before Dundon folded the league. If you were so inclined, I’m sure that you could read something into the timing of those two events coinciding one right after the other.
According to Dundon, however, he was misled into believing that an initial $70 million investment would not only carry the league through its inaugural season, but also help jumpstart the next. Instead, his $70 million only ran the course of where they got. If the league were to have another week, he would have had to put forth more money, so pulling it when he did was very much a practical matter.
What will MGM end up doing with its newly-acquired technology? That remains to be seen, but it’s a safe bet to wager that they will continue to develop the current structure and attempt to pitch it to other leagues to adapt to their own framework. It probably won’t be the NFL, though, or at least I wouldn’t assume so.
