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It turns out Silicon Valley cannot disrupt the National Football League

A much-hyped football league — or a much-hyped tech company — has failed spectacularly.

College football star Johnny Manziel.
Johnny Manziel, the college football star, wasn’t enough to keep the Alliance for American Football afloat.
Derek Leung/Getty Images

Professional sports leagues, it turns out, are pretty hard to disrupt.

The Alliance for American Football, a venture capital-backed offseason alternative to the NFL, crashed and burned Tuesday for a familiar reason: It ran out of money.

And like startups often do, the young company reportedly became mired in a management tussle between executives who had different visions of what their project could become.

The league is the latest to join a graveyard of NFL rivals, which seem to never get enough traction with fans or support from investors to take on a dominant incumbent that earns close to $15 billion a year in revenue. While the NFL has had troubled ratings in recent years — and somehow fallen into the cross-hairs of both Donald Trump, who has accused the league of going soft, and activists who see white, wealthy owners blacklisting players like Colin Kaepernick — it is hard to displace a national institution like a sports league.

The league was backed by familiar names in Silicon Valley like Founders Fund, the venture capitalist Keith Rabois (in a personal capacity), and Peter Chernin, the Hollywood media executive. While not a tech company per se, it had some tech panache: Investors saw a big addressable market by scheduling games outside of the regular season, and the league put in-game sports betting and other tech-enabled experiences at the forefront of its revenue model.

“Look, you can’t raise money to launch a football league. Anyone who tells you they can is lying, unless you’ve got a quixotic billionaire who just wanted to spend all of his money,” the league’s founder, Charlie Ebersol, once told the Philadelphia Inquirer. “We raised money as a technology business,” before using all the right buzz words: “The actual business is data, data compression and data delivery manifestation, or artificial intelligence or machine learning.”

And for a moment, it looked like the league was on track to succeed — especially over the last few weeks when the AAF recruited Johnny Manziel, an electric college football quarterback who famously flamed out once in the NFL, to join the league. If the league needed pizzazz, “Johnny Football” had it in spades. Surely it could at least finish its first season of games.

But games, airing on CBS, were still topping out at about 500,000 viewers a game — down from about 3 million at one point. And behind the scenes, there was reportedly a power struggle between the league’s founders and the league’s new funder, who had different ideas about how the AAF should work with the NFL.

Was the AAF a feeder for the NFL? Or a rival?

Tom Dundon, a sports executive who funneled $70 million of his money into the league as of a few weeks ago to acquire a majority stake, reportedly wanted the league to immediately become a funnel to the pro leagues. Ebersol and his co-founder Bill Polian reportedly wanted to wait a few years before creating that minor-league relationship.

Dundon reportedly pledged $250 million at the outset, but he appears to have pulled the remaining funding. Pro Football Talk reported that the league required about $20 million more to operate for the final two weeks of the regular season.

But now, they’ve all got nothing. League operations are expected to be suspended by the end of the day on Tuesday.

That’ll leave a long trail of players, coaches, investors, and fans processing this spectacular crash. And a nation turns its lonely eyes to Manziel.

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