Vince McMahon’s XFL Files for Bankruptcy Amid Pandemic Shutdown
By Cynthia Littleton
LOS ANGELES (Variety.com) – Vince McMahon’s XFL has filed for Chapter 11 bankruptcy, a move that had been expected after the startup football league was forced to cut short its comeback season amid the coronavirus lockdown.
In a Delaware bankruptcy court filing, the XFL listed $10 million-$50 million in debts and an equal amount in assets. When the XFL ended its season last month, the league vowed to pay all player salaries for the 2020 season and that it would play “a full season in 2021 and future years,” although XFL CEO Jeffrey Pollack reversed that position last week.
WWE chief McMahon controls the XFL as a private entity. WWE, the publicly held wrestling empire that McMahon controls, owns a 23.5% stake in XFL. McMahon has advanced the XFL a total of $9 million during the past month to help the company meet its payroll. As of Monday, XFL’s cash on hand stood at $5.6 million.
In the filing, the XFL claims it was forced into seeking a Chapter 11 sale process by the wallop caused by the March 20 cancelation of the football season that bowed Feb. 8. That move cost the league “tens of millions of dollars in revenue,” the filing states.
“The impossibility of knowing when the pandemic would sufficiently abate and allow the league to restart only exacerbated the problems posed by the Debtor’s abrupt loss of revenue and continuing operating expenses. After considering all available strategic options, the Debtor and its professional advisors determined that the best course to preserve and maximize the value of the Debtor’s estate is through a chapter 11 sale process,” the filing states.
The company’s biggest creditor is St. Louis Sports Commission, which is owed $1.6 million.
McMahon created the XFL in 2000 as an edgier and rougher alternative to NFL football. The league folded after its inaugural season in 2001. In 2018, McMahon surprised the industry with his determination to relaunch the league this year as a private venture. The XFL scored TV rights deals with Fox, ABC and ESPN. The comeback season featured eight teams: the DC Defenders, Dallas Renegades, Houston Roughnecks, Los Angeles Wildcats, New York Guardians, St. Louis Battle Hawks, Seattle Dragons and the Tampa Bay Vipers.
Through February, the XFL generated about $14 million in revenue and net losses of about $44 million, per the filing.
The company had about 400 employees and 500 players on its payroll. As of April 10, XFL fired all but 18 employees.
