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Originally Posted by Observer Newsletter
The story going around was that Luck, the top guy in the XFL, was completely blindsided by both his firing and the subsequent folding of the league and was kept in the dark regarding any decisions that didn’t include starting back up next spring. The belief is the only people who knew ahead of time were those in the WWE Board of Directors who McMahon consulted with before pulling the plug on the league on 4/10.
On 3/20, Luck and XFL President Jeffrey Pollock, after the decision was made to cancel the rest of the 2020 season, sent out a message about returning to play in the spring of 2021.
Those in the company for the next few weeks were told to prepare for the resumption of play in the spring and plans were made for season two. Luck’s firing was kept secret, but the first sign came late that night when the league announced that all 2021 season ticket money along with 2020 ticket money from fans who didn’t ask for refunds but instead wanted the money applied to 2021 tickets would be refunded. That appeared to be a sign that plans had changed regarding a 2021 season, and logically if that decision was made, the league was done.
The XFL blamed the uncertainties caused by COVID-19 for the death of the league and in the bankruptcy filing, Pollock said the uncertain duration f the pandemic was a key factor in the decision to close the league down.
A Sports Business Journal story said the cancellation of the remainder of the season cost the company $27 million in lost live event and merchandising revenue.
The losses, as of 2/29, had hit $44 million, far lower than most expected, given the first XFL lost $139 million in its first season. The company spent $58 million on $14 million in revenue. The lower than expected losses would seemingly indicate Luck was doing a good job controlling costs. The amount he really put in was clearly much lower than most anticipated because at the end, instead of putting more money in, he loaned the company money at the end for last few payrolls so that the last few payroll monies would make him a creditor.
The number would probably be significantly higher after a few more weeks of the season but the numbers couldn’t touch McMahon’s $389 million of stock he sold to fund the league or his pledge of $500 million that was expected to last three-to-five seasons.
After McMahon made his two loans to the XFL to cover the last two payrolls and establish himself as a debtor, there was $5.6 million in cash on hand at the time of the bankruptcy. The amount of money owed was said to be between $10 million and $50 million.
The story indicated that the losses were expected and that the company had met its business goals up to that point in time.
Evidently communication within the league became less and less, including a 3/27 meeting where all the key league management personnel were scheduled, then being canceled with no explanation.
On 4/2, Pollack met with McMahon. The story said that nobody knew what the meeting was about but the belief was it had to do with the second season. Among the things believed to have been talked about was moving the Tampa Bay Vipers to Orlando and having the New York Guardians move from MetLife Stadium, which holds 82,500, to Red Bull Arena, which has a 25,000 seat capacity.
The team presidents had a meeting on 4/8 where they were told about returning all season ticket money deposits for 2021, one day before the story broke.
So there were people at that point thinking the obvious, that returning season ticket money meant the league was done.
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