Arena Football One has shut down all local business operations and services for all six of its teams, potentially signifying the end of one of the longest-running indoor football operations in the United States due to financial difficulties.
In a statement released Tuesday, the league office said it is still searching for ways to continue operations in the future, but also acknowledged it is laying off employees.
"These closures have resulted in the elimination of various staff positions and is a direct consequence of the current financial constraints facing the AFL, which include extensive legacy liabilities and a recent multimillion dollar litigation filed against the league by an insurance carrier that provided coverage for the AFL between 2009 and 2012," the league said in a statement. "Those liabilities, which are all related to prior league operations, severely constrain the league's ability to expand and operate."
The litigation that spurred the move was filed against Arena Football One by National Union Fire Insurance Company two weeks ago in New York Supreme Court in an effort to compel arbitration, alleging the league did not pay insurance premiums when National Union was the insurer from 2009 to 2012.
The suit alleges Arena Football One owes National Union over $2.4 million.
If the petition of arbitration is declined by a court, National Union has requested it be viewed as a complaint for breach of contract by the court, potentially leading to a lawsuit. The next appearance date for the petition is Dec. 18.
Six teams remained in Arena Football One for the 2020 season: Albany, Atlantic City, Baltimore, Columbus, Philadelphia and Washington.
The Arena Football League was initially founded in 1987, but financial issues forced it to suspend operations in 2009. It returned as Arena Football One, a rebranding that promoted a more modest economic model, the following year. It was so successful at one point that it created a developmental league, af2, which ended up in more minor league markets throughout the United States.
It also spawned several smaller, less-successful leagues that crop up around the United States yearly.
It was a league known for big-name owners, including for a time Jerry Jones, Lynn Swann, Gene Simmons of the band KISS, Motley Crue's Vince Neil and rock star Jon Bon Jovi. It's also known for launching the career of eventual Hall of Famer Kurt Warner. Ex-Washington coach Jay Gruden was also an Arena League alum.
Teams cycled in and out of the league throughout its existence, and it had as many as 19 teams during its heyday in the 2000s until the first play stoppage after the 2008 season.
The league is still holding out hope it can continue in some form in the future, perhaps this season.
"The AFL will continue to push ahead with efforts to identify solutions to address the aforementioned financial constraints," the statement released by the league said. "We have not yet made the final determination that it will be necessary to suspend all league operations, but we expect that decision to be made within the next few weeks.
"Should we not be able to move forward, we will issue information about all applicable refunds at that time. We are exploring every possible avenue to continue bringing AFL football to our fans, including further evolutions to the current business model, and are engaging with prospective investors and supports who are interested in seeing the league continue to grow."
Arena Football One is the second well-known minor league football outfit to shut its doors this year. The Alliance of American Football, which began its first season in February, shuttered midway through the season in April because of financial concerns.
The XFL, another outdoor startup league financed by WWE chairman/CEO Vince McMahon, is scheduled to begin play in February.