Wild Lawsuit Filed By An Entrepreneur Who Claims 50% Of The AAF
A massive, ninety-two page Complaint that includes ten causes of action has been filed against TV and film producer Charlie Ebersol and the parent company of the Alliance of American Football (AAF). In it, Robert Vanech complains that he is entitled to a 50% ownership interest in the league that recently secured a $250 million investment from Carolina Hurricanes majority owner Tom Dundon. Vanech also wants the court to declare that his consent is required to approve that $250 million commitment.
The Complaint begins by stating that Ebersol “has been peddling a fictional tale regarding the genesis of the AAF that only a Hollywood storyteller could conceive.” Vanech continues by claiming that Charlie Ebersol conspired with his father Dick Ebersol and others to oust Vanech from a 50/50 partnership with Charlie Ebersol through a series of deliberate, fraudulent, intentional, wrongful and deceptive acts.
Vanech says that the AAF was his idea, and that he approached Charlie Ebersol in February 2017 about creating a new football league. They allegedly discussed the fine details that included the creation of a fully integrated mobile phone application, use of biometrics and big data, a proprietary fantasy concept, etc.
According to Vanech, it began with a text he sent to Ebersol.
“I know how to make [XFL] 2.0 work . . . Lets get into business together. I know how to raise the money, too.”
Vanech says that they later met at Ebersol’s Beverly Hills office, which is when they agreed on an arrangement to split equity, profits and losses, as well as decisions regarding control over operations and equity, concerning this concept league. It was first called XFL 2.0 and then “Project Phoenix” before ultimately being named the AAF.
They purportedly came to this agreement based on a handshake. That handshake, which has now resulted in a massive lawsuit pending in the Superior Court of the State of California for the County of Los Angeles, supposedly contemplated not only equity ownership in the league, but that Vanech would serve as COO and CFO. It also puts the validity of the recent $250 million commitment in question, since Vanech states that his approval was required to sell or award equity in the league.
Emphasis is placed on Vanech’s creation of a business plan and/or funding pitch, with Dick Ebersol’s input. His Complaint essentially seeks to prove that no sound-minded person would put in all of the work to create such an in-depth plan without an understanding that he was a part of the financial equation. Vanech says that the plan was shared with potential investors and partners, and specifically refers to Charlie Ebersol and Vanech being part of the league’s “Founding Leadership Team” with Vanech as “COO & CFO.”
Much of the Complaint is dedicated to describing Vanech’s tight relationship with Charlie Ebersol, with Ebersol constantly referring to Vanech as his business partner, involving him in all aspects of the business and talking about the startup football league as their joint venture. Vanech says that all changed in May 2017, when Ebersol told him that he should not be the COO. Between May and June of that year, their relationship deteriorated and Ebersol essentially “ghosted” Vanech. In a July 5, 2017 text, Ebersol told Vanech that they never had an agreement at all.
Vanech apparently has deep pockets to see this case as far as the court will allow him to take it. He discusses his two decades worth of chief-level expierience, as well as being responsible for raising over $200 million for companies in which he was a founder or a chief-level employee.
The AAF released the following statement on Vanech in response to the lawsuit:
“Mr. Vanech’s claim is without merit. There was never any agreement, oral or written, between Mr. Vanech and Mr. Ebersol relating to The Alliance. We remain focused solely on our historic, inaugural season when each weekend over 400 players get an opportunity to showcase their talents and fulfill their dreams of playing professional football.”
There certainly was never a written agreement, as Vanech admits that the agreement was based on a handshake. Interestingly, Vanech claims that the handshake had special meaning, since it was purportedly how the original XFL was created. However, one would think that someone who has had over twenty years of chief-level experience and has had a role in raising over $200 million for companies would know better than to rely on a handshake to memorialize such an important business arrangement.
This could end up being a tough case for Vanech to prove, unless there is some communication or documentation that he is able to find from Ebersol in discovery that serves as a smoking gun. Further, just because someone comes up with a concept does not mean that the individual is required to be compensated. While Vanech certainly tells a story that seems to indicate he was part of Charlie Ebersol’s efforts to create the AAF, he still has a legal burden to satisfy in order to get the serious relief he requests.
That is why people protect their intellectual property and/or require documents such as non-circumvention agreements, as opposed to merely relying on a purported handshake for protection. It is a nice story to say that a business relationship was built on a handshake, but it is not worth the negative consequences should a major dispute erupt. For what it is worth, Ebersol says there was never even a handshake.