Is the Arena Football League Filing Chapter 7 Bankruptcy?

The Arena Football League’s financial future has been cloudy for some time, but now a permanent end is seeming more likely.

Last December, the AFL canceled their 2009 season in hopes of buying time to reorganize their business model in time for the 2010 season. Then in April the league’s interim-commissioner – who was filling in following the abrupt resignation of the only other head of the league after the 2008 championship game – resigned. The Los Angeles Avengers franchise folded, too.

This week, the league announced that it is suspending league play indefinitely, according to the AP, New York Times and other outlets.

In the wake of this news the Atlanta-based Georgia Force – owned by Art Blank, who also owns the NFL’s Atlanta Falcons – also folded. And here speculation about a Chapter 7 bankruptcy began to run high.

Filing Bankruptcy May be on the Way Despite More Exposure

According to the New York Times, the league is $14 million in debt, and most teams were losing money at the time of the shutdown. Other economic factors have hurt the outside businesses of team owners as player salaries and team costs have rapidly grown.

This is despite a higher profile for the 12-year-old league in recent years thanks in part to television deals with NBC, and a newly signed ESPN contract; support from the NFL; and high profile owners, such as Jon Bon Jovi, John Elway and Dallas Cowboys owner Jerry Jones.

But the high debt could mean that creditors and courts could force the league to file Chapter 7 bankruptcy, which would force the league to sell off any valuable assets, which might include all sorts of football gear and operations equipment.

But so far, no definite action has been taken. Even the former players are left in the dark. For now, like the season, everything seems indefinite.