While the XFL has pivoted from version 2.0 to 3.0, two key figures from its past—former owner Vince McMahon and former commissioner and CEO Oliver Luck—continue to wage an acrimonious battle in federal court. Their litigation recently expanded with Alpha Entertainment, of which McMahon has served as chairman and CEO, countersuing Luck.
Last year, Luck sued McMahon and Alpha in Connecticut federal court for breach of contract, seeking at least $23.8 million in damages. McMahon fired Luck, ostensibly for cause, on April 9, 2020. If enforceable, the “for cause” designation would relieve McMahon and Alpha of the obligation to pay. Three years ago, Alpha lured Luck away from his position as NCAA executive vice president and signed him to a five-year contract valued at $35 million.
The “for cause” designation was predicated on several grounds. They included Luck signing, and then declining to promptly release, former Cleveland Browns wide receiver Antonio Callaway. Callaway allegedly failed to meet the XFL’s subjective requirement of being a “quality player with good character.” Luck is also portrayed as misusing his XFL-issued iPhone for personal matters and relocating to Indiana—far away from the XFL’s headquarters in Connecticut—when the coronavirus pandemic struck. A crucial consideration: whether these reasons legally justify a “for cause” firing or whether they’re exaggerative, pretextual and insufficient.
Luck, an attorney by trade and the father of former Indianapolis Colts QB Andrew Luck, stresses that McMahon pledged to “irrevocably and unconditionally guarantee” that Alpha would pay. Luck views the “for cause” designation as an illegal ruse to avoid paying.
Judge Victor Bolden sidelined the case last summer in the aftermath of Alpha, citing more than $50 million in liabilities, filing for Chapter 11 bankruptcy and seeking a new owner for the XFL. As first reported by Sportico, RedBird Capital CEO Gerry Cardinale, WWE star Dwayne “The Rock” Johnson and businessperson Dany Garcia purchased the XFL for $15 million, plus assumption of certain liabilities (but not the risk of liability in this case—that remains with McMahon’s group). The new version of the XFL is expected to play games in 2022.
Judge Bolden reactivated the case last November. A few weeks ago, Alpha countersued Luck for breach of contract and breach of fiduciary duty (including duties of loyalty, good faith, honesty, obedience, care, competence and skill). The countersuit attempts to portray Luck as derelict in his job.
To that end, the countersuit charges that Luck “abandoned” his post and effectively went AWOL. The countersuit itemizes alleged grievances, including:
- Luck “abruptly left the XFL’s headquarters in Connecticut and disengaged from the XFL’s Operations.”
- “Luck did not seek or obtain the approval of McMahon to leave the XFL’s headquarters on March 13, 2020 and not return to Connecticut.”
- “Between March 13, 2020 and his termination for cause on April 9, 2020, Luck did not personally call McMahon or speak directly with him.”
- “After March 13, 2020, Luck did not send McMahon any report regarding his daily activities or his weekly activities.”
- “After March 13, 2020, Luck failed to attend important meetings of the XFL’s COVID-19 Working Group that were held by videoconference.”
- “Luck did not participate in the XFL’s COVID-19 Working Group meeting held by videoconference on the evening of March 15, 2020.”
- Luck is also alleged to have missed working group meetings on March 18, 20, 27 and April 1.
Whether these characterizations are accurate, both objectively and contextually, remains to be seen. For instance, even if Luck didn’t “personally call” McMahon, it’s possible the two emailed or texted, or that Luck was in communication with McMahon’s staff. It’s also unknown whether Luck and McMahon regularly spoke by phone before the pandemic. If not, the absence of them speaking in March might not be legally meaningful.
Much of the countersuit centers on the iPhone Alpha assigned to Luck. The former commissioner is described as making personal calls and sending texts and emails “that were unrelated to the business of the XFL.” He is also accused of taking nearly a month to return the iPhone, with data having been deleted and with a refusal to reveal the passcode. Even taking Alpha’s depictions as true, their significance is uncertain. Was Luck ever warned or reprimanded about his supposed iPhone malfeasance, or is Alpha merely offering an ex post facto rationale? Were other employees assigned iPhones and, if so, did they misuse them for personal use and were there employment repercussions?
The two sides continue to file briefs that sharply critique the other. In a Jan. 25 filing, attorneys for Luck asserted that Alpha and McMahon “deliberately engaged in a bad faith, sham termination for cause … designed to evade McMahon’s obligations [to pay].”
A trial date has been scheduled for Oct. 8, 2021. There’s a good chance that Luck and McMahon avert a trial by negotiating a settlement. Logical terms: Luck being paid a portion of his demand in exchange for relinquishing his claims and agreeing to non-disparagement language. Both have reasons to value closure. Luck is rumored as a possible replacement for Larry Scott as Pac-12 commissioner. McMahon, whose net worth is reportedly $2.1 billion, would probably prefer to cement the end of his second—and presumably last—XFL chapter.
With assistance from Scott Soshnick.
