Brent Schrotenboer | USA TODAY

USA TODAY Sports

Rich people sometimes aren’t very smart. Even the ones who didn’t inherit their fortunes make bad business decisions, as evidenced recently by Tom Dundon, the billionaire investment honcho.

Dundon at first said he was committing $250 million to the Alliance of American Football, a new pro football league that launched in February.

He said then that his investment commitment would be enough to fund the league for “five years, something like that.”

Jason Getz, USA TODAY Sports

Then after the league’s television ratings sagged during prime college basketball season last month (not surprisingly), he complained that the NFL Players Association wouldn’t grant him access to its worst players (not surprisingly).

So he pulled the plug this week, only about six weeks after he bought a controlling stake in the league, a move that suspended its operations and stranded hundreds of players, coaches and staff in eight cities.

Didn’t Dundon know that such an operation likely would lose hundreds of millions over several years before it had a chance to stand on its own two feet?

Did he really think the league's future success required having access to NFL practice squad players and third-string quarterbacks – players many fans never have heard of?

Similar alternative pro football leagues historically have crumbled under the weight of heavy upfront costs and the crushing shadow of the NFL.

But that doesn't mean it's an impossible code to crack. Ask the XFL, another new pro football league that is being relaunched next February by Vince McMahon, the pro wrestling mogul.

To fight these mortal threats, McMahon understands several fortifications are required, including media exposure and a strong stomach for investors, who need to be willing to bleed money for years before any chance at a payoff.

He learned this from experience, after his original XFL folded after one season in 2001. Nearly two decades later, he has plans to plant at least $500 million of his own seed money in hopes of future growth. A TV deal is expected soon.

Charlie Ebersol, the co-founder of the AAF, also knew about the need for a long runway. He told USA TODAY Sports before the season that “you’re going to lose hundreds of millions of dollars before you get to profitability.”

Heck, even Dundon seemed to know this, sort of. He told USA TODAY Sports in February that “it's going to cost money to get it there, but it's a better investment than most in terms of venture capital.”

He already spent around $50 million before he bailed, just days away from another nationally televised AAF game on CBS (now canceled). Such heavy losses in such a short time fueled speculation that he all he really wanted was the advanced gambling data technology being developed by the league. But that's not his to take. Casino giant MGM invested in that and had an exclusive license to it.

So then what happened?

In one respect, his desire for fringe NFL players made some sense. With the XFL and the Pacific Pro Football league set to start next year, the AAF was facing considerable competition, in addition to having lost lots of money already. Having some sort of arrangement with the NFL might seem to give the AAF some protection from this competition – if the NFL had at least some interest in an official relationship with the AAF as a developmental league.

But the NFL doesn’t really need that, not when college football fills the same function for free.

By contrast, the XFL is taking a broader approach to player supply. Unlike the AAF, the XFL is not ruling out the pursuit of early college players who might be pro-ready but not yet eligible for the NFL. There also are hundreds of former college players willing to play for money.

“We think there is a very broad and rich and deep player pool, quite honestly,” XFL commissioner Oliver Luck told USA TODAY Sports in February.

The XFL also has time to get its shop in order. In January 2018, McMahon announced he was reviving the league, two years before its first game in February 2020.

Ebersol chose a quicker path, hoping to beat the XFL to market by launching this year, less than a year after announcing the league’s formation in March 2018. Playing with a hurry-up offense, Ebersol apparently couldn't come up with enough investment money, at least until Dundon came along in February to prop the league up for a few weeks before deciding to cut his losses.

Meanwhile, McMahon last week sold around $270 million of stock in World Wrestling Entertainment to help fund the XFL. Luck, the former president of the defunct NFL Europe league, said one reason he joined the XFL was “there’s one guy creating the capital" and putting his money on the line, not multiple investors with multiple agendas.

With the AAF, Dundon essentially became the “one guy creating the capital.” The difference with the XFL is that McMahon seems willing to lose as much as he’s pledged and isn’t fazed by the foreseeable risks in the short term.

Whether that’s a smarter bet than Dundon’s is still an open question.