The Arena Football League had already cancelled there 2009 season which was set to run over the summer months and be aired on ESPN. However this league had a lot of big problems, an out of control spending spree on players in certain cities, and a low fan turnout in most cities not named Chicago. Now word has leaked out that the AFL will cease all operations and file for Chapter 7 bankruptcy which is a liquidation of assets.
Many would have Arena Football fans believe that this is the end of the Arena football style game, however nothing could be farther from the truth. The AFL2 is yet another arena league run by the same masters of the AFL but with an updated business model. AFL 2 teams are placed in mid market cities that have no NFL representation, and have little other live sports choices. For example the City of Toledo, Ohio recently built a new arena to house a minor league hockey team, and an AFL 2 franchise. Since Toledo is an hour from Detroit, and two hours from Cleveland it is close enough to population centers to be a draw.
The AFL is now a defunct football league with a very rich history of over 20 seasons. They survived so long by not competing directly with the NFL, and by offering a different kind of football product. The NFL even went as far as to allow it's owners to purchase and market AFL teams within their own markets. The NFL has rules against majority owners owning other professional sports teams.
In the end though it was these things that killed off the league. The game was so different that many hard core NFL fans didn't like it. When the NFL owners stepped in to own AFL teams that spent money as they did in the NFL and this led to a massive overspending on talent. On top of that this league had a hard time getting a team going in New York City, Detroit, and other big football markets. that made it an unattractive to TV executives and even with stints on NBC and ESPN the league couldn't get his business model to produce profit.