John O’Brien worked hard in the off-season to restore some vitality to the American League. He added new teams in Troy, New York, Wilkes-Barre, Pennsylvania, and a team in Washington, D.C. backed by the Heurich Brewery, the first company-sponsored team in the league. The league president did away with the split-season format of the past five seasons, and placed all eight teams in a single season competition for four playoff spots.
In a final move just before the season began, the New York Celtics squad was transferred to Kingston, NewYork where longtime owner-coach Pop Morgenweck had been forced to give up his franchise because of ill health. The change in address proved invigorating. With virtually the same team that had sleepwalked through the 1937-38 season with two fifth-place finishes, the Colonials won 28 of 35 games. Playing under the tutelage of veteran pro Barney Sedran and behind the strong rebounding of Nat Frankel and CCNY rookie Bernie Fliegel, Kingston handily won first place. The Philadelphia Sphas finished second with a team that featured rookies Pete Rosenberg and Mike Bloom, an All American from the NIT champion Temple University team. Jersey took third place, despite being burdened by a bitter season-long feud between stars Moe Spahn and Phil Rabin. In New York, the Jewels performed listlessly for most of the season, but still easily captured fourth place and the final playoff spot.
First and second place Kingston and Philadelphia entered the playoffs as strong favorites to meet in the post-season finale, but both were unexpectedly derailed. Kingston was ousted 39-36 in the deciding third game of a semi-final series by the defending champion Jersey Reds, while the Sphas went down in two straight games to a suddenly tenacious New York squad. The Reds faced the finals handicapped by the loss of their leading scorer Phil Rabin, who was out with a wrist injury. In the opener of the best-of-five game championship series, Jersey took a 28-19 lead into the third period, but the Jewels outscored them 15-2 down the stretch to capture a four-point victory. The Jewels wrapped up the series with two straight three-point homecourt victories to capture their first ABL championship.