About a week ago, rumors about a possible matchup in 2012 between Michigan and Alabama started to surface. At that time they were still in the "I read it from a guy on a message board who heard it from some radio station" phase, meaning there wasn't a whole lot of credence behind it. Shortly thereafter, however, the rumor started picking up serious steam and appeared to be more than just a rumor when mgoblog reported that a contract signing was set for this past Monday.
As it stands right now, it is unknown if a contract is going to be signed in the immediate future, and Michigan officials have declined to say a whole lot about the rumor. Even so, it does look like things are moving in the direction of a game being scheduled, as evidenced by this report from Angelique Chengelis.
Still, another source involved in the negotiations, but not as a representative from either school, has indicated the deal is not done, but Michigan and Alabama are working on the matchup. The source said the teams want to control when the announcement is made if the game is finalized.
That last sentence is the most interesting thing to me, because it may say a lot about the "nothing is imminent" denials Michigan gave earlier this week. If this matchup does actually happen, you can bet that Michigan, Alabama, ESPN, Cowboys Stadium and whoever else is involved will want to make the announcement on their terms, not have it leak out prematurely on a blog. If that is in fact the case, then it would be similar to the announcement that happened earlier this year about the Notre Dame night game in 2011. Word of that leaked out but was met with a "nothing is close" type of response, yet days later an official announcement was made by Michigan.
Right now it appears that Michigan and Alabama are working out the final details of a deal to play in 2012, and it probably is only a matter of time until the matchup becomes official. From mgoblog:
My source re-iterates: it is happening, with all three parties set on an agreement and just waiting to announce it when everything gets dotted and crossed.
Although last-minute issues could always come up and become an obstacle for a deal getting finalized, I would bet we hear something official one way or the other pretty soon.