The Washington Football Team’s ownership will be consolidated within one family after the NFL’s other owners give their expected approval to an agreement reached this week between Dan Snyder and his minority partners.
Snyder, the team’s majority owner, held 60% of the team among himself, his mother and his sister. The other 40% was held by three investors — Dwight Schar, Robert Rothman and Frederick Smith.
The relationship among the three and Snyder turned frosty during the past year, and Snyder sued in an attempt to stop them from selling their shares to a California investor, invoking a right-of-first-refusal clause in the contract.
The agreement, which was reached outside court, will allow Snyder to purchase the 40% for $875 million, according to a source.
Here’s what it means in the drama surrounding the team:
Why is the value so low? If the entire franchise sold, its estimated worth would be closer to $3 billion, and potentially as high as $5 billion. This sale of minority shares comes with no voting power, and no day-to-day authority, meaning the shares were sold at a discount.
How will Snyder finance the deal? NFL rules require sales to take place primarily in cash to protect against a bank claiming ownership of a team if a loan goes unpaid. Snyder will ask for special permission from the league to take out a $450 million loan to finance the purchase.
He’ll receive that approval, in part, because of his standing as the majority owner — defaulting on that debt would not put the club’s ownership in jeopardy, nor is it likely to happen given the guaranteed revenue streams that come from owning an NFL franchise.
Will the owners approve the deal? A three-quarters majority vote is required at next week’s league meetings, but it would be a shock if the deal and the financing aren’t unanimously approved. The league almost never puts items up for a vote without the full consent of ownership.
What about the Wilkinson report? Attorney Beth Wilkinson continues to investigate the allegations of sexual misconduct within the team’s upper management.
An NFL spokesman told The Times-Dispatch that the sale and the Wilkinson report are “two separate matters,” and said the Wilkinson report is “ongoing.”
Does this change how the team is run? No. Snyder already had full control of the team, so his power in the building remains firm.
What if Snyder is forced to sell the team? Wednesday’s news potentially makes it easier for the NFL to navigate a sale of the Washington Football Team.
Traditionally, minority owners are given first crack at buying a team if it goes on sale, but in the case of Schar, Rothman and Smith, that would have been a contentious process, given that they alienated the league’s other owners by going public with their grievances with Snyder. The league encourages all business to be handled in-house.
Would Snyder sell the team? Almost certainly not voluntarily. The team is wildly profitable, and it is a core part of Snyder’s identity.
The last instance of an NFL owner selling amid controversy was Carolina’s Jerry Richardson. In that case, Richardson agreed to sell, and the NFL never publicly released the findings of its internal investigation. It’s considered unlikely Snyder would accept a similar deal.
After a Washington Post report detailed the allegations of dozens of women, Snyder issued a statement calling the piece a “hit job” and declaring there were “other negative agendas at work,” presumably referring to the minority owners’ efforts to oust him.
What’s next? The lingering question is whether the Wilkinson report will be available for the owners to view and discuss at next week’s meetings, one of a handful of times each year they are all together to discuss league business.
This is likely to be the final league meeting conducted virtually, without media present, giving the league an opportunity to settle the business behind closed doors.