Dan Snyder may have just pulled off the executive-suite equivalent of escaping a furious pass rush at the last second to complete a desperation, wing-and-a-prayer Hail Mary.
The embattled Washington Football Team owner has a deal in place to buy out his disgruntled partner shareholders, an agreement that would reconsolidate control of the NFL franchise in the hands of the 56-year-old Maryland billionaire.
With the help of a $450 million loan from the NFL, Mr. Snyder is set to buy back the 40.5% stake of the team currently held by FedEx founder Fred Smith, investor Robert Rothman and developer Dwight Schar.
An NFL spokesman said approval of the loan and the transfer of shares is tentative, pending the expected support of at least 24 of the league’s 32 owners during a vote at next week’s annual league meeting.
Mr. Snyder is also likely, according to a new report, to survive the ongoing sexual harassment investigation the NFL has been conducting into the organization, though he is expected to be fined by his fellow owners.
The New York Times, citing a league source familiar with discussions on the matter, reported Wednesday that Mr. Snyder could face additional penalties or conditions on his continued ownership of the team as a result of the league’s probe.
An NFL spokesman contacted by The Washington Times cautioned that the buyout and the investigation are “two separate matters,” and said Washington-based attorney Beth Wilkinson’s review, which launched last July, is still ongoing.
Still, Wednesday’s developments cap a dramatic year in which the Washington Football Team owner struggled with fallout from the sexual harassment allegations, battled publicly with co-owners for control of the franchise and, under growing pressure from his business partners and activists, abandoned his team’s longtime nickname, the Redskins.
Mr. Snyder and his family will own 100% of the team’s shares under the new deal.
A December court filing revealed Mr. Snyder owns a majority 40.59% of the team’s stock, while his mother Arlette and sister Michele own 6.489% and 12.552% respectively. Mr. Smith (10.163%), Mr. Rothman (15.168%) and Mr. Schar (15.168%) combine for the rest after initially purchasing their shares in 2003.
The New York Times reported that Mr. Snyder will purchase the partners’ shares for $875 million. The paper added Snyder’s $450 million loan, called a “debt waiver,” must be repaid by March 2028.
The price tag would be less than the $900 million that the three partners previously arranged with an outside investing group before Mr. Snyder blocked the sale through his right of first refusal.
Mr. Snyder’s refusal — he reportedly had selectively agreed to buy out Mr. Smith and Mr. Rothman, but not Mr. Schar — sparked a contentious legal battle in which the partners sued in an attempt to get a federal judge to issue an injunction so the transaction could move forward.
Through the process, Mr. Snyder and his partners traded legal haymakers through court filings.
Mr. Snyder accused the owners of “orchestrating and fueling a vicious misinformation campaign,” referencing a series of Washington Post articles that detailed allegations of sexual harassment in the team’s workplace.
The partners accused Mr. Snyder “or his agents” of leaking false information to the press, notably alleging he mischaracterized the circumstances around a confidential settlement after an employee accused Snyder of sexual harassment.
But Mr. Snyder scored a major victory in late December when the judge in the case ruled that the matter must head back to the NFL’s private arbitration process.
As part of Mr. Snyder’s pending sale, Pro Football Talk reported that he will agree to drop any claims about his soon-to-be former partners in a separate lawsuit related to a defamation case against an Indian-based media company.
In the case, Mr. Snyder claimed Mr. Schar fed false stories to the website in order to add to the pressure on Mr. Snyder to sell.
Mr. Snyder’s conflict with the minority owners boiled over last year when he refused to pay out annual dividends to the partners as a way to conserve money amid the pandemic, according to the New York Times.
That move prompted the trio to band together and attempt to unload their shares by hiring a Baltimore-based investment firm to find a buyer.
The fight became public in August, when Mr. Snyder filed his defamation suit — alleging the misinformation campaign. The partners sued in November after the sale was blocked.
Ellen Zavian, a sports law professor at George Washington University, said the transaction will give Mr. Snyder more control “over the messaging” of the franchise.
“When you have minority owners, they have their own public relations agenda,” Ms. Zavian said. “As you can see in even changing the name, the sponsors came out and said something. But when you don’t have that minority ownership — you don’t have the Smiths of the world speaking out from inside the circle of knowledge.
“So now, particularly for Snyder, he’s looking to control the message.”
Christopher Schmidt, who co-chairs the sports litigation practice at law firm Bryan Cave Leighton Paisner, said the transaction will give Mr. Snyder the chance to put the internal power struggle behind him and focus on the franchise’s other issues, such as the league’s investigation and the team’s rebranding process.
“It should allow Snyder to turn the page,” he said.
Mr. Snyder’s future as Washington’s owner could also be affected by the Wilkinson report, though the NFL has never forced an owner to sell.
When then-Carolina Panthers owner Jerry Richardson faced a sexual misconduct scandal in 2017, Mr. Richardson voluntarily sold the team to billionaire David Tepper rather than force the NFL to enact its bylaws.
Through Section 8.1 of the league’s bylaws, an owner can be forced to sell if they’re found “guilty of conduct detrimental to the welfare of the league or professional football.”
In February, Commissioner Roger Goodell said Ms. Wilkinson’s investigation was “nearing its completion.”
But more than a month later, the league has yet to receive the findings.
Numerous activist groups have called for the report to be made public when available, though the NFL nor the team has committed to doing so.