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Snyder allegedly ripped off his business partners too.
The seemingly endless string of Dan Snyder fiascos isn’t coming to an end any time soon. This week saw conflicting reports about whether the Commanders owner was refusing to accept a bid from Amazon founder Jeff Bezos, and now new details have emerged about Snyder’s alleged business dealings, which have caught the attention of federal prosecutors.
Of particular interest in the latest probe is an alleged $55 million loan, which Snyder and the Commanders took out in 2019 without the knowledge, or approval, of his business partners. The three men in question owned a combined 40 percent of the team at the time of the loan and were not made aware Snyder or the team was seeking the funds from Bank of America.
The ranging report from ESPN is absolutely worth diving into. There are incredible details about this loan, why prosecutors and the IRS are interested, as well as how Bank of America could have been deceived about the nature of the loan itself. Beyond these details are some frankly ridiculous claims, some of which seem impossibly preposterous if it wasn’t Snyder at the center of them.
Snyder charged the Commanders $4.5M to put the team logo on his own private jet
Court documents allege that Snyder used the team as his “personal piggy bank,” which allegedly resulted in a direct payment from the Commanders to Snyder for putting the team’s logo on his private jet.
“minority partners Robert Rothman, Dwight Schar and Frederick W. Smith protested the loan after they discovered it in a financial report’s fine print. They then started looking closely into the team’s finances and found Snyder was using the team as his “personal piggy bank,” including charging the team $4.5 million to put its logo on his private jet, they alleged in the arbitration petition filed with the NFL.”
Any potential reasoning for this is nonsensical. Thousands of brands pay extensive licensing fees to the NFL in order to be allowed to print team logos on merchandise or goods. Essentially here Snyder used the Commanders logo, as one would expect a team owner to do, but allegedly charged the Commanders for doing so, as if his personal jet was allowing the team to advertise themselves.
The NFL bent over backwards to help Snyder
This is where the allegations get really dirty. A $4.5M payment for a team logo is one thing, but the NFL’s role in all this not only allegedly covered up a crime but cost Synder’s two business partners hundreds of millions of dollars.
Snyder’s partners, Dwight Schar, Robert Rothman, and Frederick W. Smith wanted to divest themselves of their stake in the Commanders. The process went to arbitration inside the NFL, and the three men made the allegations about Snyder’s $55M loan, which they said breached the Commanders’ shareholder agreement.
A source close to the negotiations told ESPN that not only did the NFL side with Snyder, they allege the league didn’t even attempt to investigation the potential financial malfeasance.
“Three billionaires — not a few whistleblowers — alleged to the NFL arbitrator that their partner had possibly committed bank fraud,” the source said. “This is jail time type of fraud. The NFL owes them as much of a fair shake as it owes Snyder. And the league had no interest in finding out what happened. They buried it and didn’t investigate it and covered it up.”
It goes even further. At this point the three men agreed to allow mediation to settle the dispute over payment for their 40 percent of the team. This happened during the Spring of 2021. At the time the Commanders were valued at $4.2B on the Forbes list.
By nature a mediator is supposed to be impartial and make a fair and balanced judgement for both parties. However, the result of mediation allowed for Snyder to buy the 40 percent of the team owned by the three men at a price of $875M, when by all indications their share of the franchise was worth $1.68B at the time.
An NFL coach gets dragged into this too
At this point you’re probably wondering why three investors would accept far below market value for their stake in an NFL team, especially when teams only gain value over time. Concern came from Frederick W. Smith, founder of FedEx — and important here: Father of Atlanta Falcons head coach Arthur Smith.
Frederick W. Smith allegedly convinced his two partners to agree to the mediation, because he feared that unless they played ball with the NFL it would have a direct impact on his son’s coaching career in the league.
The NFL helped fund Snyder buying back his team
It was one thing to get a bargain on 40 percent of the Commanders, but another entirely to execute on it. The report alleges that Snyder was cash poor following the mediation, and didn’t have the $875M needed to pay his former partners.
“He needed the NFL’s permission to finance the buyout. By a 32-0 vote on March 31, 2021, NFL owners granted Snyder a new debt-limit waiver. And Snyder borrowed an additional $450 million from Bank of America.”
Now, less than two years after the mediation process was completed, Snyder is seeking $7B in a sale of the Commanders. He is asking well over market value for his team, presumably banking on future growth. This, after underpaying his former partners to the tune of $805M.
That 40 percent stake in the team would be worth $2.8B if Snyder is able to receive his asking price.
This is bad news for the NFL
The shield loves to operate behind closed doors and plausible deniability. These court documents allege an organization doing everything in its power to help Snyder at the expense of other investors, during a process which should be impartial. In addition, Smith’s fears about his son’s coaching career suffering if he didn’t play ball with Roger Goodell directly relate to other potential collusion cases in the league when it comes to players and coaches, unless we presume Smith’s concerns were unfounded.
Goodell and the NFL hate nothing more than the public seeing how the sausage is made. This Snyder case is about to open things up far wider than they’re comfortable with, and there will undoubtedly be more bombshells to land.
