Rumor & Reality – Four Days in Three Quotes And One Acceptable Outcome

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November 8, 2022

By Paul Francis

 

Oh my God, okay, it’s happening. Everybody, stay calm.  Stay calm…STAY F***ING CALM!

-Michael Scott, The Office

 

On November 2, 2022, while football fans were processing the outcome of an active NFL trade deadline, another piece of NFL news dropped like a pebble that started an avalanche.  The Snyders hired Bank of America to explore “potential transactions”.  The media did its job to ask for clarification, which produced arguably the 5 most consequential words in the history of Washington football.

We. Are. Exploring. All. Options.

Heads exploded all over Washington Fandom.  Something was happening, and with “all options” on the table…was that code for “Dan is selling the team”?.  HOLY COW, HE’S SELLING THE TEAM!  Well, we don’t know that, but it’s obviously a possibility.  Something is happening.  What exactly?  Well “it” is happening.  What is “it”?  Well…we don’t really know but…we’re trying to stay calm ok…STAY F***ING CALM!  As we hyperventilate and our minds uncontrollably angle into a million different scenarios all of which end in the same place.

#SnyderOut

Do we know that for sure?  Well, no.  Like I said, we are screaming out ourselves to stay calm, but…

 

So, you’re telling me there’s a chance.  YEAH!

-Lloyd Christmas, Dumb & Dumber

 

Now, we are calm and checking the situation with a measured sobriety. There is definitely at least a chance that Dan is preparing to sell the team outright.  And I think that chance is growing by the hour because Dan Snyder seems cornered, in much the same way that his hand was forced to change the team name, despite unequivocal statements that would NEVER (all caps) happen.  In the case of the name, Dan eventually succumbed to larger socio-political and economic forces.  We seem to be in a similar moment regarding ownership.

Dan can’t hide behind Tanya and dodge subpoenas by fleeing to international waters on his yacht forever.  He needs to man-up and face the reality that everyone wants him gone.  EVERYONE (all caps).  The issue has been how.  Short of finding a body in the trunk of his car, the only direct lever to get rid of Dan is a vote from 24 owners.  But even with rumors that several owners would vote him out, 24 is a high bar to achieve; plus, it might trigger a legal battle with Dan Snyder that everyone wants to avoid.

But Dan appears to be in a severe financial pinch.  He struck out badly this past year trying to get public funding to build a new stadium.  So, when the lease on FedEx Field expires in 5 years, he’s going to have to pay for a new stadium out of his own pocket.  And while many lamented the fact that he got full control of the team from his minority partners, the other side of that coin is that he had to borrow significant money to do so.  He was able to take on that extra debt because the owners approved a debt-waiver for him, but that money needs to be paid back by 2028.  Bottom line is that he’s got bills stacking up and expenses on the horizon that he does not appear to be able to afford.  That’s not even mentioning the legal and financial uncertainties involved in numerous ongoing investigations.

I’ve commented before that NFL ownership works like a mafia-family with Roger Goodell as the frontman.  Once you get made, you are protected from virtually anything, until the family decides to whack you.  This has clearly been the case with Dan Snyder.  That Dan Snyder continues to own the Washington Commanders today despite decades of unspeakably bad decisions and practices at virtually every level of his ownership tenure strains credulity.  But it appears that the family has finally made a decision.  If rumors are to be believed, a group of owners have had a conversation with Dan and let him know “it’s time”.

 

I’m gonna make him an offer he can’t refuse.

-Vito Corleone, The Godfather

 

For Dan to survive, he needs financing.  This could come in a couple of ways.  He could sell minority partnership stakes in the team to raise cash, or he could keep leveraging existing assets to borrow more money.  But here’s the kicker – he needs to get approval through the other owners to do any of that.  And here’s where the high bar of those 24 votes comes back to bite Dan, because any sale, even a minority share, or any further debt-waivers need to get approved by 24 owners.

Checkmate.

So, here’s the plausible-but-imaginary offer that a delegation of owners recently made to Dan:

“Dan, the owners are not going to approve another debt-waiver, and you do not have the votes to sell only minority stakes.  So, here it is:  You can go to war with everyone and continue to slowly tear apart everything you have, taking down your family with you as one of the most reviled in DC and in sports.  Or we will help facilitate a full sale of the team for a record-breaking price.  You can walk away a billionaire several times over, and we’ll make as many of the investigations as we can go away, just like that.”

It’s an offer that Dan cannot refuse.

And despite Dan’s best unintended efforts to crater the value of the Washington franchise, the Commanders remain an extremely valuable property located in a top-10 media market with a built-in fanbase.  Once the Bank of America news broke, it only took a couple of days for Forbes to report that at least four potential bidders already expressed interest in buying the team outright.

The Denver Broncos recently sold for $4.65 billion, and the Washington team has been valued higher.  In a bidding war the price could even reach $7 billion, if rumors are to be believed.  Not a bad punishment for the world’s worst owner, eh?  Furthermore, according to Forbes, new Commanders brand revenue is up 40% from last season, and Washington recently signed a record-breaking corporate sponsorship deal with SeatGeek.  In the complex and contradictory economic world of sports ownership; even though business is bad for Snyder, business is actually very good for the Commanders…for now.

If Dan waits, things can get trickier.  New owners would currently have a 4-5 year window to pull off the construction of a new stadium.  That’s doable.  But as that window shrinks, potential owners are not going to like the prospects of buying a team that’s about to be homeless.  Furthermore, the uncertainty of ongoing legal investigations hovering over the organization remain an X-factor.  While things are “ongoing” anything can happen – even a decision to shut down an investigation if ownership turns over.  But if an investigation is concluded and certain penalties get attached to the organization (not just Dan Snyder personally) then that could affect the value of the team as well.

Bottom line is that the clock is working against Snyder.  If he’s going to sell, he should do it pronto.  With all these rumors and realities swirling around, Jay Glazer’s most recent report on November 6th, that Snyder intends to sell the team outright as early as March of 2023, makes sense.

New Washington owners would be able to take their seat at the family table and break bread at the owners NFL Annual Meeting, typically held at the end of March.  This NFL “thing of ours” – this cosanostra – could resume operations with minimal turmoil, which is good for everyone.  As far as Dan Snyder is concerned, it was nothing personal, just business.  But now with things settled and debts paid, the NFL family can look to the future.

Saluté!