Dan Snyder: Uninvited, Unwanted Pariah
October 17, 2022
by Steve Thomas
Quite a bit has happened since I last unloaded my thoughts on Dan Snyder in this space several months ago. There’ve been allegations of shadow investigations, more of the ridiculous farce of a congressional investigation, Snyder’s reemergence on the Washington football scene, a release of a letter from Dan’s attorneys, and rumors that at least some of the other 31 owners are finally tired of this franchise-killing, self-crowned, self-aggrandizing demi-god.[1]
What should we make of these latest developments? Is it possible that Dan’s time is finally coming to an end? Could we be so lucky? First, understand that the letter from Snyder’s law firm, Holland and Knight, is nothing more than an attempt to correct the record (a copy of the letter is in the column here). Nobody expected that receipt of this letter by the Congressional Oversight and Reform Committee would matter one bit to them. The purpose of this letter was only to put Snyder’s argument into the public record. I’ve written a number of letters like this on behalf of clients – sometimes, your only play is to make your argument wherever you can. That’s what Snyder did here. At some point soon, the committee will probably release a report, most likely prior to the upcoming federal elections. I’ve watched all of the publicly available video of the hearings and read all of the transcripts, and it was abundantly clear that the Republican members of the committee don’t support the existence of the investigation. Therefore, the odds are good that it ends if, as expected, control of the House of Representatives changes sides as a result of next month’s election. For that reason, I expect that whatever the committee intends to do or release is going to happen in the next few weeks. This forced Snyder to release the letter when he did.
As to the substance of the letter, I agreed with much of it, albeit not everything. The basic, overarching claim in the letter is that the Committee failed to do an adequate, impartial, and complete investigation, and that’s true. The Committee’s action – like nearly all Congressional committees and actions – is nothing more than a blatantly partisan attempt to generate headlines and votes. It isn’t a real investigation and they didn’t do legitimate depositions – at least the non-Snyder depositions that I read and watched – conducted by trial attorneys. All of the questioning that I saw, which does not include the unreleased Snyder testimony, was poorly conducted and rife with grandstanding speeches, not probative questioning by skilled investigators. Furthermore, Holland and Knight’s accusation that the Committee totally failed to challenge the integrity and validity of the witnesses was 100% accurate. I know we all dislike Snyder, but nobody should be under the impression that everything this Committee says and prints on this case is the complete, unvarnished truth.
What the letter didn’t do quite as good a job at was attacking the credibility of the witnesses. Some of those arguments were pretty weak. I’m not going to do a more detailed breakdown of the issues here, because we did a 45 minute deep-dive into the letter on our latest episode of It’s Just Business that tells you everything you need to know (click here to listen).
ESPN’s recent story on Snyder, titled “Sources: Commanders boss Snyder claims ‘dirt’ on NFL owners, Goodell”, published on October 13 (click here to read) was extremely negative and contained a variety of different accusations against Snyder, including (1) that Snyder had researched the other owners and Roger Goodell, and had “dirt” on many, (2) that many of the other owners disliked him, and (3) it’s finances and Dan’s stadium failure that really has him in hot water. Let’s tackle each.
The witnesses for the Oversight Committee accused Snyder of hiring private investigators, and the committee said that Snyder had conducted a “shadow investigation” in parallel to Beth Wilkinson’s investigation of the team. The idea that Dan would hire private investigators to research is fellow owners is hardly surprising. If you didn’t think Dan was capable of this level of hardball tactics, you haven’t been paying attention over the last 25 years. We don’t know what sort of information he might have, mind you, but the idea that he’s done this to one extent or the other is a virtual certainty. My It’s Just Business Podcast partner, Chris Larry, and I have spent a number of segments over the past year analyzing Snyder’s actions in what I’ve called the “Meowww” lawsuit, which was his claim filed in India against a website that published clearly false and ridiculous rumors about Snyder. Snyder used this lawsuit as an excuse to file wide-ranging discovery requests all around the United States, things that, in my opinion, appeared to be beyond the limited scope of the original claims in the Indian court.
This was what the Congressional committee labeled as a “shadow investigation”. It is a situation in which two things are true at once. The committee’s use of this label is a lie. It wasn’t done in any shadow, and was above-board and with notice to the NFL front office. At the same time, though, as I said above, it seemed pretty clear that Snyder’s discovery requests were way out there and obviously designed to generate information beyond the scope of the Meowww lawsuit. So, no, Snyder wasn’t conducting some sort of hidden, secret investigation, but yes, Snyder did investigate many people and claims all over the country in an attempt to gather intelligence on his enemies at the same time the Wilkinson investigation was going on.
The column additionally alleged that “many owners and top league executives tell ESPN they would like to see Snyder removed as owner.” The governing league documents require a vote of 75% of the owners to formally remove an owner, which equals 24. The piece did not have any indication of how many owners would be willing to actually vote against Snyder. Disliking, or even hating, the guy is a different than being willing to publicly vote a guy off the island who claims to know your secrets. Put as simply as possible, the other owners are afraid that if they get rid of Snyder because of his misconduct, then they’ll be next. I’m no billionaire, but I think it’s safe to say that you don’t acquire and keep billions of dollars without having a few skeletons in your closet. What’s worse for the other owners: keeping Snyder or putting yourself in peril by getting rid of him? There’s no telling if enough of them will be willing to put themselves at risk by publicly voting Snyder out. Personally, I tend to doubt it.
The allegation that finances is what possibly has Snyder in the most trouble isn’t surprising. It’s crystal clear that Washington’s revenues have been in the toilet – they consistently have the worst, or almost the worst, attendance in the league, and multiple sponsors have abandoned the franchise as a result of the allegations against Snyder. Throw in money allegedly misreported to the NFL and kept in Washington and, if true – something that hasn’t been established – we would have one of the most underperforming teams in the league allegedly cheating the other teams out of even more money. That’s pretty damning.
The biggest issue, though, seems to be the stadium fiasco. As someone who represents clients in major commercial real estate deals on a regular basis, I can tell you that, sometimes, deals just lose steam and die, for a variety of reasons, and it’s something that people involved start to realize as time goes by. That’s what the team’s attempts this past offseason felt like to me. The idea of a stadium anywhere in the District of Columbia was always a long shot for many reasons, and a near-impossibility at the RFK site. It seemed for awhile that the state of Virginia would ante-up most of the funding for a development at one of several locations, but the effort eventually died in the state legislature seemingly thanks to the public outcry against the state working with Snyder. The state of Maryland had a similar reaction, making it clear that they weren’t going to contribute meaningful funds and wouldn’t allow Snyder to own the potential site. The final item that came out about a potential stadium was a story back in May that Snyder had actually purchased some land near Woodbridge, Virginia. If you go back through our Hog Sty Podcast at the time, you’ll find that I said that he probably just had an option to buy this land, and sure enough, that turned out to be the case. The point of the option was to have a plan in the event that Snyder figured out how to shake down the legislature after all. That didn’t happen, and the option property disappeared from the news. The term of the option may or may not still be active – we may never know.
The ESPN story alleged that Snyder’s problems with the other owners would all be forgotten if he can somehow manage to get a stadium built. That may be true, but the seeming total lack of state funding puts Snyder into a difficult situation – in today’s market, any major NFL stadium project is going to cost at least $1B. Furthermore, what Snyder envisions, which is a major mixed use commercial development surrounding this hypothetical stadium with retail, restaurants, and residential, would be dramatically more expensive, multiple billions. Snyder isn’t personally wealthy by NFL owner standards. He doesn’t have other significant assets that could be leveraged, maybe not even enough for a major personal equity injection in private financing, principally because he’s ruined almost every business he’s had. I obviously haven’t seen his balance sheet, so I’m just guessing, but that’s what it appears to me. That’s partially why most owners who try to build stadiums want state funding.
If a stadium owned by Snyder was going to happen, how it would work is that Snyder would form one or more entities to own and control the stadium site, and the team, which is owned by an entity called “Pro Football, Inc.”, would sign a 30 year lease. The problem is that the team revenue alone isn’t necessarily enough to pay debt service on $1B or more in private financing on a massive development and still turn a profit, so if he has truly lost state funding, it’s a serious problem. That’s not to say that lenders couldn’t additionally rely on projected revenue from the commercial leasing, but it makes the whole deal exponentially more complicated, even moreso because Snyder has no experience in commercial real estate. He doesn’t appear to have the business infrastructure to build and manage a major development without a partner, who currently doesn’t exist.
The NFL has historically contributed money to stadium projects, but the ESPN column mentioned that some owners could put more pressure on Snyder by (1) refusing to contribute that money, and (2) refusing to allow Snyder to further increase the league’s debt limit placed on all owners. That would essentially be a way for the owners to let Snyder know that the gig is up, without actually saying it. This is a major point, so keep an eye out on this situation in the coming months.
Finally, the ESPN story indicated that a formal move by the owners against Snyder could come as early as at the NFL owners meetings this Tuesday. There’s no telling if the owners would risk such a move given the alleged “dirt” Snyder apparently holds, but at this point, it’s not impossible to envision. I’ve said for years that the best way to get rid of Snyder is for multiple owners to informally go to Snyder and tell him that his time is up – think intervention for a loved one who’s an addict. That seems to be the best analogy for what needs to happen. I still think that’s the best way to go, and frankly, there are worse fates for Snyder than a gross profit of $5B on a sale. Even if his personal net is only a billion or two, that’s still one heck of a retirement fund. Keep an ear to the ground tomorrow, particularly news from the national NFL reporters, in case something actually comes to fruition.
All of these leads to one fundamental question: will Snyder either leave or be forced to leave? I’d love to predict that it will happen, but at this point, nobody truly knows. I could see it breaking either way. I certainly don’t think that a transfer to Dan’s wife, Tanya, is any sort of resonable or acceptable answer.
So everyone, please pray to the higher power of your choice that Dan finally rides off into the sunset one way or the other. Just don’t bet too much on it.
[1] Please credential us for training camp next year, Washington PR.