New Owners – What are their first steps?

May 17, 2023

By Noonefromtampa

The purchase of the Commanders franchise is not unlike any other business merger and acquisition process except that the team isn’t merging into another team. Once the new owners take control of the franchise, they will need to quickly review the business and football operations to find any gaps between their pre-sale due diligence and what is really happening on a daily basis. Then, the owners will have to develop a plan to address the changes they think are needed to turn the franchise into a sustainable success.

Fans may be expecting the new owners to come in and start cleaning house on day one, but I suspect they may make changes more slowly in an incremental fashion as they have a number of issues to deal with and it will take time to address all of them.

First Issue

The biggest problem in the Dan Snyder era of ownership was the lack of institutional controls and the lack of accountability within the organizational structure to address workplace behavioral issues. I think this is one area that Jason Wright and Ron Rivera have addressed successfully in the last three years. The new owners will need to review the organizational changes that have been made and what controls are in place to ensure that the past is not repeated. Since Josh Harris has experience running other sports franchises, I don’t expect that this will be much of an issue going forward.

The changes that may happen sooner rather than later are Wright being replaced and Mali Friedman being replaced as Chief Legal Officer. The new owners will want their people in these key positions.

Second Issue

The next biggest issue for the franchise is the decline of local revenue. If you remember the column I posted a couple of years ago on the NFL revenue structure, there are two parts of a team’s revenue stream. One is the national revenue stream which is the shared component across the league mainly derived from the television and streaming rights. Every team gets the same amount of national revenue. The second is local revenue, which is the variable component and drives the total value of the franchise. It is composed of 60% of ticket sales, concession and parking, plus corporate sponsorships, and naming rights.

Dan’s minority partners effectively forced the name change by having Federal Express threaten to revoke their stadium naming rights deal. At that point, so many corporate sponsorships had been lost due to negative publicity that it was a tipping point for the franchise. Dan could not lose the lucrative naming rights deal and continue to operate the franchise the way he had in the past because the revenues would not be there. From what has been reported in the media, Dan was supporting a portion of his lifestyle by paying himself a handsome annual salary and charging expenses back to the team.

The new owners will seek to increase ticket sales and corporate sponsorships immediately. The sales and marketing teams will be put under a microscope. I also expect that someone from one of sports teams in which Harris is is already involved will be brought in to oversee this area.

Third Issue

The fanbase is problem number three. During the Snyder era, especially the last ten years, the fanbase has dwindled. People lost hope that the franchise would ever be as successful as it was under Jack Kent Cooke. Fans who remember the good times and Super Bowl teams are now in their 40s to 70s. Families that held season tickets for decades stopped going to games. Large sections of the stadium are marked off and those seats are no longer for sale.

Just having a new owner will buy some goodwill and invigorate the fanbase. The new owners will have to mount an effective media campaign to engage with metropolitan area around Washington. The need to put people in the seats and for fans to be talking about the team. This is important for increasing tickets sells as well as showing corporate sponsors that they should invest in the team. Increasing the fanbase leads directly to increased local revenues, on which the new owners should be focused.

Social engagement should also be a priority as they attempt to widen the fanbase. Bringing in younger fans is important for long-term growth of revenues and sustaining the franchise. This is another area of business operations that may see changes.

The media campaign should also have another objective: securing a location for a new stadium, which leads to issue number four.

Fourth Issue

The team needs a new stadium that can be used to increase the local revenue stream. Leading economic teams like the Cowboys and Rams have exploited new stadiums to drastically increase the local revenue streams. The Cowboys revenue stream is now nearly double that of the Commanders. While Dan was the owner, none of the local jurisdictions D.C., Maryland and Virginia were interested in working with him on a new stadium deal. Having new owners immediately removes that roadblock and potentially opens previous closed options, like the old RFK stadium site.

The owners will have to make decisions about whether they want just a new stadium complex or a stadium and training facility together. This will lead to a decision about whether the current facility in Ashburn will be upgraded or replaced, which leads to the fifth issue.

Fifth Issue

The NFLPA franchise report card had the Commanders ranked dead last in the whole league. Improving the treatment of players should be another focus of the new owners. A new or improved facility would help improve those scores and improve player morale. The lowest scores for the Commanders were in family support, training room, locker room and travel. So, these data points should give the incoming owners an immediate opportunity to create some positive visible changes to the organization. This may lead to changes in the football operations and administration area.

Football Operations Changes

Currently, it is too late in the offseason schedule to make major changes in the coaching staff. The one area that will probably change is the use of analytics. Josh Harris has a background in investment finance which is driven by big data and analytics. His organization that runs the Philadelphia 76ers and New Jersey Devils has invested heavily in data analytics with those two organizations being viewed as leaders now in their respective sports. I would expect that part of the Commanders to be revamped and enlarged.

The other side of football operations is the front office. The incoming owners will have a total of about 60 days to review the front office operations, the player personnel and draft decisions that have been made, and salary cap position. Any changes that need to be made to the pro or collegiate scouting groups need to be in place in August before football season begins in earnest.

Since Martin Mayhew, Marty Hurney and Ron Rivera work closely together, the most logical scenario is to remove them all at the end of the season. The only thing that could save them is some kind of outstanding season which seems unlikely with an unproven quarterback and the eighth most difficult schedule in the league.

Regardless of what actually occurs over the next several months it is going to be an interesting time and very much different that what Commanders fans have experienced over the last 23 years.