How The NFL’s Worst Owner Made $5 Billion In Profit
Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week. Today At A Glance:Dan Snyder is officially gone. The Washington Commanders formally changed hands last week, with the 31 other NFL owners unanimously approving the $6.05 billion purchase by Josh Harris and his group. So today’s newsletter breaks down what went wrong during Dan Snyder’s tenure and why he still made more than $5 billion in profit despite never winning any big games. This newsletter is also available via podcast on Apple or Spotify. Enjoy! This Newsletter is Sponsored By ButcherBox!
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In addition to Josh Harris, a Washington, DC native who also owns the Philadelphia 76ers and New Jersey Devils, the Commanders ownership group has 20 limited partners, including NBA legend Magic Johnson and fellow DC billionaire Mitchell Rales. Harris will reportedly own about 30% of the team’s equity, with the remaining 70% being split among the 20 limited partners (ex. Magic Johnson owns 4% of the team). But most importantly, this means the NFL is finally getting rid of Dan Snyder.
Dan Snyder is rightfully considered one of the worst owners in NFL history. In 1999, Snyder sold his communications company for $2.1 billion, borrowed $300 million from a European bank, assumed an additional $150 million of debt on the stadium, and paid a record $800 million for the Washington, DC-based NFL franchise. But controversy has followed him every step over the last 20+ years. Dan Snyder has faced multiple allegations of sexual assault and harassment. He has been suspended and fined more than $10 million by the league. He sued season ticket holders who could not pay during the 2008 recession, despite claiming the team had a wait list with more than 200,000 people on it. And he also got caught selling expired peanuts at FedEx Field from Independence Air, an airline company that had gone out of business and had not sent any new peanut shipments in almost a year. Still, that’s just the tip of the iceberg when it comes to Dan Snyder. Snyder erected a statue of franchise legend Sean Taylor that looked more like a temporary mannequin. Snyder was also forced to buy out his partners after it was revealed he took out a $55 million loan without them knowing and charged the team a $4.5 million advertising fee for putting the team logo on his private jet. And that’s without even mentioning that the team has won just two playoff games in 20+ years. Washington Commanders Attendance Rank
I could go on, but you get the point. Snyder is not a good person, whether you want to look at how he treats employees, fans, players, or even regular everyday people. **Remember: Dan Snyder famously offered a $25,000 donation to National Parks Services in exchange for the right to cut down 140 trees blocking the view of the Potomac River from his $50 million house. But when he was denied, Snyder worked out a backroom deal to get the trees demolished, and he tried to ruin a whistleblower’s life by getting him arrested on several charges that never held up.** But none of this really matters, at least financially. That’s because Dan Snyder bought a team in the NFL — the world’s most profitable sports league. For example, despite Dan Snyder’s ownership tenure having more investigations (6) than playoff wins (2), the NFL has seen its annual revenue grow from $4 billion in 2000 to $20 billion today. And with all 32 NFL teams receiving an equal share of $12 billion in national revenues, the Washington Commanders received a check for $374.4 million last year. That’s a 7.8% increase in national revenue from 2021, and it doesn’t even count local revenues (ticket sales, concessions, parking, sponsorships, etc.). Washington Commanders Valuation
So my point is simple: Dan Snyder didn’t win many games, and the fans hated him. He was accused of hiring private investigators to keep tabs on other owners. And Snyder even received a $60 million fine from the NFL on the way out after a private investigation found claims of sexual harassment and financial improprieties to be true (Snyder was directing employees to move NFL revenue, which would be shared with other NFL owners, into non-NFL categories like college football or concerts). But Dan Snyder and his family — his sister owns 12.5% of the team, and his mom owns 6.5% of the team — will still walk away with a $5 billion-plus PROFIT on the deal simply because the NFL has a “rising tide lifts all boats” revenue-sharing model. And that business model has created an ever-increasing slope of franchise valuations.
Now, this doesn’t mean it will be easy for Washington’s new ownership group. In fact, the Josh Harris-led group has their work cut out for them. They need to do the obvious stuff, like repair the team’s reputation with the fans, analyze the roster, and make a decision on front office staff. But Washington also needs a new stadium, which could cost several billion dollars and take years of lobbying with politicians. Still, whether the new ownership group wins the Super Bowl or loses every game, the bar is pretty low. And if they just do everything exactly the opposite of how Dan Snyder would have done it, they’ll probably be alright in the long run. If you enjoyed this breakdown, please consider sharing it with your friends! I hope everyone has a great day. We’ll talk on Wednesday. Listen to the Joe Pomp Show on Apple or Spotify. Interested in advertising with Huddle Up? Email me. Your feedback helps me improve Huddle Up. How did you like today’s post? Loved | Great | Good | Meh | Bad Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.
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