The heat is on for Washington Commanders owner Daniel Snyder.
Over the last several days, multiple conflicting reports emerged regarding the sale of the Washington Commanders, who was involved, who wasn’t involved and Snyder’s pushback.
On Tuesday morning, the day after The Washington Post’s story revealing Snyder wanted indemnification from fellow NFL owners and the league from future liabilities and costs if he sells the team, came an ESPN bombshell from Don Van Natta Jr. that covered Snyder’s falling out with his three former minority partners.
A lot was included in Van Natta’s report, which featured excellent reporting and a lot of documents, many of which revolve around a $55 million loan Snyder received from Bank of America that his former minority partners knew nothing about at the time.
We’ve reviewed Van Natta’s report, and here are five highlights/takeaways from the latest Snyder news.
The loan
Snyder obtained the loan from Bank of America and did so without the knowledge of minority owners Dwight Schar, Robert Rothman and Frederick Smith. The trio later found out about the loan and questioned Snyder.
Here’s an excerpt from Van Natta’s lengthy report:
The partners confronted Snyder about the missed quarterly payment in May 2020 and asked why he had secured the credit line. They also demanded an explanation for what they called “self-dealing transactions.” Snyder ignored their questions, the partners allege in the documents, except to eventually tell them the team had borrowed more than $20 million under the credit line.
This led to the falling out between Snyder and his three partners, who were minority investors who had combined to own 40% of the franchise since 2003. The trio went to the NFL and eventually settled to sell their 40% stake back to Snyder for $875 million, for which Snyder needed another loan from the NFL to make.
The loan is the focus of the Virginia investigation
Remember late last year when it was revealed the Eastern District of Virginia had opened an investigation into Snyder and the team for alleged financial improprieties? Here’s this from Van Natta:
The secret $55 million loan has become a primary focus of federal prosecutors in Virginia who are investigating allegations of financial misconduct by Snyder and the Washington Commanders, multiple sources with firsthand knowledge of the inquiry told ESPN.
This is perhaps the most significant investigation into Snyder since many of his troubles began in 2020.
Roger Goodell and the NFL sided with Snyder over minority partners
NFL commissioner Roger Goodell and the league do not come out of this looking good. Many have long suspected the NFL looked the other way on more than one occasion in regard to Snyder. Here’s this quote from a source to Van Natta:
“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.”
That quote is damning for Goodell and the NFL. If true, the league didn’t want to investigate the claims of the former minority partners and hoped it would go away if it helped Snyder buy Rothman, Schar and Smith out.
Snyder used team as a “personal piggy bank”
There was a lot of this included in the report.
First, there’s this:
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.
That’s ridiculous. He charged the team $4.5 million and then said it was an advertising fee. Really?
Here’s another interesting piece:
The arbitration filing flatly declared that Snyder was using team cash “to support his lavish lifestyle.”
And this:
In the letter, Snyder revealed that the expenses included a July 2018 yacht party in the south of France, where he hosted fellow owners Jerry Jones of the Dallas Cowboys, Robert Kraft of the New England Patriots and Terry Pegula of the Buffalo Bills.
The allegation implies that Snyder was using the team to fund not only his lavish lifestyle but to entertain fellow NFL owners.
Last but not least, Snyder allegedly paid himself a salary of $10 million per year.
Bank of America
Remember when Snyder initially hired Bank of America in the fall to explore potential transactions? Well, apparently, Snyder may owe Bank of America quite a bit, and it’s no coincidence they are helping handle a possible sale. How much does Snyder owe Bank of America? Don’t forget; he still owes the NFL.
In recent seasons, we’ve often heard the franchise is “cash-poor,” which is a far cry from how things used to be. Free agents would come to Washington, Snyder would roll out the red carpet, and they’d sign. Not anymore, and it hasn’t been that way for a long time.
Washington is a large-market team essentially operating like a small-market franchise, which is astounding.
If you take into account the debt Snyder owes, he may have no other option to sell. No one is going into business with him to be his minority partner.
Snyder once blocked Smith from selling his stake
In 2018, Smith found a buyer for his 10% stake in the team, but Snyder blocked it, saying the buyer, Alan Kestenbaum, “would not be acceptable to the NFL.” A year later, Kestenbaum purchased a minority stake in the Atlanta Falcons and was approved by the NFL.
Why didn’t Snyder want Smith to sell his stake?
In their arbitration petition, the partners alleged that Snyder blocked the sale to Kestenbaum because the due diligence required by a new limited partner “would have revealed the misconduct.”
If this is true, Snyder’s conduct would have been discovered much sooner.
