Congress’ probe into hostile workplace conditions at Washington’s football team has been a headache for the league and ownership, but recent allegations that the club kept revenue it was supposed to share from the rest of the league may become a much larger issue.
“For owners, money is the bottom line,” said Geoffrey Rapp, a sports law professor at the University of Toledo. “Even if this was a small-change type of a scam, there’s just so much money in the sport today, you could really pull in quite a bit off the top, and they can’t really tolerate that.”
The Commanders this week aimed to forcefully rebut the statements and evidence provided by Jason Friedman to the House Committee on Oversight and Reform. The former team executive has alleged that the team hid revenue from league owners and kept millions in refundable fan deposits.
In 102 pages of documents sent to Federal Trade Commission Chair Lina Khan, the team called the allegations “false and malicious” and suggested the congressional committee’s findings don’t warrant more investigation.
“Had the committee requested any information from the team on the issues raised … the team could, and would, have provided testimony and documents making clear that the complained-of conduct did not occur,” the team wrote in a letter signed by Jordan W. Siev, a lawyer with Reed Smith.
The NFL declined to comment on the Commanders’ response to Oversight and reiterated that it had directed Mary Jo White, a former federal prosecutor and Securities and Exchange Commission chair, to investigate the matter.
“We continue to cooperate with the Oversight Committee and have provided more than 210,000 pages of documents since the Committee started its overall investigation,” league spokesman Brian McCarthy said in an email. “Out of respect for the process, we are not providing further details.”
The FTC didn’t respond to a request for comment.
The exchange is just the latest example of Congress turning up the pressure on Washington’s scandal-plagued football team. Oversight asked the NFL last year to turn over documents related to an internal workplace harassment probe that was led by attorney Beth Wilkinson, but Commissioner Roger Goodell sought to keep the findings private. Oversight then held a February roundtable at which several former employees brought new accusations against team owner Daniel Snyder.
Wilkinson reportedly spent months interviewing more than 150 people and collecting more than 650,000 emails, but according to reporting from The Washington Post, she was told to not file a written report and instead present the findings verbally.
“The NFL and the ownership of the Washington Commanders have been pointing fingers at each other, saying that the other is the reason why they can’t produce these documents to us,” Rep. Raja Krishnamoorthi said earlier this month. The Illinois Democrat leads the Subcommittee on Economic and Consumer Policy.
“The NFL has produced documents on a rolling basis, but we still seek a lot more information,” he said. “And so the investigation continues.”
In a statement this week, the committee said the FTC should continue pursuit of the Commanders’ revenue-skimming allegations and that it would keep pursuing the toxic workplace issues, too. The committee’s jurisdiction includes the rules, regulations and laws that govern workplace safety, as well as nondisclosure agreement law.
“If the team maintains that it has nothing to hide, it should welcome an independent review by the FTC, or the NFL, which is reportedly examining these issues as well,” the statement said.
Friedman reportedly told Oversight the team kept two sets of books. One set was shown to Snyder and had the complete reporting of team revenue, and the second was shared with the NFL and hid that unreported cash. The executives, according to Oversight, referred to it as “juice” — in gambling, the juice is the amount charged by a sportsbook to take a bet.
Each football team is a separate business, but there are franchise agreements on things like sharing revenue from ticket or merchandise sales. And though the government doesn’t typically step in to enforce partnership agreements, the league certainly is paying attention.
Concealing revenue could also be important to players, who receive 48.5 percent of league revenue, according to the current collective bargaining agreement.
“Once you’re in the league, you can still pursue your own separate interests, but you really shouldn’t be trying to cheat your partners,” Rapp said. “That’s the kind of thing that I think would upset the league and the other teams.”
The FTC, charged with enforcing laws aimed at protecting consumers, could investigate the allegations made by Friedman that the team intentionally kept nearly $5 million in security deposits and levy civil penalties. But if the agency were to investigate and find criminal behavior, the cases would likely be referred to the Department of Justice, Rapp said.
Five million dollars is a relatively small amount of money compared to other FTC cases, but the federal government has a history of taking up sports-related cases because the fans are watching.
“Even though this is an agency that’s been doing a lot of other things over the last 10 years, this is probably more headlines than they’ve gotten,” Rapp said. “It’s something that people really latch on to and pay attention to.”
If more allegations of wrongdoing emerge as investigators continue to examine the football club, especially when it comes to money-related matters, the pressure could grow for Snyder to loosen his grip on ownership. But it could take even more egregious evidence for the league and other owners to seek the ugly public fight that might ensue if the league were to try to force Snyder to sell his team.
“Everyone has an interest in resolving things out of court and out of the public eye,” Rapp said. “But until the writing’s on the wall for Snyder that the NFL is willing to go to that expulsion stage, he may just hold on.”
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