ESPN’s Seth Wickersham and John Keim recently reported on a prospectus drafted by Harris Blitzer Sports & Entertainment and its advisers. The “Harris” of that group is in reference to 76ers co-owner and potential buyer of the Commanders, Josh Harris. Harris and company drafted the 43-page document, titled “Commanders Investment Opportunity” and marked as “Privileged & Confidential,” to help pitch potential limited partners to buy into the deal with Harris.
The reason this seems unfamiliar is because, in the past, buyers of franchises have historically been able to afford the purchase without the help of limited partners. As franchise prices continue to skyrocket, though, it should be expected that what has become known as an unnecessarily complicated financial agreement will be become the new norm.
In the document, Harris paints the picture of a future for the Commanders that includes boosted attendance, increased ticket sales and sponsorship revenue, and even a new stadium. There are almost certainly specific plans to address these assignments, but the report focuses on Harris’s assertion that the mere removal of current ownership should greatly assist in propelling the franchise towards those end goals.
Harris argues that the recent spiraling in attendance, ticket sales, and sponsorship revenue are all direct consequences of “allegations against current ownership.” He points out that the franchise has, historically, ranked among the best in the league for local revenue metrics and attendance, and that, with new ownership, opportunities will arise to help restimulate and drive local revenue. Harris predicts that the potential new ownership will more than double this year’s local revenue ($173MM) by the 2031-32 season, quoting estimates of $380MM or $466MM if the team were to build a new stadium.
On that front, Harris offers both the idea of auctioning off naming writes as an instant opportunity for cash as well as hope that FedEx Field may soon be vacant. Soon is a relative term, as the prospectus offers 2031 as a moving date, much later than recent executive rumors of 2027-28, when the team’s current contract expires. It mentions that the new stadium could be built on its current site or at the site of Robert F. Kennedy Memorial Stadium near the Capitol but proposes that Virginia may offer the best incentives. A stadium bill had been passed in the Virginia House and Senate before the infamous allegations killed the bill before it could get to the governor.
The prospectus did its job of helping Harris to pool together multiple limited partners and make his bid, but the complications of the situation do not stop there:
- It’s been reported plenty that the NFL finance committee has several points of contention with the current Harris-Commanders deal. One of the reported issues, according to Mark Maske and Nicki Jhabvala of The Washington Post, is a reported “earnout” incentive in the deal. The “earnout” is reportedly a structure that would provide the seller, Dan Snyder, with “a deferred payment of an amount contingent on the franchise reaching specified financial benchmarks.” Its inclusion has been tabbed as one of many markers of an unusually complex agreement.
- The Commanders face further turbulence as the sale continues to stall. Jhabvala and Maske report that the team has been fined $425K by the District of Columbia and required to “refund more than $200K in deposits to D.C. ticket holders.” This punishment is reportedly part of a settlement reached with the office of D.C. Attorney General Brian L. Schwalb. Schwalb told The Post that the team “improperly held on to security deposits that it was required to return…misused those moneys…knowingly used the security deposit for purposes it wasn’t supposed to use the money for…(and) knowingly made it unnecessarily difficult for fans to get their money back.” Despite agreeing to the settlement, the team denies all the allegations listed above by Schwalb, according to Tom Pelissero of NFL Network.
- Lastly, in a bit of an older report from Maske and Jhabvala, legal representatives of more than 40 former Washington employees have urged for an added stipulation to the sale. The attorneys have asked NFL commissioner Roger Goodell and the league’s team owners to prohibit Snyder “from suing his accusers who participated in the investigations as a provision of the sale of the franchise.” In a letter sent to Goodell, the attorneys requested that Goodell and company include “a contractual provision that forbids Mr. Snyder from initiating litigation against any of the individuals who participated in the various investigations into the team, including but not limited to” the 40-plus clients they represent. Due to Snyder’s “well-earned reputation for being vindictive and litigious,” the group fears retaliation for their clients’ participation.