The House oversight committee announced Tuesday that it has reason to believe Washington Commanders and owner Daniel Snyder may have withheld or concealed ticket revenue and related funds as part of “a worrying, protracted and potentially illegal pattern of economic behavior.”
In a letter sent to the Federal Trade Commission on Tuesday, the committee said that as part of its ongoing investigation into allegations of a toxic workplace culture within the Commanders’ organization, it obtained evidence that the team may have underreported some of its ticket revenue to the NFL. Part of the ticket revenue is collected among the NFL teams as part of the league’s revenue sharing agreement.
The committee also informed the FTC, which is investigating misleading business practices, that the team could have deliberately withheld “approximately $ 5 million” in refundable ticket deposits, which it owed to fans and businesses.
“This new information suggests that in addition to promoting a hostile workplace culture, Mr. Snyder may also have cheated the team’s fans and the NFL,” the rep said. Carolyn Maloney (DN.Y.) in a statement.
“While the focus of our investigation remains the toxic working environment of managers, I hope the FTC will review this worrying economic behavior and determine if further action is needed. We must have accountability.”
In response to a request for comment, Commander’s spokesman USA TODAY Sports referred to the statement it issued in late March, in which it categorically rejected “any indication of financial inadequacy of any kind at any time.”
“We adhere to strict internal processes that comply with industry and accounting standards, are audited annually by a globally respected independent audit firm and are also subject to regular audits by the NFL,” the team said. “We continue to cooperate fully with the work of the committee.”
An NFL spokesman did not immediately respond to a request for comment Tuesday.
In its 19-page letter, first reported by The Washington Post, the House Oversight Committee describes how it received information about the alleged financial misconduct from Jason Friedman, a former sales manager who spent 24 years with the Commanders.
Friedman told the committee that, among other things, the commanders used “two sets of books” for financial accounting – one of which underreported ticket revenue to the NFL. He also sent emails to the committee between himself and other team leaders, appearing to discuss redistribution of ticket revenue, which they called “juice.”
An email exchange seems to point out that “juice” from a home game in Washington counts as income from a college football game between the Navy and Notre Dame.
“Even though we sold tickets worth $ 811,800, we reported sales to the NFL for a total of $ 721,600, leaving $ 162,360 in juice, money that would just go straight into the owner’s pocket and not have to be exposed to the NFL revenue sharing program,” he said. The Friedman committee according to an excerpt from his interview included in the letter.
Friedman also claimed that the commanders would “incorrectly convert certain unclaimed security deposit into revenue that the team could use for other purposes.”
According to the letter, Friedman told the committee that the team would require some fans or companies to pay a refundable deposit for a lease on premium seats, and then fail to refund that deposit when the lease expired. These deposits would also be converted into “juice,” Friedman argued.
“(Many) of (the customers) have forgotten it,” he told the committee, according to an excerpt included in the letter.
“In many cases, with corporate accounts, the name of attention on the account would change over time. So the person who entered into the lease and agreed to pay the deposit would be different from the person who managed the account when the lease expired. Ten years later, and the new contact point would not know to ask for a deposit. “
Attorneys Lisa Banks and Debra Katz, representing Friedman, described the House committee letter as “condemning”, saying it shows that the abuse of commanders “goes far beyond the sexual harassment and abuse of employees already documented.”
A Republican spokesman on the House oversight committee, meanwhile, dismissed the letter as a misuse of committee time and described Friedman as a “dissatisfied former employee who had limited access to the team’s finances.”
Contact Tom Schad at email@example.com or on Twitter @Tom_Schad.