Washington Commander owner Dan Snyder is no stranger to controversy, but the investigation into allegations of sexual harassment and a hostile work environment has now taken a turn. Evidence now indicates that the organization is manipulating its financial records in an attempt to avoid giving visiting teams their share of the revenue, as well as withholding refundable deposits from fans.
Congress is now passing evidence to the Federal Trade Commission (FTC). A letter obtained by the Associated Press and shared by the Washington Post outlines behaviors that Congress claims may involve Snyder and the commanders-in-chief for being “engaged in a worrying, protracted and potentially illegal pattern of economic behavior that made thousands of team fans victims and National Football League (NFL). “
At the heart of this latest investigation is a former employee who appeared before Congress and told lawmakers that the commanders kept two financial books. One of these books contained the actual numbers for the organization, and the other, which was sent to the NFL, underreported ticket sales so the team could avoid revenue sharing.
In addition, Congress has learned that the team implemented a scheme for more than a decade designed to keep refundable deposits set aside for seat licenses with no intentions of returning the deposit to fans when their licenses expire. Testimony from Jason Friedman, a longtime employee of the Commanders, described detailed lengths the team went to keep fans from the money they were entitled to.
“Mr. Friedman stated that after Mr. Snyder bought the team in 1999, instead of returning the security deposit to customers at the end of the rental period, team leaders instructed employees to establish roadblocks to prevent customers from obtaining the security deposit they were required to make. having – which effectively allowed the team to keep that money. “
The scheme, as presented by Friedman, involved getting former licensees to jump through significant brackets to request a refund. The team deliberately did not notify fans in the event of death or license expiration that there was a deposit in the account. If someone called or emailed the team to request a refund, they were told that it could not be processed without the request coming via a written letter sent to FedEx Field only via USPS or FedEx. This eliminated a significant number of potential refunds, where many people simply did not bother to send a letter.
The estimated funds from this scheme total $ 5 million, affecting approximately 2,000 people. Friedman went on to tell Congress that Commander leaders used the term “juice” as a code word for funds that were not reported to the NFL.
While the allegations of withheld security deposits being converted into an executive slush fund could lead to numerous civil lawsuits against the Commanders, the existential threat to Snyder’s ownership centers on the team is not accurately reporting ticket sales for their games. In one case, Friedman recalls being asked to take money from the top of a Commander’s home game and mistakenly treat it as revenue from FedEx Field, which hosted a match between Notre Dame and the Navy, which was discussed in an e -mail chain between Friedman and former Commanders CFO Stephen Choi.
“(Stephen – can you answer everyone with treatment instructions? This is bulk club sro [standing room only] order where I charge $ 55 per ticket but the tickets are priced at $ 44 in the system. A total of 14,760 game tickets are sold here at $ 11 per. juicebillet = $ 162,360)
Mr. Choi replied, “The juice goes to the Navy vs. ND game,” which according to Mr. Friedman meant that part of the revenue from Commanders game tickets – $ 162,360 – should be mistakenly treated as a non-divisible revenue from Navy vs. Notre Dame college football game. “
That meant over $ 160,000 was not reported to the NFL and subject to 40 percent revenue sharing for visiting teams, with commanders putting the entire amount in their pockets. The same thing was done with a Kenny Chesney concert, which also took place at FedEx Field.
Although the amounts discussed in this letter are meager in terms of total NFL revenue, they are in clear violation of the owner’s agreement – and could open up major headaches for the league if the NFLPA wants an answer. These are speculations only, but keep in mind that both the pay cap and the current Collective Bargaining Agreement (CBA) are based on reported NFL revenue. So any team that withholds or underreports revenue has a direct impact on players’ revenue cuts.
For what it’s worth, the commanders vehemently deny the evidence presented to the FTC. In a statement to the Associated Press, a spokesman for the team said:
“The team categorically rejects any proposal of financial unfairness 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. We continue to cooperate fully on the work of the Committee. “
The question remains: What will the NFL do now? Snyder has been a thorn in the side of the league for some time, but until this point they have done everything to protect him – as they do with all owners. But if the league confirms congressional findings in their own investigation, withholding funds from other owners would be unmanageable.
In the winter of 2017, former Carolina Panthers owner Jerry Richardson was named in a Sports Illustrated report on sexual harassment by at least one former employee. At the time, it was assumed that Richardson was aware that the report would come, and announced the same day that he intended to sell the team – later concluded in June 2018 to David Tepper, in a unanimous ownership vote.
Had that situation dragged on and Richardson had challenged the allegations, it is widely believed that the other 31 owners would have forced him out. It is conceivable that the NFL would do the same now with Snyder and end his ownership of the Commanders.
It is unclear what the next steps are at the moment. The NFL has not released a statement on the letter to the FTC, and it is not expected that they will contribute anything meaningful other than a note that they are continuing their investigation. Most of the drama will take place behind the scenes, but reading the tea leaves can really mean the end of Snyder’s time as Commanders’ owner.