Washington Commanders owner Dan Snyder is no stranger to controversy, but the investigation into claims of sexual harassment and a hostile work environment has now taken a turn. Evidence now points to the organization manipulating its financial records in an attempt to avoid giving visiting teams their share of revenue, as well as withholding refundable deposits from fans.
Congress is now turning over evidence to the Federal Trade Commission (FTC). A letter obtained by the Associated Press and shared by the Washington Post outlines behavior which Congress claims may implicate Snyder and the Commanders for being “engaged in a troubling, long-running, and potentially unlawful pattern of financial conduct that victimized thousands of team fans and the National Football League (NFL).”
The crux of this latest investigation is a former employee who appeared before Congress and told lawmakers that the Commanders kept two financial books. One of those books held the actual figures of 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 over a decade designed to keep refundable deposits set aside for seat licenses, with no intention of returning the deposits to fans when their licenses expired. Testimony from Jason Friedman, a long-time employee of the Commanders, detailed the lengths the team went to keep fans from the money they were entitled.
“Mr. Friedman stated that after Mr. Snyder purchased the team in 1999, rather than return the security deposits to customers at the end of the lease term, team executives directed employees to establish roadblocks to prevent customers from obtaining the security deposits they were due—effectively allowing the team to retain that money.”
The scheme, as presented by Friedman, involved making former license holders jump through considerable hoops to request a refund. The team knowingly did not notify fans in the event of a death or license expiration that there was a deposit on the account. If someone called or emailed the team to request a refund, they were told it could not be processed without the request coming via a written letter, mailed to FedEx Field via the USPS or FedEx only. This weeded out a considerable number of potential refunds, with many people simply not going to the effort of mailing a letter.
The estimated funds from this scheme total $5 million, impacting approximately 2,000 individuals. Friedman went on to tell Congress that Commanders executives used the term “juice” as a codeword for funds that were not being reported to the NFL.
While the claims of withheld security deposits being converted into an executive slush fund could prompt numerous civil cases against the Commanders, the existential threat to Snyder’s ownership centers on the team failing to accurately report ticket sales at their games. In one instance Friedman recalls being directed to take money off the top of a Commanders home game, and falsely process it as revenue from FedEx Field hosting a game between Notre Dame and Navy, which was discussed in an email chain between Friedman and former Commanders CFO Stephen Choi.
“(Stephen – can you reply all with processing guidance? This is the bulk club sro [standing room only] order where I am charging $55 per ticket, but the tickets are priced at $44 in the system. There are a total of 14,760 game tickets being sold here with $11 per ticket of juice = $162,360)
Mr. Choi responded, “The juice goes to Navy vs ND game,” which according to Mr. Friedman meant that a portion of the revenue from the Commanders game tickets— $162,360—should be falsely processed as a non-shareable revenue from the Navy vs. Notre Dame college football game.”
The meant that over $160,000 was not reported to the NFL and subject to the 40 percent revenue split for visiting teams, with the Commanders pocketing the entire amount. The same was done with a Kenny Chesney concert, which also occurred at FedEx Field.
While the amounts being discussed in this letter are paltry in terms of total NFL revenue, they are in clear breach of the owner’s agreement — and could open up major headaches for the league, should the NFLPA want answers. This is only speculation, but keep in mind that both the salary cap, and the current Collective Bargaining Agreement (CBA) are based off reported NFL revenue. So, any team withholding, or underreporting revenue directly impacts the players’ cut of revenue.
For what it’s worth, the Commanders are vehemently denying the evidence presented to the FTC. In a statement to the Associated Press a team spokesperson said:
“The team categorically denies any suggestion of financial impropriety of any kind at any time. We adhere to strict internal processes that are consistent with industry and accounting standards, are audited annually by a globally respected independent auditing firm, and are also subject to regular audits by the NFL. We continue to cooperate fully with the Committee’s work.”
The question remains: What will the NFL do now? Snyder has been a thorn in the league’s side for some time, but up to this point they’ve done everything to protect him — as they do with all owners. However, if the league corroborates Congress’ findings in their own investigation, withholding funds from other owners would be beyond the pale.
In the winter of 2017 former Carolina Panthers owner Jerry Richardson was named in a Sports Illustrated report for sexually harassing at least one former employee. At the time it was presumed Richardson was aware the report was coming, announcing the same day that he was intending to sell the team — later finalized in June of 2018 to David Tepper, in a unanimous owner vote.
Had that situation dragged out and Richardson contested the claims, it’s widely believed that the other 31 owners would have forced him out. It’s conceivable the NFL would do the same thing now with Snyder, ending his ownership of the Commanders.
It’s unclear what the next steps are at this time. The NFL has not released a statement regarding the letter to the FTC, and it’s not expected they’ll contribute anything meaningful aside from a note that they’re continuing their investigation. The majority of the drama will play out behinds the scenes, but reading the tea leaves this could really spell the end to Snyder’s time as Commanders’ owner.