Washington ownership unrest traces to money

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Even when it seems personal, it’s never personal; it’s strictly business.

The unrest in Washington’s front office, which seemed to have its roots in hard feelings between majority owner Daniel Snyder and a trio of minority shareholders, actually traces to money.

As explained by the New York Times, the problems arose when Snyder deferred paying annual dividends to Fred Smith, Dwight Schar, and Robert Rothman in late April. The dispute over money has sparked an arbitration proceeding, pursuant to league rules that nudge such disputes away from the court system and into alternative resolution procedures.

The turmoil has resulted in efforts to sell the minority shares, along with a request that Snyder simply buy them out.

In June, Snyder reportedly ejected all three of his partners from the team’s board of directors. The minority partners then asked the league to intervene. The Commissioner’s office appointed an arbitrator in late June.

It therefore should be less surprising, in hindsight, that FedEx (the company founded by Smith and a major sponsor of the team) went public in early July with a request that the team change its name. It also should be less surprising that Snyder is trying to prove that one of his partners (or possibly more than one) had a role in allegedly defamatory information being published about Snyder.

Some believe the minority partners are trying to force Snyder to sell his stake in the team. Per the Times, Snyder remains intent on keeping his equity interest and eventually transferring it to his children.

32 responses to “Washington ownership unrest traces to money

  1. Have to save up the cash for this year’s bloodbath. Seems like a sound business decision. Hard to believe the gentlemen couldn’t reach an agreement on that point. So it was simply the last straw in what has been a longer-term battle, one might guess.

  2. Failure to pay dividents owed to stock holders and failing to notify them in advance should have negative consequences, including an effect on the organizations credit worthiness. A strong case could be made that the organization is being mismanaged, and it would appear the minority ownership is pursuing this strategy. Snyder is on very thin ice, based on the facts as the public knows them to date.

  3. I read an article about high interest loans once. When asked who would take out such a loan, the agent said, “rich people, they have terrible credit”. Why do rich people often feel entitled to stiff people? It’s a trend for sure.

  4. Failure to pay promised dividends is illegal in publicly traded companies, but Washington is not a public company. We likely will never know what is in the contract with the minority owners.

  5. Snyder may have a lot of money but he’s clueless about how to run a football team. The Washington team has a proud heritage of being very good for the last several decades–that is, until Snyder took over. Being rich doesn’t necessarily mean you’re smart.

    He also seems like a tool.

  6. Money? Really? Ever since the passing of the barter system, the default explanation for any puzzling action, absent compelling evidence otherwise, is cabbage, moola, bread, scratch, filthy lucre … well, you get the idea.

  7. Washington fans just threw up a bit in their mouths–Synder intends to keep his interest in the team and pass it down to his kids thereby condemning the team to purgatory.

  8. Hey guys, you signed a partnership/operating agreement that was blessed by your attorneys, the league and Dan’s attorneys. Don’t whine now that you don’t like it. The words haven’t changed. No one cares when wealthy people whine to begin with and people have even less tolerance for wealthy people who whine, while making a ton of money, after their counsel negotiated and documented a deal. Live with it or take the redemption.

  9. “No one cares when wealthy people whine to begin with and people have even less tolerance for wealthy people who whine, while making a ton of money, after their counsel negotiated and documented a deal.”

    I’ve known several very rich people, both men and women, every one of them whined about money every time I saw them. I imagine these minority owners were sure they were going to make a killing as NFL owners and are now sorry they invested with Snyder, Oh well!

  10. When I was a stockbroker, I stopped in to see my biggest client. He seemed very angry so I asked him why. “I had to pay $6 Million in taxes today!” he almost shouted. They were his estimated taxes, so he was earning via payroll over $24 Million per year. Must be tough I thought to myself. This was 1984 or so. Very nice guy, left tons of money to charity when he passed. I doubt Snyder will do the same.

  11. If he does eventually transfer his majority ownership to his children let’s all hope the acorn fell far, far from the tree.

  12. Let this be a lesson to rich guys everywhere… if you’re rich enough to own a company yourself never bring in partners, it only causes problems.

  13. For all the talk about teams “tanking” for this or that player, this is an example of a leadership group trying to tank the team and the majority owner so that they can force him to either buy them out or sell his share to them at fire sale prices.

    Bear that in mind when you hear “leaks” about how awful Snyder is. Somebody stands to benefit the worse Snyder looks, so perhaps not everything is as it seems.

  14. If the minority partners are having problems with the contract THEY signed it is their own fault. Most partnership contracts have a buy-out formula or a right of first refusal so if they were negligent in getting the contract to include that, shame on them.
    Am not a Snyder fan but the league should not get involved in this or force him to sell. Doing so could bring real problems for the league (see St Louis vs Rams relocation).

  15. If it wasn’t for Art Modell, Dan Snyder might take the crown as the greatest franchise destroyer of all time

  16. I was surprised to learn that Fred Smith is a minority owner in the Washington Football team. He’s worth a whole hell of a lot more money than Dan Snyder. The founder of Federal Express, are you kidding me?

    Fred Smith was a college student, working on a business degree, when he took a course on marketing. You can’t do marketing without distribution, and at the time there were only two means of delivery, the USPS and UPS. So he wrote a term paper on how to improve mail services. The professor gave him a C and said it would never work. Smith then dropped out of college, wrote up the same business plan, took out a loan, and fundamentally changed mail services forever, with guaranteed next day delivery.

    And it worked! With tremendous success. Just to give you an example, Bezos basically used Smith’s business model to set up Amazon. Another tremendous success. Both of them are two of the richest men in the world.

    If it comes down to money, Smith could buy out Snyder with a snap of his fingers. That might require a league ruling, but it could happen in a matter of minutes. Smith is a much better businessman and marketer than Snyder, and he’s not so stupid to think he can run a football team. No, he would hire a general manager and head coach, and let them take care of team operations. Just like Murchison did with the Dallas Cowboys; he hired Tex Schramm, a former television executive, to manage the team and lead them to glory.

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