The Josh Harris bid includes an “earnout” provision that defers payments to Daniel Snyder

House Oversight Committee Holds Hearing On Washington Commanders Football Team
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Some who buy NFL franchises can press a button and purchase 100 percent of the equity. Some can’t.

Those who can, such as Jeff Bezos, presumably decided to wait for a franchise that doesn’t fall into the fixer-upper category. Josh Harris, whose group will pay $6.05 billion to Daniel Snyder for the team, doesn’t fall into the category of finger-snap transaction.

A new item from the Washington Post further details some of the unique aspects of the Harris bid. For example, the Post reports that the deal includes an “earnout” clause that would give Snyder deferred payments based on the franchise “reaching specified financial benchmarks.”

Thie dovetails with Tuesday’s report from regarding Harris’s belief that the sale will unlock significant revenues, based simply on the fact that Snyder is gone.

The deal continues to present various wrinkles that test the limits of league rules — along with the willingness of owners to look the other way, if it means getting rid of Snyder. Per the Post, the NFL’s finance committee believes that the Harris deal includes debt that falls “significantly above” the $1.1 billion limit for franchise acquisitions.

The deal also includes a significant number of limited partners, who reportedly were recruited by a prospectus that makes the case for a major bump in book value based solely on kicking Snyder to the curb.

Again, the fact that the other owners hope to rid themselves of Snyder works to the benefit of Harris. The league is likely to do whatever has to be done to approve the deal and ditch Snyder.

Amid the euphoria over a post-Snyder NFL, it’s important to not lose sight of the fact that the Harris group needs to have the capital in place to properly run the team. If the bid is being held together with Scotch tape and superglue, Will Harris and company be able to compete with the richest of the rich owners, who can get things done without resort to lines of credit or creative accounting practices?

At a time when Commanders fans are willing to embrace anyone but Snyder, they need to ask whether they’ll be getting someone who will allow the Commanders to survive or to thrive amid the other teams. Either Harris is taking advantage of the owners’ collective willingness to let him cut corners, or Harris will end up trying to race the superyacht set in The Flying Wasp.

32 responses to “The Josh Harris bid includes an “earnout” provision that defers payments to Daniel Snyder

  1. Lol only the Commanders. “Hey! Let’s go the Bobby Bonilla route!!” 😂😂😂

  2. Snyder is laughing at the NFL for falling over-themselves to get rid of him

  3. Earn outs are a common feature in small to mid-size acquisitions. A bit odd to see it in the sale of a sports franchise. But hey, both sides are desperate. The NFL wants to get rid of Snyder and Snyder wants to leave on his terms with as much cash as he can generate (whether today or tomorrow).

  4. I guess they picked one guy to get rid of Synder, they could deal with. If you can’t pay for a franchise, why even fast track the guy? Not a Washington fan but the fans deserve better than this.

  5. This whole process is a joke and really underscores the fact that the franchise is just not worth anything near $6B. The league is hoping to rid itself of Snyder by bringing in an ownership group that really can’t afford to properly run the team.

  6. Sounds a lot like Art Modell with the scotch tape and super glue. LOL. Good Luck.

  7. Dirtdog is right. NFL will bend the rules. I think a new stadium is not in the cards. Debt is maxed out. I doubt the cash flows from the franchise supports their share of a new stadium. Harris and partners would need to contribute additional capital. WC will be playing at Fed Ex for the forseable future.

  8. Read that at least 2 of Harris’ partners are worth much more than him. Maybe the NFL should ask one of them to take over as majority owner so the team had adequate capital to operate. Harris could be reduced to a minority partner. When the Wilfs bought the Vikings in 2005(?) initially they were a minority partner in that group but, when the proposed majority owner was shown to be way over his head, the Wilfs took over. Maybe the same could be done here?

  9. This is such a clown show lol all because the nfl corporation wants to rid the league of individual owners because a couple owners who care about anything other than making more money like actually caring about their fans, history and tradition of the game is not something the nfl is interested in. they want every team is owned by shareholders and controlled and ran by a board of directors who’s only goal is profit margins and all decisions are revenue based. Pathetic.

  10. Yikes gonna be. More? Lawsuits after this I don’t see dan getting his money on time.

  11. If this causes the bubble in valuations to pop, and bring their worth down to reality, I’m all for it. Might even force some humility on Park Ave (HA! I like making myself laugh)

  12. The NFL thought Dan Snyder was a pain.
    They will be in for a rude awakening once private equity gets involved.

  13. May 17, 2023 at 5:50 pm
    hailrskins says:

    “We’d take a homeless man over Snyder.”

    He’s busy in Cleveland drafting and signing Quarterbacks.

  14. No one else wants the team? Someone that can afford the whole team? Not just make payments?

  15. So how much for a hot dog at RFK when the owner group can’t afford anything? Sad day for Washington fans.

  16. I’m sure the media will “create” a new villain before the 2023 NFL Season is finished. Perhaps someone who still believes in free speech. Perhaps someone who supports politicians not approved by the FBI. A new enemy will be found shortly.

  17. The real irony is that Daniel Snyder represents everything the NFL is truly about.

  18. How many financial partners does Harris have? None have been vetted. What could go wrong?

  19. The NFL is pricing themselves out. How many people that want to own an NFL team have access to that type of liquidity? Most teams will probably stay in the family when the owners pass away because no one else can afford to pay the price according the current NFL standards.

  20. Wait , so you’re telling me I coulda bought this team on Lay-a-Way ! I missed the boat skipper 😀

  21. As noted above, such clauses are typical, even in larger deals, with privately held companies, though I have not read about them in sports deals. And in this case where there is a history of less than up-front accounting I can see why they would be important. Would anyone trust Snyder’s financials?

  22. I love that Dan is making the sale as painful as possible for the NFL.

  23. The whole “poverty ownership” line is such a nothingburger. For instance, the 1.1 billion dollar limit on borrowing. You are limited to borrowing 1.1 billion if the franchise costs 3 billion. You are also limited to borrowing 1.1 billion if the franchise costs 10 billion.

    A lot of the “poverty ownership” angle comes from the conflict between the NFL’s archiac rules vs. the new reality of how much teams are worth.

    THere is NOTHING about this Harris lead ownership group that indicates they don’t have the funds to do what they need to to run the team.

  24. The other truly bizarre thing in this is people are actually reading this “earnout” clause as some sort of indication that Harris is poor or that Snyder is getting one over on him. The reality is 100% opposite. Harris has found a way to say the price will NOT be 6.05 unless we meet certain financial benchmarks. Essentially, this shows GOOD things about Harris. He’s not putting all his money down no matter what. And Snyder, he doesn’t get the money no matter what.

    This shows financial savvyness on the part of Harris, not the reverse. So many fans already have the “poverty” narrative in their head, they are not actually reading the details critically and understanding what is being said.

  25. Changing the team’s name to something…ummm…good, might help unlock those significant revenues.

  26. How much of the Sixers and Devils does he own? Seems like he could generate a lot of cash pretty quickly by selling his shares of those teams, but of course billionaires don’t like to sell appreciating assets. For some reason I think this whole thing has The Dodgers and Frank McCourt written all over it. The Skins could find themselves at the salary floor every year with creative accounting issues and a whole new set of problems. Probably still better than where they are now, but unless the fans and sponsors respond to the Snyder ouster with a lot of cash, this isn’t a great look.

  27. Snyder won. He’s laughing all the way to the bank. He leveraged the hate and disgust for him and turned it into a financial milestone.

  28. austinspencer says:
    May 18, 2023 at 10:31 am
    Snyder won. He’s laughing all the way to the bank. He leveraged the hate and disgust for him and turned it into a financial milestone.

    No, Snyder did not purchase the team to make a financial windfall. He grew up a fan of the team and wanted to win very badly and become a local hero ala Jack Kent Cooke. He may have cashed out but he LOST in the way he wanted to win the most.

  29. Here is a fact people ignore. Some owners of very successful teams have a net worth of around 1 billion dollars. Two examples are Mike Brown (Cincinnati) and Art Rooney (Steelers). But since in neither case was the team purchased for 6 billion dollars, no one on the Internet pauses to think that maybe Harris and team DOES have the finances to be successful but that what you are seeing is 100% a function of the team’s sale price.

    All I’m saying is THINK about what you read. I think personally there is a lot of things being thrown out by the media for click bait since so many want to see a disaster in Washington.

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