The sale of the Commanders has sparked an extended rollercoaster ride of reporting, with news coming from every angle. Some is right, some is wrong.
Mike Ozanian of Forbes.com, who reported in December that Daniel Snyder had multiple offers for the team “well north” of $7 billion, now reports that Josh Harris needs to adjust the financing of the final deal to purchase the team, for $6.05 billion.
Ozanian also reports that some NFL owners are concerned about the structure of the deal, which has an extensive number of limited partners and a large amount of debt. The NFL’s current limit for debt tied to the purchase of a team is $1.1 billion. Per Ozanian, the Harris deal includes $1.1 billion in secured debt and $1 billion in unsecured debt.
I won’t pretend to understand the niceties of leveraged buyouts and other corporate devices to make deals happen. The bottom line is that if feels as if Harris has to really hustle to make the numbers work. It could be far better for the team if he had enough money to just write a check for 100 percent of the equity, like Jeff Bezos does.
That’s why Commanders fans, euphoric at the possibility of Snyder being gone, should be concerned. If Harris doesn’t have the money to easily buy the team, will he have the money to properly run the team?
The owners might be willing to look the other way because, one, they want Snyder out as well and, two, the good owners don’t mind the prospect of competing with teams that might struggle, for example, to sign free agents due to cash flow challenges.
That’s one fact that often gets overlooked when considering ownership dynamics. The good owners love the idea of having more than a few not-good owners in the mix.