The Washington Commanders Owe Fans Millions In Refundable Deposits And Hid Revenues From The NFL

Dan Snyder and the Washington Commanders have gone from being in trouble with the NFL, as the league investigated numerous allegations of a toxic workplace environment (ultimately leading in the firing of Jon Gruden from the Raiders due to emails to Washington executive Bruce Allen), to being in trouble with Congress, which is a far worse fate.

The Congressional Committee on Oversight and Reform began looking into the organization’s business practices recently (on top of the hostile workplace allegations), learning from a former executive that the team kept “two books” of finances to deceive the league, and on Tuesday released its findings to the Federal Trade Commission, including on the record statements from former team sales executive Jason Friedman.

You can read the report in its entirety here, but there are two findings highlighted at the top of the report that figure to be the most damning to Snyder and the organization, both in losing further trust with fans and the league itself. The first is that the team purposefully created roadblocks and made it difficult for fans to get back their refundable deposit placed for season tickets after their lease term had ended, resulting in $5 million still having not been returned as of 2016.

According to Mr. Friedman, and consistent with documents he provided to the Committee, as of July 2016 the team had unreturned security deposits for “around 2,000 accounts” belonging to customers and fans totaling “approximately $5 million.

That money was then hidden from the NFL to avoid having it count as revenue from football business, along with other NFL ticket revenue that the organization would mark as revenue from licensing fees and handling fees, so it wouldn’t end up in the league’s revenue-sharing. Friedman explained to the committee how they would do this by collecting $11 more per seat from customers than they reported to the NFL and would hide that as licensing fees for things like college football games and concerts at FedEx Field.

Well, in this particular case and other cases similar to this, $162,360 was shielded from the NFL revenue sharing program; that even though we sold $811,800 worth of tickets, we reported that sale to the NFL at a total of $721,600, leaving $162,360 of juice, of money that would just go right into the owner’s pocket and didn’t have to be exposed to the NFL revenue sharing program.

So our stadium has a manifest similar to a manifest that you would see for airplane seating, and each seat has a dollar amount assigned to it. In this particular case, the dollar amount assigned to each one of these seats in the manifest was $44; but in fact we collected $55 per seat from this customer, times 14,760 seats times $11 per seat equals $162,360, which that amount would then be allocated to a different type of line item in our database, a line item that was not exposed to NFL revenue sharing.

The fact that the committee sites specific emails showing this practice taking place, along with this interview from Friedman, certainly seems to provide them with a smoking gun to pin some serious financial fraud claims on the organization. From an NFL perspective, if there were anything that would get other owners to act against Snyder and try to push him out, withholding money from the rest of them certainly seems like the thing that would get their attention. You can get away with a lot of things as an NFL owner, including fostering a toxic workplace environment, but messing with the money is not on that list and it’s very possible that like Al Capone, Snyder won’t be going down for the worst things, like dreadful treatment of women and other employees within the organization, but for the NFL’s version of tax evasion, hiding money from the league’s revenue-sharing program.