Unsealed court documents show testy exchange between Dan Snyder, banker representing Washington Football shareholders

Unsealed court documents show testy exchange between Dan Snyder, banker representing Washington Football shareholders

A fight between owners of the Washington Football Team has spilled into federal court, and on Thursday, the judge presiding in that case ruled in favor of the Washington Post, which had argued for public access to the trial and its related documents.

Now that a portion of those documents have been made available, here’s what we’ve learned….

We know who owns how much of the team

The lawsuit lays out how the shares of “Washington Football, Inc.” are distributed.

Dan Snyder owns the most shares of the team – according to the lawsuit, he owns 40.459% of the shares of WFI.

Robert Rothman, who chairs the Black Diamond Capital investment firm, owns 15.168% of the team.

Dwight Schar, the chairman of NVR Homes, also owns 15.168%.

Fred Smith, the founder of FedEx, owns 10.163% of the team.

Snyder’s mother, Arlette Snyder, owns 6.489% of the team, and his sister, Michele Snyder, owns 12.552%.

The lawsuit states that “Mr. Snyder is the only stockholder of WFI who holds voting shares,” meaning he calls the shots on matters related to the team.

The agreement reads: “Daniel M. Snyder was issued Voting Stock and will serve as the Company’s Voting Stockholder based upon (A) his management skills, (B) his long-standing association with the other Founding Stockholders, (C) his financial capability to provide significant additional funds to the company and (D) the fact that Daniel M. Snyder’s Percentage Ownership Interest significantly exceeds that of each of the other Stockholders."

A list of shareholders in the Washington Football Team. U.S. District Court of Maryland

A list of shareholders in the Washington Football Team.

U.S. District Court of Maryland

The fight over Snyder’s right of first refusal

On Oct. 23, Rothman, Schar and Smith notified Snyder of their intent to sell their shares (a collective 40.499% of the team). The purchaser and the price have been redacted in the lawsuit, but their identity has been reported by the Washington Post to be the billionaire co-founders of Clearlake Capital, a private equity firm based out of California.

Those co-founders are Behdad Eghbali and Jose Feliciano. The deal also reportedly includes Feliciano’s wife, Kwanza Jones, a singer/songwriter and philanthropist.

The shareholder agreement gives Snyder first right of refusal to purchase any shares that are put up for sale at the price and general terms agreed to by the buyers.

Snyder indicated he would like to purchase the shares owned by Smith and Rothman (25% of the team) at that price, but will not purchase Schar’s shares.

The three have sued, asking the judge to declare that Snyder must either purchase all or none of the shares, given that their value is higher as a group than the shares would be individually.

The Moag text

Snyder’s team included a screen grab of a text message allegedly sent by John Moag, the Baltimore investment attorney facilitating the sale on behalf of the three partners, to Snyder.

The text reads, in part:

“If you continue your game, you know what I know and what I have never spoken about. And you know it has nothing to do about the media s*** … it’s the more serious s***.

“If you want to get to a clean conclusion, let me know. If you want a s*** show, we are on for that too.”

A text message alleged to be from Baltimore investment banker John Moag to Washington Football Team owner Dan Snyder. U.S. District Court of Maryland

A text message alleged to be from Baltimore investment banker John Moag to Washington Football Team owner Dan Snyder.

U.S. District Court of Maryland

The public documents are heavily redacted

The judge allowed any information related to the sale of the team to be redacted from the public filings, given that such disclosure could impact the ability of the parties to negotiate or complete the sale.

As a result, large portions of the filings look like this:

The documents released are heavily redacted.

The documents released are heavily redacted.

U.S. District Court of Maryland

The sellers advised Snyder to buy them out early

In a letter dated June 1, 2020, the beginning of the sale process, an attorney representing Rothman, Schar and Smith sent an e-mail to Snyder’s attorney.

The letter said that in order to complete a sale, any buyer would want to “engage in a detailed review of WFI’s books and records, including but not limited to, all WFI’s transactions with any insiders or entities controlled by insiders.”

The letter goes on to suggest that if Snyder bought the three men out, he could avoid that process.

It reads: “It would seem worthwhile for Dan to consider putting forth his best efforts to lead the buy-out effort as we think this is likely the best scenario to avoid an expensive and lengthy due diligence process and detailed review of WFI’s books, records, and past transactions and proceed to an amicable and expedited closing on the sale of my clients’ interests.”

FedEx threatened to take its name off the stadium

Smith, one of the owners, is part of an e-mail exchange with a FedEx spokeswoman in the days after his company made a public call for the then-Washington Redskins to change their name.

An e-mail attributed to “Captain Smith” advises the following:

“The only thing that is important is FedEx reached a ‘tipping point’ in the terms of our stadium sponsorship contract re: damage to our brand and we formally put WFI on notice we were terminating it after 2020 season if name was not changed.”

Where things go from here

The NFL encourages all disputes to go to private arbitration, to avoid public fights like the one on display here.

That arbitration is ongoing, as is the court case in Maryland.

Both sides are also awaiting an independent investigation from attorney Beth Wilkinson, which was commissioned after a series of Washington Post reports alleging widespread sexual conduct among senior management with the team.