Billionaire problems
The sale of the Washington Commanders will be in the news more and more as we get past tomorrow’s Super Bowl, and new deadlines pass. It has been mostly good news(or no news) if you want to see Dan Snyder sell the team, but a story from the New York Post yesterday brings some bad news.
According to Josh Kosman, who appeared on the Kevin Sheehan Show yesterday, the bidding is down to two billionaires, and the potential sale price is not going to be anywhere close to the reported $7 billion that Dan and Tanya Snyder are looking for to get out of the NFL business. Josh Harris has reportedly toured the team’s headquarters and FedEx Field. Korman confirms that he is one of the two bidders left, but he said he’s only 80% sure of who the second bidder he is, and wouldn’t throw out a name.
Initial reports from late December said Bank of America Securities had received multiple bids above $7 billion. That number was floated by on of Dan Snyder’s favorite media outlets to leak info to, Forbes, and it turned out to be incorrect. The next report claimed that the highest bid was $6.3 billion, which also could have been a little high. The “bids” in late December, were actually indications of interest, as described in this Athletic article, and the actual deadline will be later in the month.
In a typical team sales process, the banker, in this case, Bank of America, will gauge the market and invite prospective buyers to submit the indications of interest. There is no obligation at this stage, and the figure included is malleable. Not every group that submits an indication of interest will move forward.
The buyers are then usually screened by the respective leagues and then given access to team financials, though many of the bidders, like Harris, have already been reviewed by the NFL during the sale of the Denver Broncos. During this period, it is not uncommon for these potential owners to take tours like Harris’. The process then moves to binding bids, which those familiar with the sale process again said are due in the coming weeks for the Commanders. After the first round, there may be subsequent rounds.
A binding bid, unlike the indications of interest, is akin to entering a contract to buy the club, and usually includes penalties if the buyer backs out.
According to Korman, both bidders maxed out at around $6 billion in their bidding, and they are scrambling to get minority investors involved to secure the money needed for the upfront payment for the team, and to finance the purchase, and have the money needed for a new stadium. He estimates that when the real bids come in they would be closer to $5 billion than $6 billion which could be a reason for Dan Snyder to pull back from the sale, leading to a confrontation with other NFL owners. Even a sale of $5 billion would set at NFL record, topping the $4.65 billion sale price for the Broncos last year.
“I think when they realize they can’t get to $6 billion they’ll say to Jeff Bezos, ‘It’s yours for $6 billion,’” the source said, reckoning that the two current bidders may end up with offers closer to $5 billion in the final round.
Amazon founder Jeff Bezos is once again brought up in this discussion, as he is the wealthiest potential bidder. There has been speculation about his interest in the team, and he has been linked specifically to to Washington, and the Seattle Seahawks. If the bids do come in lower than $6 billion, Bezos would likely be approached again by Bank of America, and offered the team for that price, and it would be up to Snyder to sell to the man he reportedly hates. Bezos owns the Washington Post, which has reported extensively on the toxic workplace that Dan Snyder has overseen for more than two decades.