We’ve got a new old entry into the Commanders sale sweepstakes once again, thanks to the news over the weekend that former Duke star Brian Davis has reportedly offered up a $7 billion cash bid to buy the team, which is nearly one billion more than Josh Harris’ bid.
Arif Hasan from the Pro Football Network joined BMitch & Finlay on Monday to talk about that report and his article on Monday morning about Davis and who he is – and maybe isn’t.
“I think the offer is a little surprising and perplexing, because any news we’ve had around Brian Davis as a business person has been about millions, not billions,” Hasan said. “He’s tried to buy franchises before, and did buy a minority stake in DC United, which is about one percent and nowhere close to being the majority shareholder.”
The issue with Davis’ previous attempts to buy a franchise? He took out a lot of loans, Hasan said, to try to buy the Memphis Grizzlies, and that led to a lot of trouble.
“He tried to buy the Grizzlies and that fell through, and that was kind of a preview of the concern surrounding him because of the loans,” Hasan said. “One of those loans was about $3 million from Scottie Pippen, and he paid back half of that and Pippen sued him for the rest. Also, aside from that is a variety of real estate holdings, and from what I can tell, based off public records available, he’s been sued by at least four entities and they’ve taken big losses and defaulted on a number of loans. It’s a history of lawsuits he has lost, and it’s been difficult for him to build up the capital to pay back these loans, so you can see why there’s skepticism he has $7 billion in cash.”
As Brian Mitchell noted, out of $7 billion, the NFL is going to want $2 billion of that up front, and that means you gotta have the cash – so Hasan wonders if it’s a smokescreen of some sort for Snyder to get more money and less responsibility.
“The NFL always wants a majority stakeholder whose investment is not leveraged against anything else,” Hasan said. “That’s tough. I don’t know where he got a billion dollars, but I have a concern that this is kind of a motivated offer to increase the sale price of the team or include the indemnity of Dan Snyder and insulate him from things he’s being investigated for. That was not offered in the Harris bid or the Apostolopoulos bids, as far as I can tell. But rolling this into the deal, I think Snyder more than Davis benefits from the bigger deal with indemnity, so I wonder if there is another angle here.”
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Hasan also wonders if a few investors who bought a few shares of Davis’ company, Urban Echo Energy, at an inflated price may have inflated the valuation of the company, which might let Davis borrow more – which is unethical at best and fraud at worst.
“The problem is, that is not a fair assessment, and if there was a motivated reason to sell at that price, some would say that’s fraud, which is a Federal crime,” Hasan said. “I don’t know if that’s what happened, but it is possible to create a high valuation of a company by selling shares at a high price – and when people talk about intellectual property, it is more than just likeness, it’s the access to patents and copyrights and technology. And if he owns all the shares in the company except those he sold, he could say his net worth is $50 billion, sell the shares, and have the cash on hand.”
JP Finlay noted that Robert Kraft and Jerry Jones, two of the richest owners in sports, are worth 20-25 percent of that $50 billion, so there may be something shady, or as BMitch said “laughable,” going on.
“Very few companies appear to be worth $50 billion, even if they’re not public facing,” Hasan said. “I can’t find any evidence that Urban Echo Energy is LEED certified, which could be a clerical error, but the last time a company with that name surfaced was in 2016, with a real estate development plan in Atlantic City – where Davis was born – and five years later, nothing had happened on the site. There are at least nine companies with that name registered, all of which have been registered in the last year…so I’m just going to say it’s unlikely.”
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