How worried should we be about Josh Harris’ cash flow when it comes to buying the Commanders?
An article by Daniel Kaplan in The Athletic, one he explained in full with Kevin Sheehan on The Team 980 earlier Wednesday, reports that Josh Harris’ bid for the Commanders is much different than the normal bid – including the fact that Harris is reportedly using his ability to borrow outside the framework of the ownership structure to get a loan from Dan Snyder himself!
And that, as well as Harris borrowing the max against the team and maybe more against his other teams, rings some alarms in Danny Rouhier’s head.
“This is my concern – not that a sale is going to happen, because it’s incredibly complicated but I believe it will get done, but maybe you know someone who stretched over their budget and became house poor…and that’s what it looks like to me,” Danny said. “Only a handful of people on the planet can walk in witht his kind of cash, but the most important things when new owners take over is a new stadium and a new facility – so you need billions when you get going! If they’re out of money now and need to borrow from Dan just to get this thing over the finish line, that’s not good.”
However, Grant has an interesting take on the whole loan deal, at least.
“But doesn’t this prove that he wants to sell?” Grant asked. “Your contention all along was that this was being done kicking and screaming and he’s being forced out, but if he is having to help the buyer, doesn’t this prove he wants to sell?”
Danny doesn’t see it that way, thinking $200 million is a drop in the bucket if he’s getting nearly $6 billion first, although to Grant, it’s proof he no longer wants to be the owner – with one other takeaway.
“Your concern is that every cent available is going to the team, and here’s my rebuttal: we just talked last week about a guy who is worth $12 billion that was added to this group, and about the former CEO of Google worth $20 billion joining this group,” Grant said. “That’s two people worth more than twice the team’s value out of the group – don’t you think they have enough money to do everything that needs to be done on the back end? You can tap into some of those bank accounts to fund the operations, and they’ll get their money on the back end.”
Grant’s idea is that collectively, this ownership group’s collective wealth crushes any other NFL group’s, but Danny thinks there’s a difference and a reason why those guys are limited partners – and it shows in the fact that Harris is taking a loan from Snyder to finish the deal.
That may play into the fact that one individual needs to own a minimum plurality of the full team per NFL rules, so perhaps, that $200 million is the last bit he needs to be able to make the purchase (and not have it be considered equity of someone else).
And that’s why Danny is worried: there’s not that much liquidity, and “they’re counting on the ‘not Dan Snyder bump’ to boost them, but I don’t know if it’s enough.”
“If it were that easy, they wouldn’t have to go through all these incredibly weird approvals and conditions – everything seems like we’re barely getting over that line,” Danny said.
So what if the fear is true, and the Harris group is “house poor” once the sale is done?
“The only benefit we have is no Snyder, which is still a win, but all you have is smoke and mirrors and a couple gimmicks. You can’t do the things you need to do to build a new stadium and a new facility and het the fans back. The honeymoon will end at some point, and it has to be built on something better than a house of cards.”
Grant doesn’t think Harris, as an owner of two other American teams plus an English soccer team, would even engage if he couldn’t fund it, and still believes the limited partners will be the ones funding the back end, so perhaps all the fear is unjust?
Follow Grant & Danny on Twitter: @granthpaulsen & @funnydanny
Keep up with 106.7 The Fan via:
Audacy App | Online Stream | Twitter | Facebook | Instagram