Daniel Kaplan from The Athletic published a story this week reporting that Josh Harris, in his bid to buy the Commanders, is getting a loan from…Dan Snyder, the very man he’s buying the team from.
“The big takeaway for me, at least according to the story, is that this sale is not over yet, and not a slam dunk,” Kevin Sheehan said as he opened Wednesday’s show discussing the news. “The Harris bid, according to Kaplan, is super complex – and includes a reveal that Snyder himself is going to loan Josh Harris $200 million to help complete the sale!”
Indeed, Snyder is reportedly loaning Harris that sum as “seller financing,” which can help a deal go forward, and in the story, Kaplan’s suspicion is that the $200 million total is right based on previous thoughts that the Harris group would pay $5.8 billion of the $6.05 billion total price up front and the rest over time.
“We’ve heard the word atypical used to describe this sale, but what Kaplan really makes clear is that the structure of this deal is a stretch for the NFL, Sheehan said. “There are 17 limited partners, and a maxing out of the amount you can borrow against the team, which is $1.1 billion, but there’s also the suggestion he could borrow against his other sports teams as well – but in the story, Kaplan says that the NFL’s preference is getting rid of Dan Snyder over working through Harris’ complexities.”
So, what did Kaplan have to say when he joined Sheehan later in the show?
“The finance committee is meeting in New York today to review this proposed deal, and there are certain issues with this deal regarding NFL debt rules,” Kaplan said, alluding to borrowing both against the team and outside the framework of the purchase group (aka Snyder). “He’s borrowing the max against his team as collateral, and he’s proposing to borrow against his other sports teams, which gives the league pause, because they don’t want the owner to be debt-ridden and not be able to finance other things around the team.”
Is it really that the NFL wants Dan Snyder out so bad that they’re willing to overlook all that just to get anyone else to own the Commanders?
“That’s what people have told me: if this were any other team, they wouldn’t give it a second look,” Kaplan said. “This has never been done before in professional sports, where a prospective buyer submits his bid to the league without the signature of the current owner, so this is very strange.”
Of course, not every franchise is worth $6 billion – in fact, the last sale not even 12 months ago was roughly 75 percent of that, which creates a problem the league has tried to actually prevent.
“The league actually raised the debt limit from $600 million to $1.1 billion to try to account for this, but prices have gone from $2.1 billion with the Panthers in 2019 to $4.65 billion for the Broncos last year – and there aren’t a lot of people who can just put down $5 billion like that.”
So, is there still a chance this deal doesn’t get done?
“It’s been portrayed this way, but it’s certainly not a slam dunk,” Kaplan said. “People want Snyder gone, but for all the reasons we discussed, plus the indemnification issue, it’s not a sure thing. You have to vet all 17 limited partners, too, which is a challenge, so there’s a better chance than not this goes forward, but it’s not the slam dunk it’s portrayed as.”
Kaplan is confident that if, for any reason, the Harris bid falls through, someone will still buy the team, and Jeff Bezos is the ‘perfect solution’ – but as he says, ‘the NFL is bending over backwards to make this happen, so I still think that come Hell or high water, they’ll do whatever they can to push it through,' and we'll know a lot more after the owners' meetings later this month.
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