Document: Josh Harris sees Commanders windfall without Dan Snyder

Josh Harris, the Philadelphia 76ers co-owner who announced an exclusive deal to purchase the Washington Commanders for $6.05 billion, is betting that a change in ownership will solve the financial woes plaguing the franchise.

According to a prospectus prepared by Harris Blitzer Sports & Entertainment and its advisers and obtained by ESPN, Harris predicts that the removal of Dan Snyder as owner will boost attendance, ticket sales and sponsorship revenue, as well as the team's prospects for a new stadium. Commanders leadership "believes Virginia will offer the best incentive package -- potentially up to $1.5 billion" for a new home, the document shows. That sum would nearly double the American-record $750 million in public funds the state of Nevada put toward a new Raiders stadium in 2017.

The 43-page document -- titled "Commanders Investment Opportunity" and labeled "Privileged & Confidential" -- is notable not only because it's a rare glimpse into the financials of an NFL club but also because a prospectus needed to be drafted at all. The document was used to pitch other limited partners to buy into the deal alongside Harris. In recent history, team buyers such as David Tepper of the Carolina Panthers and the Walton-Penner family of the Denver Broncos were wealthy enough to purchase clubs on their own and there was no need to try to solicit limited buyers.

The document, dated March 2023, is among a number of versions of the prospectus that Harris' team assembled throughout the bid process. It lays out the current financial status of the Commanders, projects base and "upside" cases for the 2031-32 season, and includes projections that account for the building of a new stadium. And, like most financial forecasts, the document warns that "past performance is not indicative of future returns."

Last season, the Commanders made $173 million in local revenue -- dollars generated from tickets, sponsorships, parking and other team activities, according to the prospectus. In his base estimate, Harris projects that number will more than double to $380 million by the 2031-32 season -- and could hit $466 million that year if the team builds a new stadium.

"The Commanders historically ranked top in the league across all local revenue metrics and attendance. However, the team has significantly spiraled as a result of allegations against current ownership," the prospectus states. "As ownership changes, we see opportunities to substantially drive local revenue and bring the team back to a top NFL market."

A spokesperson for HBSE declined to comment, as did a spokesperson for the Commanders.

Snyder announced in November that he was considering selling the team, weeks after an ESPN investigation revealed he was threatening to "blow up" the league with dirt he claimed to have collected on other owners and NFL commissioner Roger Goodell. There are still hurdles remaining before the sale: Snyder is lobbying the league to limit what becomes public from attorney Mary Jo White's forthcoming report; there are questions around Snyder's legal indemnification; and owners are vetting HBSE's limited partners.

Because Harris -- whose net worth is $7.6 billion, according to the Bloomberg Billionaires Index -- needed help to assemble a $6 billion-plus bid, he recruited at least a dozen others, including NBA Hall of Famer Magic Johnson, to buy a stake in the team. The move adds risks. Owners have wondered, if the Commanders were to sink into financial trouble, what reserves does Harris have to fix it? But in league circles, it is not as risky as continuing to have Snyder involved in the NFL. Several league and ownership sources have said that if not for the disdain for Snyder driving the sale, there's no way owners would approve Harris' bid.

"It's taking some creative financing," an owner told ESPN.

A source close to Harris says the NFL has expressed no concerns to the investor group about their liquidity.

Still, those sources, who spoke to ESPN on the condition of anonymity due to the sensitive nature of these circumstances and the confidentiality of the prospectus, believe what Harris argues in the document: that a quick rebound for the team is within reach, thanks to a large base of fans who love the team but hate Snyder.

It's a sentiment shared at the top levels of the Commanders. The Snyders "knew the business side would get better on the other side of this," team president Jason Wright told ESPN in March. "They're not dumb."

Gate revenue, which has fallen by an inflation-adjusted two-thirds since 2008 to $58 million last season, is projected to rise to $127 million by 2031-32, according to the base estimate in the prospectus. In this outlook, the team's total revenue, which includes dollars from media rights, would soar from $545 million in 2022 to $959 million in 2032-33 -- or $1.05 billion with a new stadium.

The prospectus serves as a trip down memory lane, a reminder that even as Snyder was vilified during the first half of his tenure as owner, the team was a financial windfall. The prospectus estimates that Washington ranked first in league attendance in 2008, coming off Joe Gibbs' four seasons in his second stint as the team's head coach. In 2010, FedEx Field seated up to 84,500 fans, but the team has increasingly cut capacity, paring it to approximately 58,000 seats last season, the document shows. The prospectus characterizes the current fan base as "disengaged." It says that when allegations of a toxic workplace environment surfaced in 2020, the team dropped to 31st in league attendance rankings in 2021 and that it "has since failed to recover."

"The team's passionate fan base, historical loyalty and strong market suggest there is ample room to grow," the prospectus states.

The prospectus uses Harris' résumé at the 76ers to provide confidence. Harris estimates spending about $88 million to "help establish ownership's commitment to fan/player experience" -- including for new videoboards and a locker room update -- and says the group is assuming the need for $100 million for "immediate structural repairs" and maintenance to FedEx Field. Harris also estimates spending $43 million to upgrade loge boxes and suites. The document cites that under Harris, the 76ers climbed NBA ticket rankings from 27th in 2014-15 to fifth in 2021-22.

The prospectus also characterizes a new stadium naming rights deal as an opportunity for instant cash. According to the document, FedEx has a stadium naming rights deal worth $7.6 million annually for the Commanders and can cancel the current deal upon a "change of control." A new naming rights deal could be worth at least $30 million annually for the team, Harris' prospectus estimates, though "it could be significantly higher given the DC market and strong corporate presence."

"There's nothing but upside on the other side of this," Wright told ESPN in March. "There will be growth ... because there are people choosing not to do business with us that will choose to do business with us now."

One of the main selling points in the prospectus is that FedEx Field might not be the team's home forever. The prospectus estimates that the team will have a new stadium by 2031 -- with "potential to move into a new stadium earlier" -- a departure from the 2027-28 targets that some Commanders executives have privately offered for years. (The team's contract with Prince George's County expires in 2027.) Although those in league circles and many fans have hoped for a new venue at the site of Robert F. Kennedy Memorial Stadium, just east of the Capitol in Washington, the Harris document predicts Virginia will offer the best incentives for a new building, up to $1.5 billion. That figure is multiple times more than what had been discussed among Virginia politicians in 2022.

By March of last year, the Virginia House and Senate had passed a stadium bill. But lawmakers underestimated the public outcry after a February congressional roundtable at the U.S. Capitol, where five women who had been Commanders employees described numerous allegations of sexual misconduct, against the team's former senior executives and against Snyder himself. The bill died in the legislature's conference committee because its sponsors couldn't whip the votes to send it to the governor.

The prospectus also lists the FedEx Field site and RFK as potential locations for a new stadium and does not specify which site the group prefers.

A source with intimate knowledge of the complications and dynamics in getting a stadium built believes that 2031 is too optimistic, given that the team has no site, no deal and no financing -- and that Harris' group is believed to not have the ability to write a check for a new stadium, as Stan Kroenke did for most of SoFi Stadium in Inglewood, California. For some owners, a finished stadium can take upward of a decade to complete. The prospectus notes that the Commanders purchased an option to acquire 200 acres of land in Virginia for $100 million.

According to the prospectus, the land at the FedEx Field site is worth about $284 million, while the practice facility land is valued at about $441 million.

The prospectus also shows the Commanders owe $1 billion to the NFL, but the document does not detail the terms of the debt.

Harris cites other revenue streams for the NFL and its teams, including lucrative broadcast contracts, which the prospectus says pay about $383 million per year per team through 2033, and sports betting, which could add $10 million to $15 million to annual earnings. The prospectus also mentions the long-term "owner-friendly" collective bargaining agreement with the NFL Players Association -- the prevailing sentiment of the league and owners as the union prepares to announce finalists to replace executive director DeMaurice Smith. It addresses potential concerns about football's viability by saying, "We believe the go-froward [sic] risks around player legal settlements for CTE to be very low."