Josh Harris, the Philadelphia 76ers co-owner who announced an exclusive deal to buy the Washington Commanders for $6.05 billion, is betting that a change of ownership will solve the franchise’s financial woes.
According to a prospectus compiled by Harris Blitzer Sports & Entertainment and its advisors and obtained by ESPN, Harris expects that removing Dan Snyder as owner will boost attendance, ticket sales and sponsorship revenue, as well as the team’s prospects for a new stadium. The document makes clear that the leaders believe Virginia “will offer the best stimulus package — possibly as much as $1.5 billion” for a new home. That amount would double the US record $750 million in public money the state of Nevada put into building a new Raiders stadium in 2017.
The 43-page document—titled “Commanders Investment Opportunity” and named “Privileged & Confidential”—is notable not only for its rare glimpse into an NFL club’s financials, but for the need to craft a prospectus at all. The document was used to promote other select partners to buy into the deal along with 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 buy the clubs themselves, and there was no need to try to attract specific buyers.
The document, dated March 2023, is among a number of versions of the prospectus collected by the Harris team during the bidding process. It outlines the current financial position of the Leaders, presents both baseline and “bullish” cases for the 2031-32 season and includes projections representing the construction of a new stadium. Like most financial projections, the document warns that “past performance is not indicative of future returns.”
Last season, the Chiefs generated $173 million in domestic revenue — dollars generated from tickets, sponsorship, parking and other team activities, according to the preliminary prospectus. In his base estimate, Harris projects that number will double to $380 million by the 2031-32 season — and could reach $466 million that year if the team builds a new stadium.
The prospectus reads: “The Leaders have historically ranked first in the league across all metrics of home revenue and attendance. However, the team has escalated significantly as a result of allegations against existing ownership.” “As ownership changes, we see opportunities to significantly increase local revenue and return the team to the NFL’s top market.”
A spokesperson for HBSE declined to comment, as did a spokesperson for Leaders.
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 he had collected from other owners and NFL Commissioner Roger Goodell. There are still hurdles remaining before the sale: Snyder is pressing the league to limit what becomes public of attorney Mary Jo White’s upcoming report, there are questions about Snyder’s legal compensation, and the owners are vetting HBSE Limited Partners.
Because Harris — who has a net worth of $7.6 billion, according to the Bloomberg Billionaires Index — needed help putting together a bid worth more than $6 billion, he recruited at least a dozen others, including NBA legend Magic Johnson. , to buy into a team. This step adds risks. If the Leaders were to be mired in financial trouble, the owners wondered, what reserves would Harris have to repair? But in league circles, it’s not as dangerous as continuing to involve Snyder in the NFL. Several league and ownership sources said that if Snyder did not lead the sale, there would be no way Harris’ offer would be accepted.
“It takes some creative funding,” one of the owners told ESPN.
However, those sources, who spoke to ESPN on condition of anonymity because of 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, due to a large fan base that loves the team. But they hate Snyder.
It is a common feeling in the upper echelons of leaders. Team president Jason Wright told ESPN in March that the Snyder family “knew the business side was going to get better on the other side of this.” “They are not stupid.”
Gateway revenue, which fell by two-thirds inflation-adjusted since 2008 to $58 million last season, is expected to rise to $127 million by 2031-32, according to a base estimate in the prospectus. In this view, the team’s total revenue, which includes dollars from media rights, would rise from $545 million in 2022 to $959 million in 2032-33 — or $1.05 billion with the new stadium.
The foreword 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 preliminary prospectus estimates that Washington ranked first in league attendance in 2008, following Joe Gibbs’ four seasons in his second stint as the team’s head coach. In 2010, FedEx Field held as many as 84,500 fans, but the team has steadily reduced capacity, trimming it to nearly 58,000 seats last season, the document shows. The flyer describes the current fanbase as “disengaged”. When allegations of a toxic work environment first surfaced in 2020, she says, the team fell to 31st in the league’s attendance standings in 2021 and “has since failed to recover.”
“The team’s passionate fan base, historic loyalty, and strong market mean there is ample room for growth,” the prospectus read.
The prospectus uses Harris’ biography at the 76th to provide you with confidence. Harris estimates spending about $88 million to “help demonstrate the ownership’s commitment to the fan/operator experience” — including new video boards and a locker room upgrade — and says the group assumes $100 million will be needed for “immediate structural repairs” and maintenance for the FedEx field. . Harris also estimates that $43 million will be spent upgrading the registry’s boxes and suites. The document notes that under Harris, 76 players have climbed the NBA ticket standings from No. 27 in 2014-15 to No. 5 in 2021-22.
The prospectus also describes the new stadium naming rights deal as an opportunity for instant cash. According to the document, FedEx has a $7.6 million a year stadium naming rights deal for the Leaders and could cancel the current deal upon a “change of control.” A new naming rights deal would be worth at least $30 million a year for the team, Harris Bulletin estimated, though “it could be much higher given the capital 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 who choose not to do business with us and who choose to do business with us now.”
One of the major selling points of the prospectus is that FedEx Field may not be the team’s forever home. The prospectus estimates that the team will have a new stadium by 2031 – with “possibility of moving to a new stadium at an earlier date” – a departure from the 2027-28 targets that some executive leaders have privately presented for years. (The team’s contract with Prince George’s County expires in 2027.) Although those in league circles and many fans were hopeful for a new venue on the site of Robert F. Kennedy Memorial Stadium, just east of the Capitol Building, Harris’ document predicts that Virginia You will. Offers the best incentives for a new building of up to $1.5 billion. This number is many times more than what was discussed among Virginia politicians in 2022.
By March of last year, both the Virginia House of Representatives and Senate passed the stadium bill. But lawmakers underestimated the public outrage that followed a February congressional roundtable at the US Capitol, where five former female leaders described numerous allegations of sexual misconduct, against former senior executives of the team and Snyder himself. The bill died in the legislature’s caucus committee because its sponsors couldn’t knock votes to send it to the governor.
The prospectus also lists FedEx Field and RFK as possible sites for a new stadium.
A source familiar with the intricacies and dynamics of building a stadium thinks 2031 is overly optimistic, given that the team has no site, no deal and no financing – and believes the Harris Group has no capacity for it. Write a check for a new stadium, like Stan Kroenke did at Most SoFi Stadium in Inglewood, California. For some owners, the completed stadium can take more than a decade to complete. The prospectus reports that the leaders purchased an option to purchase 200 acres of land in Virginia for $100 million.
According to the prospectus, the land at the FedEx Field site is valued at approximately $284 million, while the land for the practice facility is valued at approximately $441 million.
The prospectus also shows that the Chiefs owe $1 billion to the NFL, but the document doesn’t 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 out about $383 million annually to each team through 2033, and sports betting, which could add $10 million to $15 million to annual profits. The prospectus also notes the long-term, “owner-friendly” collective bargaining agreement with the NFL Players Association—sentiment for the league and owners as the association prepares to announce the finalists to replace CEO DeMaurice Smith. He addresses potential concerns about the viability of football by saying: “We believe in the best [sic] The risks around legal settlements of players for player CTE to be very low.”