The bombshell allegation that the Washington Commanders withheld ticket revenue from visiting teams invites a crucial question: Could this allegation, which follows others, be the one that leads to Daniel Snyder’s removal as owner?
Don’t bet on it.
But do bet on more questions for a franchise that has repeatedly found itself the target of investigations and league discipline.
The House Oversight and Reform Committee is investigating the Commanders for workplace misconduct and a toxic environment for women, and the ticket-revenue allegation arose during the recent testimony of former VP of sales and customer service Jason Friedman, as reported by Front Office Sports.
The Commanders categorically deny Friedman’s charge. They stress the team and league engage in audits and retain accounting firms. ESPN supplied details on the auditing process, including that “it’s common” for teams to pay more post-audit. That point suggests the Commanders, which ESPN reports had to pay an additional $86,000 in 2019, might not have committed a grave sin.
The Commanders’ statement further opined that “anyone” offering testimony about intentional withholding “committed perjury.” Friedman’s attorney, Lisa Banks, responded by saying the team had “defamed” her client. Banks added that Friedman is unable to speak freely due to “contractual constraints,” a phrase likely referring to non-disparagement language in Friedman’s employment contract or severance agreement. Team attorney Joseph Tacopina emphasized the Commanders didn’t name Friedman and warned that if Friedman sues, “the Commanders will gladly accept service and vigorously defend any such claim.”
A viable defamation claim wouldn’t require the statement naming Friedman. Defamation centers on whether a false statement that causes reputational harm is about the plaintiff. If a jury concluded that a statement omitting a person’s name is nonetheless about that person, it could hold the defendant liable. Friedman would have a logical argument that the team was referring to him since he’s the only known source.
Meanwhile, a spokesperson for Republican committee members downplayed Friedman’s contentions as “one-sided, unconfirmed, unsupported allegations from a disgruntled ex-employee with an ax to grind.” The statement implies that if Republicans retake the House in the midterm elections this November, the Commanders investigation might be sidelined.
If the Commanders intentionally—as opposed to carelessly or recklessly—withheld revenue, the team and Snyder could face ramifications from both the NFL and the law.
Tickets and revenue sharing are central to the NFL’s story. After he became commissioner in 1960, Pete Rozelle convinced owners that franchise values would rise or fall together. The NFL, Rozelle stressed, would only succeed if every team enjoyed a legitimate chance to compete. To ensure that chance, owners agreed to pool categories of revenue and equally distribute it.
The words “ticket” or “tickets” also appear 99 times in the league constitution, the key contract between the league, team and owners. The constitution methodically designs duties related to tickets and accompanying revenue.
For instance, under Article IX “Prohibited Conduct,” team employees are barred from “issuing a free ticket of admission to a game to any visiting club or player thereof except pursuant to the constitution.” The constitution also commands home teams to “deliver to the league office” 40% of the gross receipts of each regular season and preseason game. Prior to deliverance, teams are instructed to deduct federal, state and municipal taxes as well as a “stadium rental allowance equal to 5% of gross receipts.” These receipts are deposited in the NFL’s treasury and later redistributed. Further clarifying obligations, any income in excess of stated ticket prices for seats (other than luxury box suites, revenue for which isn’t shared) must be included in gross receipts.
Even though Commanders officials are employed by their team—not the NFL—the constitution obligates teams to draft employment contracts with clauses expressing employees accept the constitution and recognize the commissioner’s decisions are “final, conclusive and unappealable.” Employees must also “agree to release the commissioner and to waive every [legal] claim” they might otherwise have against the league, commissioner or team.
Goodell could punish the Commanders through fines, suspensions—including of Snyder—and stripping draft picks. Other owners would need to accept Goodell’s resolution: they contractually assent to not suing over matters governed by the constitution. However, owners have occasionally taken the law into their own hands. In the 1990s, Dallas Cowboys owner Jerry Jones and NFL Properties (the league’s IP entity) sued each other over the Cowboys signing licensing and sponsorship contracts with companies that competed with NFL Properties-licensed companies. The dispute ended in a settlement.
Removing Snyder as owner would require a more arduous process. The constitution requires a vote in which 75% of the 31 other ownership groups oust the party in question, which would lead to a franchise sale.
Snyder’s standing with the NFL is unsteady. It might be at its nadir. In addition to the ticket controversy, former SEC chairperson Mary Jo White is investigating allegations that Snyder engaged in sexually inappropriate conduct. The House is separately reviewing those allegations, which were among concerns alluded to last week by the attorneys general of six states regarding NFL workplace harassment.
Further clouding Snyder’s relationship with the league, any litigation with Friedman would attract national headlines and potentially bring about public revelations of sensitive emails, texts and financial records. The league could even attempt to intervene in such litigation, as it successfully did in Snyder’s case with the team’s former limited partners.
There’s no indication that Snyder, 57, would willingly sell the team. Forcing him out would be unprecedented; no majority owner has been forced to sell their team in the league’s 102-year history. Also, as explained previously in Sportico, Snyder possesses the financial wherewithal to challenge the legality of his removal. Although the league constitution says that removal would be final, that language has never been tested with an expelled owner. Snyder could insist the league failed to follow its own procedures since similarly misbehaving owners haven’t been tossed.