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Apr 25, 2023

DAN SNYDER, THE WASHINGTON FOOTBALL TEAM, AND BUNGLED M&A DEALS: TRAGIC PARALLELS

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           From a Past Diehard Fan of “The Washington Football Team

             As a passionate past fan of the Washington Commanders (formerly Redskins), few could match my level of devotion to the historic franchise up until around a decade ago. Growing up in Albuquerque, New Mexico, where nearly everyone rooted for the Dallas Cowboys, I stood out as a diehard Washington fan. I idolized the team’s iconic figures, including hall of fame (HOF) coach Joe Gibbs, and players John Riggins (HOF), Art Monk (HOF), Joe Jacoby, Dave Butz, Joe Theismann, Darrell Green (HOF), Dexter Manley, and the unforgettable “Hogs” and “Smurfs”.

Although Washington-Dallas games were epic NFL rivalries back then, I endured brutal hazing from my elementary school friends whenever the Cowboys won. Still, my love for the team never wavered and I remained fiercely loyal, proudly sporting my #44 maroon and yellow John Riggins jersey at every opportunity.

             Like a lot of Washington fans, I was excited when Daniel Snyder bought the team from the Jack Kent Cooke family. Snyder was only 34 at the time, a supposed self-made billionaire marketing wonder boy, and a lifelong fan of the team himself. He paid a record $800 million for the franchise in 1999.

To short circuit things, because of Snyder, I stopped following the team altogether around 12 years ago. I became disillusioned with the organization as did millions of other fans of the once iconic Washington franchise.

             If you follow the NFL, you’re probably familiar with the controversy around Snyder the last 10 years or more, allegations of toxic overall atmosphere, sexual allegations, allegations of micromanagement, and poor team performance. The Washington franchise became irrelevant.

Snyder’s antics began immediately after buying the team, some so ridiculously petty that you won’t know whether to laugh or cry. You can read about many of them here and which you’ll likely find humorous (and mind you, this article came out in 2012 and only scratches the surface).

Snyder’s Impending Sale of the Washington Franchise

             Fast forward to today. Snyder’s effectively been pushed out by the NFL and was likely forced to sell the team. While it’s not final, he’s inked a deal with a group led by multi-billionaire Josh Harris (co-founder of Apollo Global Management and Harris Blitzer Sports & Entertainment) and L.A. Laker icon-turned-business-guru Magic Johnson to sell the team for a whopping $6.05 billion.

Snyder’s transgressions and pathetic overall ownership track record aside (including team performance – 2 playoff wins in 23 years, gulp…), some have written he’ll get the last laugh with the hearty return on investment he’ll make over the $800 million he paid to buy the team in 1999. But let’s be honest, the impending sky-high sale price is a testament to the incredible value of NFL franchises and the league’s booming television revenue.

Snyder’s ROI is hardly the result of any shrewd business maneuvers as team owner, but rather a fortuitous investment in the world’s richest sports business (the NFL). The events of Snyder’s ownership tenure serve as unrivaled lessons in buffoonery.

Comparing Snyder’s Ownership Tenure to Bungled M&A Deals

             Given my ardent support of the Washington franchise in my younger days coupled with my work as an M&A professional for the last 20+ years, I want to use this opportunity to draw some comparisons between Snyder’s controversial ownership tenure and bungled M&A deals. Here we go:

               1.    Failed Due Diligence and Overpayment for Mediocre Assets.

             One common mistake M&A principals make is overpaying for ultimately underwhelming assets as a result of poor due diligence. Similarly, Snyder’s tenure as owner of Washington was repeatedly marked by a lack of due diligence and oversight, leading to countless scandals and legal disputes that hurt the team’s performance and reputation.

One of his biggest due diligence failings was his poor decision-making in player acquisitions. He had a habit of signing high-priced free agents who were obviously past their prime or drafting players without considering overall team strategy. Snyder always put his own interests ahead of the team’s as he was more interested in signing over-the-hill players with big names rather than those who could contribute to overall long-term success.

             For example, Snyder signed defensive tackle and known locker room cancer Albert Haynesworth to a record-breaking seven-year, $100 million contract in 2009, despite known concerns about his character and work ethic. Haynesworth failed to live up to expectations and true to his past form created a toxic atmosphere in the locker room for Washington.

Similarly, Snyder signed quarterback Donovan McNabb to a lucrative contract in 2010, despite McNabb’s poor performance in the previous season with Philadelphia. McNabb was benched midway through his only season with the team.

There were many similar examples, such as an aged and overpriced Bruce Smith, Deion Sanders and most recently quarterback Carson Wentz, who had underperformed and was perceived as a locker room pariah in back-to-back years for Philadelphia and Indianapolis before Snyder paid him $28 million for a one-and-done season with Washington (Wentz was benched by season’s end).

Snyder allegedly “jumped for joy” after signing Wentz. Snyder’s fingerprints were all over these deals when even amateur armchair general managers like me could see they were likely to be colossal money-pit mistakes from the outset.

               2.    Failing to Cohesively Integrate.

             A second mistake M&A principals and executives make is they sometimes fail to cohesively integrate the two companies post-combination, leading to culture clashes, duplication of efforts, and lost opportunities for synergies. Daniel Snyder’s team was Exhibit A, B and C of this failure.

Turnover of players, coaches and executives during Snyder’s ownership tenure was off the charts. This made it extremely difficult to build a cohesive team culture and identity. Since he took ownership of the team in 1999, Washington’s had 9 head coaches and 15 starting quarterbacks. That pretty much sums up Snyder’s “cohesion strategy”.

               3.    Micromanagement and Failure to let Executives do their Jobs.

             A third mistake M&A principals sometimes make post-deal involves (A) micromanagement, and (B) failing to let key executives and staff perform their jobs and make decisions based on their professional training and experience. Snyder was comically and notoriously inept in this regard. There were constantly reports and allegations of Snyder not allowing general managers and coaches to do their jobs during his ownership tenure. Here are just a few examples:

  • Micromanaging Draft Picks. Snyder was known to get involved in the team’s draft picks and reportedly overruled his scouts on multiple occasions. According to former general manager Scot McCloughan, Snyder wanted to select quarterback Robert Griffin III with the second overall pick in the 2012 NFL draft, despite McCloughan’s objections.
  • Interfering with Free Agent Signings. Dovetailing on the above “overpayment for mediocre assets” analysis, Snyder was frequently accused of interfering with free agent signings and pressuring coaches to sign players he wanted, rather than letting the coaches and general managers make decisions based on their many decades of experience of, you know, actually coaching and evaluating football players. For example, it was widely reported Snyder was the driving force behind the team’s signing of defensive tackle Albert Haynesworth, Deion Sanders, Bruce Smith and Carson Wentz, despite known issues around all of them (whether age or otherwise) at the time of their respective signing, and further despite objections from the coaching staff.
  • Telling Coaches the X’s and O’s of Football. Snyder was also notorious for this. Notably, one such example occurred during the 1999 season when Snyder was displeased with defensive coordinator Mike Nolan’s defensive schemes, which Snyder deemed “too vanilla.” Snyder allegedly left a melting gallon of (non-vanilla) 31 flavors ice cream on Nolan’s desk with a note saying, “This is how I would like your play-calling to be like.” Nolan apparently responded with a thank you note saying that his kids enjoyed the ice-cream. Later the same season following a loss to Dallas, Snyder left five gallons of ice cream to melt in Nolan’s office.
  • Constantly Firing Coaches. Snyder has a reputation for firing coaches abruptly and without warning. In 2001, he fired head coach Marty Schottenheimer after just one season, despite the team finishing with an 8-8 record. Similarly, in 2019, he fired head coach Jay Gruden after just five games into the season, even though Gruden had led the team to a division title just two years earlier. As mentioned above, the team had 9 head coaches over the course of Snyder’s 23-year tenure as owner.
               4.   Failing to Communicate Effectively.

             A fourth mistake M&A principals sometimes make is failing to properly communicate with employees or stakeholders, leading to confusion, uncertainty, and mistrust. Similarly, Snyder’s ownership tenure was marked by a lack of transparency and communication, particularly in the wake of allegations of sexual harassment and workplace misconduct within the organization.

There was also of course the controversy around the team’s name and branding (the team did change its mascot name from Redskins to Commanders in 2020 after many years of criticism and pressure). These events led to backlash from fans, sponsors, and the broader public, as well as legal challenges and negative publicity.

               5.   Toxic Workplace Culture.

             A fifth mistake M&A principals sometimes make is permitting a toxic post-combination work environment, although to be clear, by no means am I suggesting such instances rise to the level of toxicity of the environment allegedly tolerated and/or potentially perpetuated by Snyder. The Washington franchise was rocked by numerous scandals over the years concerning allegations of toxic workplace culture.

In July 2020, The Washington Post published an article detailing allegations of sexual harassment and misconduct within the organization. The allegations were made by 15 former female employees and two reporters who covered the team. The report also alleged that the team failed to act after complaints were made.

The team hired a law firm to investigate the allegations, which resulted in the firing of several employees, including the team’s radio announcer and director of pro personnel. The NFL fined Snyder $10 million for workplace culture issues, but he was not required to sell the team after those initial findings.

Conclusion

             In conclusion, Daniel Snyder’s tumultuous tenure as owner of the Washington franchise serves as a cautionary tale for M&A professionals and business leaders alike. His failures in due diligence, integration, communication, and management, coupled with fostering a toxic workplace culture, demonstrate the importance of sound leadership and decision-making in any organization and business transaction.

Although Snyder may walk away with a significant financial ROI from the sale of the team, his legacy will forever be tainted by his missteps and the damage he inflicted on a once-iconic franchise. As the organization transitions to new ownership, fans and stakeholders alike can only hope that the lessons learned from Snyder’s era will pave the way for a brighter future for the team, its employees, and its devoted followers, past and present.

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