The situation surrounding Dan Snyder‘s potential sale of the Commanders seemed nearly over as reports appeared to be pointing towards a sale to the Josh Harris-led group last month. As a result of the NFL finance committee’s review of the potential sale, questions have been raised about the integrity of the deal, according to Daniel Kaplan of The Athletic. The main concerns lie on two fronts: 1) the number of limited investors involved in the deal and 2) the amount and source of the debt involved in the deal. 
The NFL currently has a set cap for how many limited partners may be involved in an ownership group, currently set at 25. The Harris group contains approximately 17 limited partners. While that group is under the league’s cap, each investor requires extensive vetting and, with some investors located internationally, the vetting process becomes that much more cumbersome.
As for the debt involved, “buyers of teams can borrow up to $1.1 billion secured against the franchise,” something Harris proposes he will do. The problem stems from the fact that he also intends to borrow more with debts secured against the other sports teams in which he holds stake, the Philadelphia 76ers, New Jersey Devils, and Crystal Palace FC of the English Premier League.
Similar deals have been made in the NFL with limited partners. Snyder’s original purchase of the team included this method of sourcing debt. The issue lies in the fact that it is the controlling partner, Harris, who is borrowing against his own businesses. If a limited partner defaults on his loans, it wouldn’t affect the controlling party, but the committee has concerns about the possibility of Harris defaulting on his debts as the controlling partner.
It’s not the opinion of the public that the deal will be rejected over these issues, according to Mark Maske and Nicki Jhabvala of The Washington Post, but the additional hurdles may push the timeline of the deal, making it “increasingly unlikely the owners can vote to approve the transaction, even on a conditional basis, during their May 22-23 meeting in Minneapolis.” Some solutions that have been proposed are the result of the deal’s extenuating circumstances. For instance, a suggestion that Snyder himself may extend a loan to the Harris group in hopes of getting the deal over the finish line. The loan would be approximately $200MM.
Another thought was that the league may conditionally approve a rise in the allowance of debt. Due to the recent skyrocket of franchise prices (Panthers for $2.28 billion in 2018, Broncos for $4.65 billion in 2022), the NFL figured that it would become increasingly difficult for buyers to acquire teams under the current debt rules. There are still some potential bidders who may be able to go through with the purchase under the current rules, but with rising prices, that only makes an already extremely selective process that much more difficult.
There’s still optimism the deal with get approval, in due time. A source close to Harris aptly said, “It’s dragging through the NFL because they’ve never had to evaluate this type of bid. The NFL’s choice is getting Dan out (by) working through Josh’s complexity. I think they’ll find a way, but no guarantees.”
The next to last paragraph brings up the salient point: with the increasing cost of acquisition, how can prospective owners stay under the current threshold? 1.1 of 2.28 is just slightly under 50%, where as 1.1 of 6.05 is roughly 18%. Very few people can carry that debt when those figures are in the billions. And the cost will clearly only continue to rise.
To me it seems quite ironic that the NFL is concerned about this potential owners debt but are gung-ho about expanding to foreign markets, which will undoubtedly prove to be a financial black hole for the league.
I think the real hold-up is the fact that Goodell wants Bezos to own this team and thus will be looking to disqualify anybody else whose bid isn’t squeaky clean.
This is why Brian Davis or Jeff Bezos should be seriously considered by the NFL…they (apparently) have the capital to make the deal happen but aren’t in the inner circle.
Brother, can you spare a dime?
Would you accept Dogecoin?