AP Photo/Patrick Semansky, File
The Josh Harris-led group’s deal to purchase the Washington Commanders for $6.05 billion involves an “earnout” provision for current owner Daniel Snyder.
Mark Maske and Nicki Jhabvala of the Washington Post explained that the earnout is “a structure that would provide Snyder with a deferred payment of an amount contingent on the franchise reaching specified financial benchmarks, according to five people with knowledge of the terms of the sale.”
They added more context to the deal, harkening back to their earlier report on the NFL finance committee’s concerns about the complexity of the pact.
“The earnout represents a relatively small but perhaps meaningful portion of the overall sale price,” they wrote. “Its inclusion in the deal explains, in part, why people familiar with the deliberations of the NFL finance committee last week described the sale agreement between Harris and Snyder as unusually complex.
As Mike Florio of Pro Football Talk noted, this report “dovetails” with one produced by ESPN’s Seth Wickersham and John Keim, who obtained a copy of the Harris Blitzer Sports & Entertainment prospectus.
That prospectus included the belief that the removal of Snyder, who is the subject of multiple investigations and has presided over a largely losing Commanders team since he bought the franchise in 1999, would “boost attendance, ticket sales and sponsorship revenue, as well as the team’s prospects for a new stadium,” per the ESPN report.
That prospectus also expressed optimism at securing public funding for $1.5 billion from the state of Virginia for a new football stadium.
The earnout payments would presumably go to Snyder if the Harris-led team hit financial benchmarks in a potentially more prosperous financial era for the Commanders.
Harris, who is also the managing partner of the Philadelphia 76ers and New Jersey Devils, announced an agreement to buy the team from Snyder last Friday. However, at least 24 of the NFL’s 32 owners must approve the sale before it becomes official.
Harris has numerous limited partners with him on the deal, including Danaher Corporation co-founder Mitchell Rales and NBA legend Magic Johnson, who is also part of the Los Angeles Dodgers ownership group.