The Washington Commanders have settled a consumer protection lawsuit in the District of Columbia over claims that the NFL team improperly withheld ticket deposits from fans. However, billionaire owner Dan Snyder and his team continue to face other civil lawsuits in DC over what the attorney general’s office called collusion to deceive residents about the team’s toxic workplace culture.
Attorney general Brian L. Schwalb on Monday announced the agreement that returns $200,000 to fans and pays $425,000 to the district to resolve allegations related to the deposits. Predecessor Karl A. Racine filed the consumer protection lawsuit late last year before leaving office, and Schwalb picked up the case.
The district’s investigation showed the team deceptively kept fans’ deposits for years after ticket contracts expired, improperly used that money and in some cases made it difficult to reclaim the money.
‘Rather than being transparent and upfront in their ticket sale practices, the Commanders unlawfully took advantage of their fan base, holding on to security deposits instead of returning them,’ Schwalb said in a statement. ‘Under this settlement agreement, our office will maintain strict oversight over the Commanders to ensure all necessary steps are taken to reimburse fans for the refunds they are entitled to.’
The district still has a civil suit ongoing against the Commanders, Snyder, the NFL and Commissioner Roger Goodell over outstanding sexual harassment and hostile workplace claims. A league investigation into the team yielded a $10 million fine but no written report, which prompted outrage and a congressional review.
Commanders owner Dan Snyder and wife Tanya have face several recent lawsuits
At least one fan is looking forward to Snyder’s departure as Commanders owner
The Commanders previously settled with Maryland on season-ticket holder deposits by agreeing to return money and pay the state $250,000.
Under the terms of the latest settlement with the district, the Commanders must conduct a public records search for contact information for affected fans and attempt to notify them, disclose the refund process on their website and provide the attorney general’s office with regular reports documenting their progress.
‘We have not accepted security deposits or seat licenses in more than a decade and have been actively working to return any remaining deposits since 2014,’ a Commanders spokesperson said in an email to The Associated Press. ‘We are pleased to have reached an agreement on the matter with the DC attorney general and will work with the office to fulfill our obligations to our fans.’
The series of lawsuits in the Washington area were among the latest turns in the team’s tumultuous run under Snyder, who along with wife Tanya hired a firm in November to explore selling part or all of the team. That came amid multiple investigations and two weeks after Indianapolis Colts owner Jim Irsay said there was ‘merit to remove’ Snyder.
Two groups, one led by Josh Harris and Mitchell Rales that includes Magic Johnson and another by Canadian billionaire Steve Apostolopoulos, have submitted fully financed bids to buy the Commanders. It’s unclear how soon a sale could happen; Snyder must first choose his preferred bidder and send to the league for approval.
Last fall, with multiple investigations ongoing into the team’s workplace culture, finances and Snyder himself, he and wife Tanya hired a firm to ‘consider possible transactions.’ Tanya continues to represent the team at league events amid sexual harassment and business malpractice investigations against the team and her husband.
The district’s investigation showed the team deceptively kept fans’ deposits for years
Snyder and his attorneys have demanded that NFL owners and the league indemnify him against future legal liability and costs if he sells the team, a person told the AP. Two owners said they were angered by Snyder’s demand for indemnification but told the AP that they want to let the sale process play out before taking any action.
The 58-year-old billionaire has faced fans’ calls to sell the struggling team for years, but pressure has been mounting since 2020 amid accusations of sexual harassment, financial impropriety, and obstruction against the team and Snyder himself. While the Commanders have fired many of the individuals accused of sexual harassment and paid a $10 million fine to the NFL, Snyder has defiantly denied accusations against him in the face of several investigations, including a congressional probe.
Following The Washington Post’s recent report that Snyder is seeking to be indemnified were he to sell the team, ESPN reported in March that FBI and IRS agents are investigating claims that Snyder took out a $55 million loan without the knowledge of his then-minority partners.
After years of disputes, Snyder bought out minority owners Dwight Schar, a home construction executive, Black Diamond Capital CEO Bob Rothman, and FedEx founder Fred Smith in the spring of 2021. The trio had previously filed an injunction in hopes of being allowed to sell their 40.5-percent stake of the team, which Snyder ultimately purchased after the NFL approved a debt-limit waiver, allowing him to take out a $450 million loan from Bank of America.
A federal grand jury has since issued subpoenas related to team finances, according to ESPN.
Then-DC Attorney General Karl Racine (left) announced the lawsuit in November
The former minority partners reportedly demanded an NFL investigation into the alleged $55 million loan during a confidential arbitration hearing, but at least one source with knowledge of the proceedings told ESPN that Schar, Smith and Rothman believed league commissioner Roger Goodell and general counsel Jeffrey Pash sided with Snyder.
If Snyder did take out the $55 million loan without informing his now-former minority partners, it would have violated the team’s shareholder agreement, according to documents obtained by the AP.
Bank of America officials repeatedly requested proof that the board had approved the loan, only to close on the deal without receiving any such confirmation. Documents obtained by the AP show one team lawyer acknowledging in a letter that the board approval was never granted.
A Bank of America spokesman declined to comment to DailyMail.com.
Less than a week after Schar, Rothman and Smith pushed NFL arbitrators to investigate the loan, the NFL moved to end the arbitration proceedings, documents show.
Frustrated, Schar, Rothman and Smith hesitantly agreed allow Goodell to mediate the dispute, according to ESPN.
The NFL did not conduct any investigation into the loan, and Snyder has never been penalized over the financial misconduct claims.
The Snyders are exploring the possibility of selling the team, to the pleasure of many fans
In a statement, NFL spokesman Brian McCarthy said: ‘The parties had a series of disputes, which were certified to the Commissioner for arbitration as required by league rules. The Commissioner appointed a highly-respected attorney as the arbitrator and none of the parties objected to that appointment.’
‘After several months, the parties were asked if they would be interested in participating in a confidential mediation with the Commissioner, which they agreed to do,’ McCarthy continued.
‘The mediation lasted for two days and the parties subsequently reached an agreement whereby the three limited partners sold all of their interests in the team to Mr. Snyder at an agreed-upon price and other terms. Everyone was represented by very sophisticated legal and financial advisors. The agreement included full releases of all claims that were or could have been asserted by any party in the arbitration proceeding.’
Commanders attorney John Brownlee did not respond to ESPN questions about the alleged $55 million loan, but did say the team is cooperating with the DOJ’s request for financial records in the lawsuit settled Monday.