Today, Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, and Rep. Raja Krishnamoorthi, Chairman of the Subcommittee on Economic and Consumer Policy, sent a letter to the Federal Trade Commission (FTC) sharing information uncovered by the Committee that indicates senior Washington Commanders’ executives, including team owner Dan Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of financial conduct that may have victimized thousands of team fans and the National Football League (NFL). According to information obtained by the Committee, including emails, documents, and statements from former employees, the Commanders may have intentionally withheld millions of dollars in refundable deposits owed to fans, and concealed revenues that were owed to the NFL as part of the League’s revenue-sharing agreement.
“This new information on potential financial misconduct suggests that the rot under Dan Snyder’s leadership is much deeper than imagined. It further reinforces the concern that this organization has been allowed to operate with impunity for far too long,” said Chairwoman Carolyn Maloney. “This new information suggests that in addition to fostering a hostile workplace culture, Mr. Snyder also may have cheated the team’s fans and the NFL. While the focus of our investigation remains the Commanders’ toxic work environment, I hope the FTC will review this troubling financial conduct and determine whether further action is necessary. We must have accountability.”
“The fact that the Committee, while investigating evidence of sexual harassment and workplace misconduct, also uncovered evidence of what appears to be a scheme to cheat fans and the NFL tells you all you need to know about Dan Snyder and how he is running this organization,” said Chairman Krishnamoorthi. “The question is what other potential wrongdoings are the Commanders engaging in, and what is the extent of the dysfunction atop their leadership? The Committee will continue to push for transparency and accountability from the team and the League to protect all employees in the workplace, and I urge the FTC to investigate the evidence provided by the Committee of the Commanders’ long-running financial schemes.”
On March 14, 2022, as part of the Committee’s ongoing investigation into the Commanders decades-long hostile workplace culture and the NFL’s handling of the internal investigation of this matter, the Committee conducted a transcribed interview with former Commanders sales executive Jason Friedman. Mr. Friedman, a 24-year veteran of the organization who was repeatedly promoted by Mr. Snyder and was one of Mr. Snyder’s longest serving employees, oversaw sales and customer experience for all seating at FedEx Field and held the position of Vice President of Sales and Customer Service at the time of his separation from the team in October 2020.
During his interview, Mr. Friedman described a pattern of deeply concerning business practices that were directed by senior leadership, including Mr. Snyder. The Committee also obtained information and documents supporting his claims.
According to Mr. Friedman, in 1997, under previous ownership, the team began requiring fans to enter into multi-year leases for certain premium seating which could only be secured with a one-time refundable deposit of 25% of the price of the seats for one year. Mr. Friedman explained that after Mr. Snyder acquired the team, he continued this practice for all premium seating until 2000 when the policy was changed, and deposits were only required for private skyboxes. Internal documents obtained by the Committee reveal that at least some of these lease agreements required that security deposits be returned within 30 days of the agreement ending. However, Mr. Friedman stated that under Mr. Snyder’s leadership, team executives instructed Mr. Friedman to withhold the security deposits from customers at the end of their lease terms and to create artificial barriers to discourage customers from requesting the return of their deposits.
According to Mr. Friedman, the Commanders also improperly converted unclaimed security deposits into revenue to be used for other purposes. This revenue was referred to as “juice” by some Commanders executives.
Mr. Friedman understood the team’s practice of converting unclaimed security deposits into “juice” would occur when team executives believed the Commanders “were a little bit behind on our sales numbers.” During his transcribed interview, Mr. Friedman explained that Mr. Snyder and Mitch Gershman, Mr. Friedman’s former supervisor and then-Chief Operating Officer for the Commanders, would specifically instruct him to:
“Go identify security deposits that are on dormant accounts where, in my estimation, the likelihood of the customer coming forward and asking for their deposit back is as close to zero as possible, and then return the security deposit in the system and convert the credit that would then be on the customer’s account into juice.
“The money would then be allocated to a similar license fee, handling fee, interest fee. It would get converted into something where, A, we didn't have to share it with the league, and B, there was no outstanding obligation related to it. Meaning we didn't have to issue out a ticket to a customer related to that line item.”
Mr. Friedman provided evidence that the Commanders tracked and stored information related to customers’ security deposits in an electronic ticketing and accounting database. Based on Mr. Friedman’s interview and information that was exported from that electronic database and reviewed by the Committee, it appears that Mr. Friedman has identified approximately 2,000 customers who paid refundable deposits totaling $5 million and whose money was not returned as of 2016.
Mr. Friedman also provided information and documents indicating that Commanders executives repeatedly concealed ticket sales revenue that should have been shared with the NFL by underreporting the revenue. To accomplish this, Commanders executives falsely processed or misassigned a portion of the ticket revenue from Commanders games as fees related to special events, such as concerts or college football games, which did not have to be shared with the League. According to Mr. Friedman, the Commanders avoided detection of these practices by failing to include in their ticket manifests the actual prices charged for tickets. The unreported revenue that was collected by the Commanders, or “juice,” would then be assigned as non-sharable revenue in its accounting systems and concealed from the NFL.
As part of this scheme, the Commanders reportedly maintained two sets of books: one that was shared with the NFL but underreported certain ticket revenue, and another internal set of books that included the complete and accurate revenue and was, according to Mr. Friedman, “shown to Mr. Snyder.” This practice appears to be reflected in two emails between team executives and Mr. Friedman—one from April 1, 2013 and another from May 6, 2014—that Mr. Friedman provided to the Committee.
Another former team employee, Rachel Engleson, confirmed to the Committee that “it was known and/or rumored in the office that there was ‘moving around’ of money regarding tickets,” and stated that she had informed an investigator hired by the NFL about this issue during an interview in 2020.
Although the Committee’s focus remains the ongoing investigation into the Commanders’ hostile workplace culture, it is sharing this troubling new information and documents with FTC to determine whether additional investigation is warranted and, if so, take appropriate measures to ensure that the thousands of potential victims of this conduct receive any compensation they are due.
Click here to read the letter to the Federal Trade Commission.
Click here to read the April 1, 2013, email provided by Mr. Friedman.
Click here to read the May 6, 2014, email provided by Mr. Friedman.
Original source can be found here.
