Washington Football Team Owner Daniel Snyder is unlawfully blocking his minority shareholders’ attempts to sell their combined 40.5% interest in the team, the partners are alleging in federal court. A Maryland federal judge last week partially unsealed the complaint filed Nov. 13 by partners Dwight Schar, Robert Rothman and Frederick Smith, upon the demands of the Washington Post. The heavily redacted complaint shines more light on the dispute, but keeps most specific details out of the public eye. Essentially, the three men say Snyder is using his right of first refusal on club stock sales in a manner not permitted by their original ownership contract. In part, they claim Snyder’s offer is less valuable than their pending external offer, which the Washington Post and the N.Y. Times have described as $900M for their combined 40% stake. Snyder’s offer is not “at a purchase price equal to (and on other terms substantially comparable to)" their first offer, the complaint reads. Additionally, Snyder is frustrating the deal by offering to buy only Rothman and Smith’s combined 25% stake, excluding Schar’s 15% stake, according to the Post. That would effectively kill the deal. The Post has reported that Clearlake Capital co-Founders Behdad Eghbali and José Feliciano, and Feliciano’s wife, Kwanza Jones, are the potential buyers. The details of the Eghbali-Feliciano offer can remain private, the judge ruled.
WILL CASE BE HEARD AT ALL? A separate question may ultimately trump factual dispute: Whether the court will hear the case at all. The case is already under NFL-directed arbitration, and as a general matter, NFL owners agree to have their disputes heard in that manner when they buy into a club. In their suit, Schar, Rothman and Smith argue their agreement also permits litigation. The NFL has intervened in the case, but its specific argument remains under seal. The unsealed documents also confirm that the three men first retained consultants to sell their stakes in August ‘19.
