Congress accuses Commanders of stealing season ticket deposits, hiding revenue from NFL in letter to FTC
The Washington Commanders may somehow be in even deeper trouble than they were before.
In a letter to the Federal Trade Commission, which was obtained by the Washington Post, the House Committee on Oversight and Reform accused Commanders executives and team owner Daniel Snyder of hiding revenue from the NFL for over a decade by withholding security deposits that should have been refunded to season ticket-holders.
“We are writing to share evidence of concerning business practices by the Washington Commanders uncovered during the Committee’s ongoing investigation into workplace misconduct at the team,” the letter says. “Evidence obtained by the Committee, including emails, documents, and statements from former employees, indicate senior executives and the team’s owner, Daniel Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of financial conduct that victimized thousands of team fans and the National Football League [NFL].”
A large portion of this evidence comes from Jason Friedman, the Commanders' former vice president of sales and customer service, who testified in front of the committee in March. The letter says that Friedman, who worked for the Commanders for 24 years, also turned over numerous spreadsheets and other documents relating to the alleged unlawful financial activities.
In the letter, the committee asks the FTC, which has the authority to investigate unfair or deceptive business practices, to examine the evidence it provided to determine if the Commanders have broken the law.
The NFL responded to the letter later Tuesday:
From @NFLprguy on the latest #Commanders allegations:
“We continue to cooperate with the Oversight Committee and have provided more than 210,000 pages of documents. The NFL has engaged former SEC chair Mary Jo White to review the serious matters raised by the committee.”— Tom Pelissero (@TomPelissero) April 12, 2022
The alleged financial misconduct
According to the letter, Friedman's interview and the documents he submitted shed light on a potentially unlawful practice the Commanders had allegedly been engaging in for at least a decade.
Mr. Friedman provided the Committee with information and documents indicating that the Commanders routinely withheld security deposits that should have been returned to customers who had purchased multi-year season tickets for specific seats, referred to as seat leases.
The security deposit for the seat leases was 25 percent of the full cost of the seats for one year. Friedman told the committee that the security deposits were supposed to be refunded when the multi-year seat contract ended. But in 2012, the end of a 15-year waiver that capped how much money teams were required to share from club-seating revenue, team executives allegedly "directed employees to establish roadblocks to prevent customers from obtaining the security deposits that were due — effectively allowing the team to retain that money."
Revenue gained from that practice was allegedly referred to as "juice." The Commanders allegedly misclassified that "juice" intentionally, so it would look like it came from non-NFL events held at FedEx Field (such as college football games or concerts) and could therefore be hidden from the NFL and not included in the NFL's pool of shared money. Friedman said that the Commanders were able to hide these activities by keeping two sets of books.
In the letter, the committee said that after examining Friedman's testimony and the documents he submitted, it believes the Commanders improperly withheld refunds from around 2,000 season ticket accounts, allegedly allowing the team to pocket approximately $5 million that should have gone into the NFL's revenue-sharing pool.
Commanders deny everything
The accusations of financial impropriety first came to light a few weeks ago, and not long after it was reported that Friedman had testified in front the House Committee on Oversight and Reform about the Commanders allegedly withholding ticket revenue. On April 4, the Commanders released a statement denying everything.
"There has been absolutely no withholding of ticket revenue at any time by the Commanders," the statement read. "Those revenues are subject to independent audits by multiple parties. Anyone who offered testimony suggesting a withholding of revenue has committed perjury, plain and simple."
The Commanders have yet to release a new statement, and the NFL has not commented on the newly detailed accusations.
While the public found out about these accusations just over a week ago, the NFL may have learned about these alleged financial crimes almost two years ago. Rachel Engleson, the team’s former director of marketing and client relations, told the committee that she revealed her suspicions about the team's ticket practice to Beth Wilkinson, the attorney that had been investigating accusations of sexual misconduct, a hostile work environment, and gender discrimination against the Commanders. Wilkinson's investigation took place in 2020.
At the time, the NFL did not ask Wilkinson to submit a written report of the investigation once it was completed, preventing a full and public accounting of what she learned. Congress later began investigating why there was no written report and asked Snyder and the NFL to turn over all documents and communications relating to the investigation.
Both parties refused to turn over those documents, which likely led the House Committee on Oversight and Reform to dig deeper into the Commanders' affairs and open a separate investigation, resulting in Friedman's testimony and Tuesday's letter to the FTC.
