According to that person, there are “small holes” in Harris’s unsigned, nonexclusive deal with Commanders owner Daniel Snyder that Harris and his investment group can address relatively easily. The terms of that agreement were submitted to the NFL for a preliminary review that is not part of the league’s formal sale ratification process, which requires the approval of at least 24 of the 32 team owners.
Harris’s purchase of the Commanders almost certainly will be ratified, the person said, if the deal is properly modified and the issues related to indemnification and the NFL’s second investigation of Snyder and the team can be resolved to the other owners’ satisfaction.
“The league is doing their work,” that person said. “That’s normal. They’re small holes [in Harris’s deal]. They’ll get that part done. … It won’t be a problem. The issue is those other things.”
The NFL, Harris’s group and the Commanders declined to comment Tuesday.
Terms of Josh Harris’s Commanders deal sent to NFL for informal review
The $6.05 billion sale price would set a record for an NFL franchise. The current mark is the $4.65 billion that a group led by Walmart heir Rob Walton paid last year to purchase the Denver Broncos from the Pat Bowlen Trust. Harris had made a bid to buy the Broncos.
Harris is the owner of the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils. He also is a limited partner in the NFL’s Pittsburgh Steelers and would have to sell that stake to purchase the Commanders. Harris’s investment group includes Potomac, Md., businessman and philanthropist Mitchell Rales and NBA great Magic Johnson.
Josh Harris group has tentative deal to buy Commanders from Daniel Snyder
NFL rules require the lead investor of an ownership group to have at least a 30 percent equity stake in the purchase. No ownership group can exceed 25 people, and the group can’t borrow more than $1.1 billion to buy the team. No private equity firms, public corporations or sovereign wealth funds can own any shares.
According to the person with knowledge of the NFL’s inner workings, the Harris group’s preliminary deal does not account for a small portion of the funding, potentially putting the bid slightly above the debt limit. But the person noted that the deal is not finalized or signed and said: “They can clean that up. I don’t think he’s been asked to do it yet.”
Given that Harris’s deal with Snyder is not exclusive, it does not prohibit other bidders from attempting to buy the team. At least one rival bidder, Canadian real estate developer and private equity executive Steve Apostolopoulos, remains active in the bidding, a person with knowledge of the sale process said in recent days.
The NFL’s latest investigation of Snyder and the Commanders is being conducted by attorney Mary Jo White. Snyder has declined to be interviewed by White, three people with direct knowledge of the league’s inner workings said last month. White was expected to make at least one more attempt before completing her investigation, according to one of those people. NFL Commissioner Roger Goodell has said the league will release White’s findings publicly, even if Snyder sells the team.
It is not known to what extent the Harris group is willing to indemnify Snyder against legal liability and costs as part of the tentative purchase agreement. Since late February, multiple people with direct knowledge of the league’s inner workings have said Snyder was seeking indemnification from a buyer or from the league and the other owners. The Commanders said in February that such depictions were inaccurate.
For the sale to be completed and ratified, the other owners will want Snyder to drop any effort to be indemnified by them, and further to indemnify the league and the other owners against future legal liability and costs, the person with knowledge of the NFL’s inner workings and the owners’ views said Tuesday.
The issues related to indemnification and White’s investigation make the prospective timeline for the approval of the sale uncertain, that person said. The owners’ next meeting is scheduled for May 22-24 in Minneapolis. They aren’t scheduled to meet after that until October, although Goodell could schedule a special meeting around August to address the issue. The owners approved the Broncos sale in a special meeting last August.