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As local and federal investigations into the Washington Commanders’ alleged financial improprieties and workplace misconduct continue, team owners Daniel and Tanya Snyder moved closer on Thursday to selling the once-proud NFL franchise.
The Snyder family reached a preliminary agreement to sell the Commanders to an ownership group led by Philadelphia 76ers co-owner Josh Harris for approximately $6 billion, multiple outlets reported. If consummated, the deal will be the largest purchase ever of a North American professional sports franchise. News of the tentative sale was first reported by Sportico.
The deal also has vast sports betting implications. Harris, a co-founder of private equity giant Apollo Global Management, also co-founded Harris Blitzer Sports Entertainment, which owns the NHL’s New Jersey Devils, Crystal Palace of the English Premier League, and the Sixers. In October 2011, Fanatics CEO Michael Rubin became a minority owner of the Sixers as part of the ownership group led by Harris and David Blitzer.
Rubin owned a stake in the Sixers and the Devils for more than a decade, until he divested his interest in the two teams last June. The entrepreneur sold the stake ahead of the launch of Fanatics Sportsbook to satisfy league rules that restrict individuals from owning a team while running a gambling operation.
Philadelphia businessman David Adelman purchased a considerable portion of Rubin’s stake, and the remainder went to Harris, Blitzer, and other limited partners of HBSE, Sportico reported.
Upon the sale, Rubin penned a letter to Sixers fans describing Fanatics’ ascent. When Rubin joined the Sixers’ ownership, Fanatics maintained a small office in King of Prussia, a Philadelphia suburb, where it only sold licensed sports products online. Since then, it has transformed into a $31 billion multinational company, with 10,000 employees in over 50 countries. Rubin closed by expressing confidence that Harris could bring an NBA title to Philadelphia for the first time in more than 40 years.
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Breaking: Dan Snyder has reached an agreement in principle to sell the Commanders for $6 billion to a group led by Sixers and Devils co-owner Josh Harris, per @Sportico pic.twitter.com/hzkqPIkd9r
— Sports Illustrated (@SInow) April 13, 2023
When Fanatics made its retail sports betting debut in January, the company chose FedEx Field as the site for its first sportsbook. Located five miles east of Washington, D.C., the Maryland venue has been the Commanders’ home stadium since 1997. Harris’ close business ties with Rubin in the past opens the possibility for further commercial ventures between Fanatics and the Commanders if the bid by Harris’ group is eventually approved.
Harris’ ownership group also includes three-time NBA MVP Magic Johnson and businessman Mitchell Rales, co-founder of the Danaher Corporation. Johnson is also a minority owner of MLB’s Los Angeles Dodgers.
Jeffrey Kamys, chief investment strategist for the Inherent Wealth Fund’s iBET Sports Betting & Gaming ETF, believes there could be widespread advertising opportunities for Fanatics with the Commanders, especially on the local level. The possibility exists for Fanatics to gain exposure through the sponsorship of Commanders pre-game shows as well as mid-week coaches’ shows leading to gameday.
“The Fanatics Sportsbook at FedEx Field in Maryland is the company’s first entry into the legal sports betting market,” Kamys told Sports Handle. “With the past relationship of Rubin [and] Harris, Fanatics Sportsbook should see a massive exposure boost if the Josh Harris-Magic Johnson ownership group is successful in purchasing the Commanders.”
New stadium in Virginia?
Since FedEx Field is one of the oldest stadiums in the NFL, the Commanders have explored a litany of options for a new venue. Last spring, the Commanders acquired the rights to purchase land in Woodbridge, Virginia, in an area located about 25 miles south of the U.S. Capitol building. The option to purchase the 200 acre-plot of land carries a cost of approximately $100 million. The team’s lease at FedEx Field expires in 2027.
The area could include retail shops, apartments, restaurants, a small music arena, and a new practice facility for the franchise, ESPN reported.
Daniel Snyder, who purchased the team for $800 million in 1999, embarked on a road show two years ago with Commanders President Jason Wright and other team officials to inform the club’s plans on a new stadium. Beyond the Woodbridge site, the team considered several other locations, according to The Washington Post. Other sites among consideration include an area around FedEx Field, as well as RFK Stadium, the home of the franchise for four decades through 1996.
What the stadium would look like on this site: https://t.co/1vCesGTlh3 pic.twitter.com/axjjK8gUPZ
— John Keim (@john_keim) May 23, 2022
Fanatics Sportsbook, which is only available in one state as of mid-April, intends to expand to numerous others later this year. Last fall, prior to the company’s sports betting launch, Rubin indicated that Fanatics Sportsbook hopes to be live in 15-20 states by the start of the 2023 NFL regular season.
While state law allows the Virginia Lottery to issue up to 12 sports betting licenses, those awarded to pro sports franchises do not count against the cap.
Fanatics has the potential to disrupt the industry through the integration of disparate vertical brands. In May 2018, the NFL and Nike signed a 10-year deal that designated Fanatics as the exclusive distributor of NFL apparel from Nike. Last year, Fanatics added NFT collectibles to its portfolio with a $500 million acquisition of Topps. The combination of digital collectibles, officially licensed merchandise, and sports betting may allow Fanatics to carve out a niche that other sportsbook operators cannot offer.
The Commanders have yet to offer any sports betting enticements for fans who subscribe to the team’s loyalty program. Another NFL franchise is considering a program that would reward a season-ticket holder with a trip to the Super Bowl for winning a free picks contest, industry sources told Sports Handle at a sports business conference last December. Such a contest would likely need to receive league approval before it is offered.
Remaining hurdles
Although the Harris-led group reportedly has a deal in principle to purchase the Commanders, the group has not signed an agreement, multiple outlets reported.
Steve Apostolopoulos, a billionaire founder of Toronto-based private equity fund Six Ventures Inc., still remains in the running to win the ownership bid, according to ESPN. Apostolopoulos also reportedly submitted a bid to buy the franchise for $6 billion. The existing league record is $4.65 billion, spent by a group led by Walmart heir Rob Walton to purchase the Denver Broncos last year.
A deal to purchase the Commanders likely will not be approved until the NFL league meetings scheduled for late May in Minneapolis, ESPN reported Thursday. Any potential sale requires approval from at least three-quarters of NFL team owners before the transaction is finalized.
Jill R. Dorson contributed to this story.
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