Partial Owners of Washington’s N.F.L. Team Seek Path in Court to Sell Their Stake
The increasingly bitter battle for control of the Washington Football Team took a significant turn on Friday when three of the team’s limited partners, who together own 40 percent of the club, asked a federal judge to allow them to sell their shares as a group.
Such filings are rare in the opaque world of buying and selling N.F.L. teams. Most ownership disputes are handled in-house by a league arbitrator, but by taking it to court, the minority shareholders are signaling the depth of the discord with the majority owner, Daniel Snyder.
Their maneuver to court, however, risks alienating the league and other team owners.
The three limited partners — Frederick Smith, the chairman of FedEx; Robert Rothman, an asset manager; and Dwight Schar, founder of a home building company — said in their filing in United States District Court in Maryland that they had received an offer of $900 million for their combined shares.
Snyder has given legal notice to the limited partners that he will exercise his right of first refusal, but buy out only Smith and Rothman, who together own 25 percent, not Schar, who holds 15 percent of the team.
This prompted the limited partners to ask a judge to let them sell their shares as a block and stop Snyder from trying to split up the group.
The limited partners said that Snyder’s effort “flies in the face” of their partnership agreement, according to the court filing reviewed by The New York Times. The agreement, they said, gives Snyder only the right to buy all of the shares up for sale, not just the ones he wants.
“Mr. Snyder’s position also threatens to disrupt an orderly process — including, among other things, necessary due diligence — for plaintiffs” to sell their shares, the filing said.
The filing does not say who has offered to buy out the limited partners. But the partners said their window to negotiate with the potential buyer would expire on Nov. 25.
The team and the N.F.L. did not respond to a request for comment. The lawyers for the three limited partners also did not reply to a request for comment.
The dispute between Snyder and the limited partners, who bought into the team nearly 20 years ago, began in the spring. With the future of the 2020 N.F.L. season unclear then, Snyder deferred paying annual dividends to the shareholders, a decision that the partners said was made without consulting them. This led to a series of accusations that included financial mismanagement of the team and efforts to smear Snyder.
Snyder threw the three partners off the team’s board this summer, and the N.F.L. appointed an arbitrator to settle the dispute. The arbitrator has yet to issue a ruling.
At the same time, Snyder filed a defamation suit claiming a conspiracy aimed at forcing him to sell the team. In some of those filings, Snyder has hinted at Schar’s involvement in stories critical of Snyder’s stewardship of the team. Snyder has also named Schar’s daughter, as well as a company controlled by Schar and his son-in-law, in his filings.
Beth Wilkinson, a well-known lawyer in Washington, D.C., was hired to investigate allegations of widespread sexual harassment in the team’s front office, details of which were published in July by The Washington Post. The Post cited 15 women who formerly worked with the team.
Under pressure from some of his team’s largest sponsors, including FedEx, Snyder also changed the team’s longtime logo and name, which many Native American groups considered a slur.
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