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There is no way to ignore the scrutiny Daniel Snyder is always getting from sports media these days. Understandably, the Washington football team owner has remained relatively withdrawn from interviews and other opportunities to share his views in depth. Most of the internet buzz focuses on his shortcomings in team management, but the financial success he brought to the franchise is rarely noted. Here is a roundup of what Snyder has gotten right.
When the deal for the Redskins was finalized in 1999, the price tag of $750 million was unprecedented. But Snyder came in strong with his momentum of success in his previous business ventures. He wasted little time in using his investment acumen to round up $350 million in funding. This ambitious feat turned out to be more than worth it for the team. At the time, annual revenue was only estimated to be around $160 million. By 2004, Forbes recognized them as the most profitable franchise in the NFL, at $1.26 billion. Since Snyder stepped in, the franchise has become a cash cow- nearly doubling annual revenue to $300 million annually.
The increase was accomplished through aggressive marketing and stadium upgrades.
After making a deal with FedEx for the naming rights, Snyder was able to funnel funds back into the stadium, which was eventually renamed FedEx Field. The agreement has brought in $200 million over the past 20 years. The revenue was used to add 10,000 seats, including an increase in the amount of luxury suites. The stadium then became the largest in the NFL, boasting room for 92,000 fans. Snyder also introduced the creation of two clubs- the Tailgate Club and the Touchdown Club- that offered more affluent fans special access to season-tickets for a mere $7,500 (despite a waiting list of 160,000). Concession stands became more automated, and new restaurants were opened. Sponsorship revenue showed a huge increase, growing from $4 million to $48 million. Over the years the team’s value has skyrocketed to $3.4 billion, currently holding a place at the 5th most valuable team in the NFL. Many of these business moves were new to the realm of sports, and opened doors for other teams to follow suit.
Dan Snyder’s business expertise has also carried over into the NFL institution as a whole. He was reportedly very instrumental in the March 2006 NFL internal-revenue sharing deal negotiations, and not to serve his personal best interests either. Even though his own franchise was dominating financially, Snyder knew that the NFL as a whole would have more prosperity if each team had a fair stake. When the existing labor and revenue sharing agreement was up for renegotiation, a divide of league members became apparent. Big-city owners such as Dallas Cowboys’ Jerry Jones were facing smaller-market owners like Buffalo Bills’ Ralph Wilson. NFL teams that make their home in major cities earn considerably more revenue. Larger cities translate into a larger and wealthier customer base, which makes the demand for luxury clubs and box seats more competitive. Bigger stadiums can hold more fans and justify higher costs, bringing in from $50 to $100 million more in revenue than small-city teams. Similar to Dan Snyder, the bigger teams are usually owned by those with previous success in the development, investment, insurance, marketing and media sectors. This gives them an advantage when it comes to the inner logistics of running an NFL team for maximum profit. To essentially ‘level the playing field’, the NFL’s national television revenue was already split evenly between the 32 teams. But the top teams’ owners began to feel pressure from the small-city teams, demanding that they commit to increased sharing of locally generated revenue. Larger teams argued some hefty counterpoints, citing higher costs. Smaller teams are sometimes granted tax-payer funds for construction costs, while larger teams don’t have the same safety nets- often footing the bill for stadium renovations with no NFL assistance.
In the end, Dan Snyder took the higher ground, and helped convince his colleagues to follow suit. He unified owners in a mutual goal, to preserve the integrity of the game. Despite having no legal obligation to do so, the highest-grossing team owners gave leeway, and a more equitable agreement was reached. While the terms of this deal have since been changed, the impact changed the discourse for equal representation in the NFL.
Sure, Dan Snyder has notably fallen short of Washington fan’s expectations for their beloved team’s performance. But minimizing Snyder’s behind the scenes contributions does a disservice to the financial powerhouse. Those who love the sport as much as their home team have, perhaps unknowingly, benefitted from Dan Snyder’s disruption of the league’s status quo, transforming the industry as we know it today.