In 1997, Jack Kent Cooke, owner of the Washington Football Team, died at the age of 84. His last will and testament, however, was not a simple document, and instead of outlining a clear path forward, it threw the organization into a prolonged and complicated sale process.
John Kent Cooke, his son, inherited $10 million, but the majority of his estate was directed to be given to a foundation in order to pay for college scholarships. At the end of this process, the stadium that bore his father’s name, as well as the Washington Football Team itself, were sold to Daniel Snyder. Daniel led an investment group interested in purchasing the team when it was auctioned, and he successfully did so in May of 1999.
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Initial offers and momentum
The sale of the Washington Football Team and its accompanying stadium started to see attention in 1998, when a financier from New York named Andrew Penson made an offer to purchase the assets before bidding. Penson was backed by Lehman Brothers, and he offered $450 million to purchase the team and stadium. At the time, this was the most anyone had ever tried to spend to purchase a football team; it also proved to be only about half of what the team ultimately sold for.
By November of that year, lifelong fan Daniel Snyder had expressed interest in purchasing the Washington Football Team. He joined the bidding process after being given an offer memo from Morgan Stanley Dean Witter.
About Daniel Snyder
Dan Snyder was the co-founder of Snyder Communications with his sister Michele. Together, they grew their marketing services company from $43 million in 1995 to $333 million in revenue by 1997. In 1996, Dan Snyder had made a remarkable achievement, and at the age of 31 was the youngest leader of a company with a listing on the New York Stock Exchange.
Opposition and Coalition
Cooke’s son, John Kent, wanted desperately to keep the Washington Football Team within the family, but there was stiff competition. 10 bidders had made very serious offers to purchase the team by the initial deadline of November 23. These including Peter Angelos, majority owner of the Baltimore Orioles, Sam Grossman, a hotelier from Arizona, David Bonderman, an investor from Fort Worth, John J. McMullen, a shipbuilder and the owner of the New Jersey Devils, and Howard Milstein, a New York real estate investor.
Sam Grossman’s investment group included Joe Gibbs, a former coach of the Washington Football Team. David Bonderman’s group included Ted Lerner, who would go on to own the Nationals. Many expected the team to sell for over $500 million. Snyder built a coalition with Howard and Edward Milstein, who also owned 45 percent of the NHL’s New York Islanders.
The trustees overseeing Cooke’s estate were to make a decision over whose build would be chosen by Christmas, at which point NFL owners would have the opportunity to approve the transfer of ownership of the Washington Football Team.
Fast moves
The next round of bidding was opened up to eight investment groups and was due on December 22. The Dan Snyder-Milstein alliance offered the trustees over $700 million in cash for the team, but stipulated that their offer expired on December 23. The trustees rejected this bid, but ultimately signed an agreement in early January with Milstein and Snyder to purchase the Washington Football Team for around $800 million. While Cooke aimed to keep the Washington Football Team, he simply did not have the money.
The transfer of ownership complicated operations. With the approval not yet completed, the team was not able to recruit quarterback Trent Green, with whom they were negotiating a four-year deal. The NFL wanted the Cooke family to keep the team, and made a number of exceptions to ownership rules, including waiving financial and personal wealth requirements, to allow Cooke to keep the team.
The NFL then spent months looking over Milstein and Dan Snyder’s agreement. They asked for more documentation and requested that Milstein restructure the loan at the center of the deal, with concerns that it required taking on too much debt. They also expressed concerns that Milstein was overly litigious.
Milstein and Daniel Snyder asked the NFL to delay voting on whether or not they could purchase the team, and then worked in what they called overtime to address the NFL’s concerns and satisfy their fellow team owners.
Before April 7, Milstein received a loan from his father, and though this helped to satisfy some of the financial concerns team owners had in theory, it also didn’t create the support that the duo needed to bring the sale to a close.
Wrapping Up the Deal
This is when Daniel Snyder began pursuing a deal on his own to purchase the team for $800 million. He received backing from his family members, Mortimer Zuckerman, and Fred Drasner, and neared a deal, eliminating competition from Cooke as well as Grossman, who attempted to purchase the team with FedEx founder Fred Smith.
The trustees were now legally obligated to Daniel Snyder, and the deal closed on May 25, 1999. Dan Snyder’s ownership of the Washington Football Team was unanimously approved, and he paid over $250 million more than anyone had ever spent on an NFL franchise to do it.
After this happened, Milstein sued John Kent Cooke and Charley Casserly, manager of the Washington Football Team, for undermining his deal, but the suit was thrown out. Cooke called the family losing the team a tragedy, but said that he looked forward to the future of the team regardless.
About Daniel Snyder
In addition to owning the Washington Football Team, Daniel Snyder is also the Chairman of the Board of Six Flags Inc., owner of the Johnny Rockets restaurant chain, and the primary investor in Red Zebra Broadcasting. He is married to his wife Tanya and has three children. His father, Gerry, was a freelance writer who wrote for UPI and National Geographic.
His first successful business involved leasing jets to fly college students to spring break parties in Fort Lauderdale and the Caribbean, and he says that he earned over $1 million operating the company out of his parents’ bedroom with just a few telephone lines.
In April 2000, shortly after purchasing the Washington Football Team, Dan Snyder sold Snyder Communications to Havas, a French advertising and marketing group, in an all-stock deal valued at over $2 billion. He earned over $300 million from this, which became the largest transaction in the history of the marketing industry to date.
Since purchasing the Washington Football Team, the team has earned up to $100 million annually, making them the NFL’s second-highest-grossing team. Other sports franchises have followed in Dan Snyder’s footsteps by selling naming rights, creating a better experience for fans, upping capacity, and selling club seats that had been sitting empty for years while the Cooke family owned the team.
Daniel Snyder is also the current Chairman of the Board of Ventiv Health, a board member of McLeod USA, and was the owner of Dick Clark Productions from 2007-2012.
Click here to learn more about Washington Football Team owner Daniel Snyder.
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