• Loading stock data...
Thursday, November 7, 2024
DEADLINE EXTENDED: The Best Employers in Sports survey is now open through Nov. 13 Learn More
exclusive
Deals

How The Federal Reserve Is Complicating Commanders Sale

  • Commanders sale process has been impacted by interest rates that have climbed to levels not seen since 2007.
  • Typically, those part of a winning bid borrow against assets to complete a purchase of a pro sports team.
Commanders
Geoff Burke-USA TODAY Sports

The Washington Commanders bidding process has been impacted by something outside of owner Dan Snyder’s control: the Federal Reserve.

The cost of borrowing has gone up as the Fed has attempted to tamp inflation with rate hikes. The increased cost of borrowing has become an added barrier for those interested in the Commanders, two sources told Front Office Sports. 

“It’s a very big deal,” one banker familiar with the process told FOS. “A lot of rich people are saying, ‘I don’t have that kind of cash, and I don’t want to move my assets out of where I have it.’ It’s not like billionaires keep piles of cash around.”

The prime rate is currently at 8%, the highest since 2007. That rate impacts not only the would-be controlling owner of an NFL franchise. 

The NFL requires that at least 30% of a team purchase be liquid (cash) held by one person who’d become the controlling owner. The rest can be raised through limited partners (co-owners) and financing if borrowing complies with the NFL’s debt restrictions. 

Typically, those in an ownership group would borrow against their assets —  at least in the short term — to amass the funds needed to purchase a team. 

So far, only the group led by Philadelphia 76ers and New Jersey Devils owner Josh Harris has successfully managed the economic landscape. Harris’ bid is nearly $6 billion, and FOS previously reported that it’s the lone credible bid for the Commanders. 

And there’s one interested party who doesn’t have to worry about interest rates: Amazon founder Jeff Bezos. Reps for the third-richest person in the world have continued to monitor the process, although Bezos has yet to submit a bid. 

The prime rate was 3.25% when Snyder secured league approval to take on debt as part of a buyout of three co-owners in March 2021. Snyder financed half of the $900 million to secure the 40% of the Commanders he did not own. 

Beyond interest rates, fears over a banking crisis have reportedly impacted the bidding process of Manchester United

The Guardian reported earlier this month that uneasiness with the stability of the banking system and the cost of new debt has limited what was expected to be a major bidding war for the club. 

Manchester United, owned by the Glazer family, who also control the Tampa Bay Buccaneers, began exploring a Premier League club sale in November, days after Snyder announced he’d do the same with the Commanders.

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

Cardinals Return to DSG at Reduced Fee, but Company’s Issues Remain

The team’s revised rights deal includes a lowered fee and newly added streaming rights.

NASCAR Season Wraps Up With Major Momentum for 2025

Cup Series races this year have averaged 2.89 million viewers.

NFL TV Ratings: Can Amazon Keep Up Record ‘TNF’ Pace?

Thursday night games are averaging 13 million viewers.

2024 NFL Trade Deadline More Active Than 2023

Several big-name players found new homes.
podcast thumbnail mobile
Front Office Sports Today

Is Trump Recruiting Sports Figures for Future Cabinet?

0:00

Featured Today

NFL Center Connor McGovern Is the Heir to a Potato Empire

The NFL vet’s family provides potatoes for McDonald’s, Wendy’s, and others.
Vanderbilt Commodores fans head to the south end zone as the goal post is taken down by exuberant fans after beating No. 1 Alabama 40-35 at Vanderbilt Stadium in Nashville, Tenn., Saturday, Oct. 5, 2024.
opinion
November 2, 2024

Something New in College Football This Year: Parity

Upsets, surprises. CFB is more fun on the field than the NFL.
Sep 28, 2024; Tuscaloosa, Alabama, USA; GOP Presidential candidate Donald Trump waves flanked by former Georgia Bulldogs player Herschel Walker, recording art Kid Rock, professional golfer John Daily, Alabama senators Tommy Tuberville (R) and Katie Britt (R) during the second half of the game between the Alabama Crimson Tide and the Georgia Bulldogs at Bryant-Denny Stadium.
November 1, 2024

Mission Swing State: College Football’s Political Advertising Battle

Trump, Harris, and the PACs that support them are utilizing the sport.
October 31, 2024

The Untapped Revenue ‘Powder Keg’ of Women’s NFL Fandom

There’s a “boatload” of money at stake for brands and the league.
Oct 27, 2024; Seattle, Washington, USA; Buffalo Bills quarterback Josh Allen (17) passes against the Seattle Seahawks during the second quarter at Lumen Field.

Buffalo Bills in Talks to Sell Stake to PE Firm Arctos: Report

Arctos already has a slice of Paris Saint-Germain and the PGA Tour, among other assets.
May 24, 2024; Minneapolis, Minnesota, USA; Dallas Mavericks owner Mark Cuban celebrates after defeating the Minnesota Timberwolves in game two of the western conference finals for the 2024 NBA playoffs at Target Center.
October 9, 2024

Why Mark Cuban Sold the Dallas Mavericks When He Did

Cuban sold his majority stake to the Adelson family in December 2023.
Jul 7, 2021; Tampa, Florida, USA; Tampa Bay Lightning owner Jeff Vinik hoists the Stanley Cup after the Lightning defeated the Montreal Canadiens 1-0 in game five to win the 2021 Stanley Cup Final at Amalie Arena.
October 25, 2024

Lightning Sell at $1.8B Valuation, Nearly Double Prior NHL Record

The Lightning unveiled a multistep and multiyear sale process.
Sponsored

How UBS Crafts Impactful Partnerships Across Sports, Arts, and Culture

As UBS continues to expand its impressive array of sports and entertainment partnerships, the company solidifies its position as a leader in wealth management.
Young fans look over Michigan State sports equipment on display during the Spring Showcase on Saturday, April 20, 2024, at Spartan Stadium in East Lansing.
October 2, 2024

Private Equity Firms Buy Rival Hockey Brands CCM and Bauer

Both brands have been around for decades and changed ownership in the same week.
September 18, 2024

Rogers Tightens Grip on Canadian Sports With $3.46B MLSE Stake

The Blue Jays owner makes a big move to corner most of the Toronto pro sports market.
Fans watch TV screens during a game viewing party for fans at the FanDuel Sportsbook at Meadowlands Racing & Entertainment in East Rutherford, New Jersey.
September 18, 2024

FanDuel Parent Buys Italian Gambling Company in Bid for Growth

Flutter is making big moves in Italy and Brazil.
September 12, 2024

Team USA’s Uniform Maker Is Shooting for a Long-Term Win

This week’s uniforms are honoring the Armed Forces.