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What's Dan Snyder's biggest exposure?

The Adam Gold Show / Adam Gold
The Truth Network Radio
March 1, 2023 3:20 pm

What's Dan Snyder's biggest exposure?

The Adam Gold Show / Adam Gold

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March 1, 2023 3:20 pm

Daniel Wallach of Wallach Legal & UNH Franklin Perce School of Law explains how tax invasion could be the biggest reason for Washington Commanders owner Dan Snyder's downfall. Synder is being accused by his partners of using the Commander's organization as his personal piggy bank. Wallach also explains what ownership could look like after Synder is no longer in charge.

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Now we've got Daniel Wallach. I love the show.

I listen all the time, Conduct Detrimental, the podcast. So let's get to it. What's Daniel Snyder's, or Dan Snyder, I don't want to get you two mixed up. What's Dan Snyder's biggest exposure here?

I think it may be tax evasion, more so than potential bank fraud. Although both are all... We lost him. We lost Daniel. But that was a great start.

Tax evasion is a great way to start. Tax evasion is what got Capone, right? Isn't that what they got? We got Daniel Wallach back? There he is. He's back. Okay.

Let me, I guess, get to it quicker before you lose me again. But he's being accused by his partners of basically using the Washington commanders, Washington football team, Redskins, as his personal piggy bank. And basically charging all these personal expenses to the team, the logo on the plane, staffing of his private yacht, private jet. And he's going to declare income whenever the company pays one of his personal expenses. You can't mix, you can't co-mingle your business monies and your individual monies, which he seems to be doing and using the team as his piggy bank. And that could create a problem for him if he didn't declare it as income on his personal federal income tax return. There could be an income tax evasion issue there if he doesn't declare it. So there could be a bank fraud, tax evasion issue, as well as, I think he's just irritating the owners. Because the last time we looked back in early November, he hired Bank of America to lead an auction process. And now we're four months to the day, it was four months ago today, that the announcement was made that Bank of America would lead a sale process.

We're no closer to finality today. Here's the thing. Daniel Wallach is joining us here on get out of his prior to sell the team.

Daniel Wallach, Wallach legal at Wallach legal on Twitter conduct detrimental the podcast. Here's the other problem that I think a lot of people have in a sports sense is that there are two things that needed to happen with even getting the line of credit. Fifty five million dollar line of credit from Bank of America based on the structure of the ownership structure of the commandos at that time is that there were three minority investors that all needed to sign off on this and they didn't.

That's where the bank fraud comes in. But also the fact that the National Football League kind of strong armed these three minority investors into forgetting this entire issue, but forcing them through mediation, which really wasn't mediation, to sell at roughly 30 cents on the dollar for what the franchise is now worth. This wasn't that long ago where they were forced to sell their shares back to Snyder for eight hundred and seventy five million dollars total. If Snyder sells Washington for seven billion, as he's trying to do, then it's really thirty two cents on the dollar.

What what they got was would be because it's worth two point eight billion as opposed to less than a billion dollars. The National Football League seems like they're running interference for Daniel Snyder. Yeah, but the three minority partners went into this with eyes wide open. They pursued an arbitration proceeding and decided to abandon it. Well, it did in the NFL.

My reading is that the NFL forced them to abandon it. Well, what happened was the minority partners wanted to subpoena, wanted the arbitrator, who, by the way, was Brad Karp, the NFL's long time outside counsel who's representing the NFL in all these various lawsuits involved. You know, John Gruden, Brian Flores, he represented the NFL in the concussion lawsuit. So he's not exactly somebody who's just like a judge. Right. Who is a mutual arbitrator.

He obviously knows where his bread is being buttered. So when the when the partners asked the arbitrator, you know, we want to get the records from Bank of America, please issue a subpoena. And then from that moment on, the NFL shut the arbitration down and strong armed, allegedly strong on these minority partners into a mediation proceeding to kind of resolve the sale price. So maybe there's an issue here of attacking the settlement agreement, suing under some kind of a fraudulent concealment theory. So maybe the league and maybe Snyder do have vulnerability to the limited partners based upon, you know, maybe not the fullest disclosure made to them during the arbitration proceeding.

But it's going to be very difficult to pierce a waiver and release. I think that ship may have sailed. I think Snyder's biggest, bigger worry is the prospect of indictments in the Eastern District of Virginia, as well as the upcoming NFL owners meeting in New York on March 26. Because if he hasn't sold the team or agreed to sell the team, I think the next shoe to drop would be the league is going to try to strip him of his ownership interest and force a sale in accordance with the NFL Constitution and bylaws, which is basically a mini trial, right, which would require 24 out of 31 owners to come to the conclusion that Snyder violated the NFL's constitution by engaging in conduct detrimental to the welfare of the National Football League by engaging all this various misalleged misconduct from obstructing the investigation to these accusations of sexual misconduct.

I think it's going to go to DEFCON 4. March 26 comes along and Snyder isn't on the doorstep of having completed a sale because it didn't take the Broncos four months to wrap up a sale and now we're about to enter the fifth month of a sale process where he still hasn't gotten a number he likes. And this is all going to redound to the detriment of the commandos and their fan base because what's coming up the NFL draft NFL free agency, you basically have caretakers and placeholders in upper management, who are who are the transition between old and new. And this the team and the franchise will be one year behind. Whereas if a new owner could come in right away, you might see some, you know, transformational hires. And this is just another reason to not even pay attention if you're a fan and just close the book on the 2023 regular season because none of these guys, the coach general manager, they're all going to be gone by 2024. Yet they're running the draft and running free agency.

Daniel Wallach conduct detrimental to podcast, which he worked into the to the last answer. And I if I'm not mistaken, you also said commandos and I appreciate that. If I influence that because I will not call them by that ridiculous name, especially while Daniel Snyder is the owner of that team.

They will always be the commandos to me. That name is 2025. What a horrible name. I think whenever Bezos or if it's Bezos in particular, they're going to just basically whitewash and eliminate anything that had to do with Dan Snyder up through and including the awful name of that team.

Such a blase vanilla name. It's gone. It may take two years because of NFL requirements to change your team name.

But I think that's going to go. Just go back to Washington football team. It was different.

It was it was beautiful. One more thing. And this is more about the way the National Football League has protected Daniel Snyder here, because there was supposed to be a written report of the sexual misconduct investigation that ultimately became just an oral briefing to the commissioner, who then a 10 million dollar fine, which Daniel Snyder can either borrow from Bank of America or pull out of a sock drawer in his house. And and then he turned the team. They turned the team over to Snyder's wife, which isn't really any different. So there was no penalty given to Washington for repeated long standing sexual misconduct. And the NFL was complicit in kind of whitewashing that. What did bother the NFL was the bookkeeping, which hid monies that Washington should have submitted or should have been going to the league's total revenue football revenue, which impacts other teams revenues as well. How does the NFL get out of this particular issue without bringing that other one back?

Well, it really shows you where their priorities lie. But, you know, I think everything is going to be sort of, you know, washed away. When Dan Snyder is is forced to sell the team or does sell the team, I think the page is turned. And when there is a new owner, if Jeff Bezos comes and buys the team or someone else does, I think that will overshadow any of the any of the league's mishandling of of the sexual harassment, sexual allegations. I mean, to this day, we're not even talking about what they did to Colin Kaepernick.

The league looks like the Teflon League. And, you know, the business of the NFL marches on. And most fans, you know, for better or worse.

And it may be an indictment about the fans. They don't really care so much about the brand as much as the media does. They care about their teams.

They care about, you know, the game that's on the field. And I think the league the league survives this. Roger Goodell might not survive it because there could be, you know, more reporting on this issue. It really does point not to the league protecting Dan Snyder, but Roger Goodell protecting him.

I mean, Jim, Jim Mersey was complaining months ago that he was kept in the dark. It's not as if not as if the owners all voted and joined hands and said, we're going to protect Dan Snyder. Roger Goodell may take his marching orders from the other NFL owners, but I think Roger Goodell has the most explaining to do here because he's in the position of shielding Dan Snyder, you know, signing off on these approving sort of the loan structure.

You know, Roger Goodell is at the head of the triangle here. It really doesn't fall to the other 32 owners unless they take no action. If they allow this inaction to persist going into month five and month six and nobody has referred charges to the league and said we should put Dan Snyder on trial, then it falls on each one of the 32 owners because Jim Mersey talked a big game, you know, three or four months ago and he never followed through on it. Mark Davis, of all the owners, should have an axe to grind with Dan Snyder because Dan Snyder allegedly was the source behind the leaks to the Wall Street Journal and the New York Times, which led to the firing of John Gruden.

So why aren't Ursay or Mark Davis stepping up? Because under the league bylaws and constitution, it only takes one owner to file charges and then that requires a league investigation and a mini trial before the other 32 owners. You need 24 to convict.

You only need one to bring the charges and start the process. So if these owners do nothing, then you could blame them. But it's been time enough already. We're now entering the fifth month after the Bank of America involvement in this auction process and we're no closer to a sale today and I think March 26th is the point of no return. I think that's where you might see some rumbling or some action being initiated against, you know, Dan Snyder because it really leaves one of the flagship franchises of the NFL in basically a state of abeyance, in a state of flux, and that's harmful to the National Football League to have a team like this operating basically under a receivership because it's really no more than a receivership. It's in a state of temporary status without any future or any semblance of belief or confidence that this is a competitive franchise.

And until he's out of there, there's no stadium deal. There's no professionally run franchise and there are questions as to whether there's more malfeasance going on behind the scenes as long as Dan and Tanya Snyder remain in charge. I think it's a question as to whether anybody would ever want to be a limited partner of Dan Snyder or by the team without full transparency of what's going on in the books and records because what's been revealed in this ESPN report by Don VanNatta chronicles, you know, like years of basically having two sets of books, cooking the books, and if I'm a prospective owner, I want to know what's really going on there. I want to look and get a clear picture of the financial health of the company and how could you get a clear picture and have confidence given that Bank of America, which issued this loan to Dan Snyder without any board approval is the same bank which prepared the prospectus and is overseeing the sale of the team. How can you trust these guys? Can't trust anybody.

Can't trust Dan Snyder, but we can't trust we can't trust Daniel Wallach. At Wallach Legal, Conduct Detrimental is the podcast and I keep saying this, if you like law and you like sports and the combination of two, there is no better place to go. I appreciate your time. We'll talk again very soon.

Best to you and yours and we'll run it back. Thank you very much, Adam. Have a great day. Enjoy the conversation as always. Always. Daniel Wallach.

Appreciate his time. All right, when we come back, a couple of things about this that I think are important to know about, I think when it comes to the commissioner, I have said before that I believe a trained chimpanzee could be as effective as an NFL commissioner as Roger Goodell. This is not to say that Roger Goodell hasn't been good. I just think that how we judge Roger Goodell, anybody could do that.
Whisper: medium.en / 2023-03-01 17:18:22 / 2023-03-01 17:23:59 / 6

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