Crunch Time

Brash young entrepreneur Daniel Snyder bought the Washington Redskins for the highest franchise price in sports history. Now all they have to do is win.

It's easy to stereotype Daniel Snyder, the 35-year-old majority owner of the National Football League's Washington Redskins, as another cold-hearted millionaire wrenching pro sports from the grasp of the common fan. On a hot summer day at Redskins Park in Ashburn, Virginia, he sits on the sideline in a tie and sunglasses. His arms folded like a sultan, he watches his beefy hired hands complete a preseason workout. He talks to nobody.

Snyder's imperious manner hasn't helped his public image in Washington, D.C., where even the most powerful politicians are careful to play at populism, driving undersized cars and wearing drab suits. Young and brash, Snyder leaves no doubt as to his stature. His helicopter stands ready nearby, his limousine is parked in front of the complex, and his employees refer to him as Mr. Snyder, in contrast to John Kent Cooke Sr., who owned the team for a quarter-century and was "Jack" to everyone.

Snyder amassed his fortune in the nebulous area of direct marketing. He wasn't an Internet genius or a titan of industry, so he had almost no public profile when his name surfaced in 1998 as part of a group attempting to buy the Redskins. That effort foundered, but after restructuring his bid at the behest of the league and supplanting real estate billionaire Howard Milstein as majority investor, he paid the staggering sum of $800 million to Cooke's heirs last year for his hometown team and its new stadium. It was the most expensive franchise transaction in American sports history.

With almost $500 million in debt, Snyder must maximize his revenue. So he ignored the public outcry and sold naming rights to Jack Kent Cooke Stadium for $207 million over 27 years; the venue is now known as FedEx Field. He converted part of its press box into 12 profitable luxury suites, banishing some reporters to a media room with monitors in the bowels of the stadium. To trim fat from the corporate payroll, he fired 25 Redskins employees, many with years of service, a housecleaning of Steinbrennerian proportions that instantly earned him the nickname "Boy George."

This year Snyder broke a 10-year lease with Maryland's Frostburg State University and relocated preseason workouts to Redskins Park. He then charged fans $10 to watch them, an NFL first and an audacious bit of entrepreneurship that was roundly criticized. Perhaps as a backlash against the creeping commercialism that has invaded American sports—the sponsored college bowl games, the pay-per-view boxing matches, the ads and corporate logos on baseball backstops—fans raged at Snyder on radio talk shows, and the media has treated him no better. The Washington Post's Style section last year tweaked him after each game with a snarky "Dan-o-Meter" (which monitored his post-game emotional state, i.e.: "Gloating," "Heads Will Roll," "Double Hernia"), while a feature in The New York Times Magazine posed the question, "Why do so many people around Washington hate him so much?" One Dallas weekly even compared him to Hitler.

But look closer. The kids getting autographs from new Redskins cornerback Deion Sanders, or scampering barefoot through a 40-yard dash at the NFL Experience, a football theme park set in Ashburn for the duration of training camp, wear ice-cream-truck smiles. Adults, too, mass against a rope divider, angling to get a rare opportunity to ogle their heroes in the flesh. (The team has sold out every game since 1966, and many of the seats are held in perpetuity, as business tools and status symbols, by lobbyists, law offices, and corporations. The waiting list for season tickets now numbers 47,000.) In the end, it turns out the only ones who disapproved of the daily $10 open house at Redskins camp were those who didn't visit. "We didn't even make money on it, we lost our shirts," Snyder insists. "But this isn't about making money. It's about maintaining our connection to the community."

Snyder has installed escalators to the cheap seats at FedEx Field, revamped an inadequate parking system, and mandated a fan-friendly interactive Web site that takes users inside the Redskins locker room—all in the name of upgrading the Redskins experience. And he has proven at least as interested in the bottom line printed in the newspapers every day as in the one that his accountant shows him. With Snyder urging them on from the owner's box, the Redskins won 10 out of 16 games last season, their best performance since the Super Bowl season of 1991. If not for a botched snap on a field goal attempt, in fact, the team would have played against St. Louis for the NFC championship.

This magnate actually felt the disappointment as acutely as anyone in the organization. "I'm a huge fan," he declares. And behind those opaque sunglasses and that CEO's frown, Snyder is having the time of his life. It would be an exaggeration to say he bought the team in order to upgrade the location of his game-day seats, but not much of one. By age seven he was sporting a Redskins belt buckle and committing statistics to memory. For much of his adolescence, he held weekly indoor picnics in front of the TV at his parents' Rockville, Maryland, home, watching the Redskins and eating his mother's chili.

His ardor for watching the sport, as opposed to even playing it, foreshadowed his success as an entrepreneur. "As a child I loved the decision-making aspect of football," he says. "I loved that there was so much going on and it was all choreographed. It was like chess, and it was all about figuring out what you were going to do and then doing it." Snyder must have been the only Rockville teenager who dreamed of being an NFL owner.

As the Milstein negotiations were collapsing, the NFL asked him if he would consider bidding for another team. Not another NFL team, he responded, and for that matter, he didn't want any team in any other sport. "I only care about the Redskins," he said. Anyone with doubts as to his sincerity need only follow the money, as they like to say in Washington. Since the playoff loss in January, Snyder has signed Sanders (to a $56 million, seven-year contract), quarterback Jeff George ($18 million), defensive back Mark Carrier ($15 million), and pass rusher Bruce Smith ($23 million), loading up the Redskins' roster with so many big names that a team only 18 months removed from the 6-10 record of 1998 is now favored to reach the Super Bowl.

Such enthusiasm in the name of winning is infectious, even if the expectations that it engenders can be daunting at times. "It has rejuvenated me," says Carrier, who signed with the Redskins this year after seven seasons in Chicago and three in Detroit. "I got the first glimpse of the excitement at our first practices on the field, but beyond that, you can tell there's something really special going on behind the scenes. Mr. Snyder is trying to create a good environment for the players, and it has carried over to the fans."

If Snyder understands the motivation in paying $10 to see grown men do jumping jacks and block out pass patterns, it's because he's every bit as thrilled to be watching as the fans are. He has a better seat than they do, of course—but then he paid more money to get in.

For years, sports teams have served as toys for wealthy men. An NFL franchise is the perfect portfolio addition for the sixty-something who has everything, a reward for decades of hawking hotels and tobacco (like Bob Tisch, who is the Giants' co-owner) or waste removal and videotapes (like the Dolphins' Wayne Huizenga). Snyder's career trajectory is markedly different. At 35, he is hardly finished making his fortune, and his spending sprees can only be regarded as investments: $800 million for a football team? $56 million for a defensive back? Profit-making opportunities, if you run your business effectively. "He is from square one an entrepreneur, and entrepreneurs evolve businesses," says club president Steve Baldacci, who has worked with Snyder for a decade.

Snyder's plan is to grow the Redskins brand into one of the biggest in the entertainment world. A handful of North American sports franchises—the Dallas Cowboys, New York Yankees, Chicago Bulls, and the Montreal Canadiens—have succeeded in transcending regional identities. The Washington Redskins aspire to be next, on the order of England's Manchester United soccer team, which has stores in such far-off places as Tokyo and its own television network. That requires an equity that symbolizes consistent quality, from the professionalism of the parking attendants to the taste of the hot dogs.

Mostly, though, what it requires is winning. "Our vision is to be the preeminent sports and entertainment franchise in the world," says Baldacci. "That's the vision, and we will not stand for anything less. And a determining factor as to whether we get there is if we win more championships than any other team."

You might expect that such a goal, minus the overheated rhetoric, is common to every NFL franchise. It isn't. Many owners are happy enough making their profits and watching the value of their franchise escalate. If sports franchises were bonds, NFL teams would be rated investment-quality, but such conservative thinking has led to years of frustration for their fans, who wonder why management doesn't always seem to want to win as badly as they do.

The answer can be found in the mathematics of the sport. This year each NFL team will receive more than $60 million in network-television revenue. Given that the league's annual salary cap currently limits player payrolls to $62.2 million, the single biggest expense of every franchise is accounted for before the first season ticket or sweatshirt or naming-rights package is sold.

At the same time, the league plays to 93 percent of capacity: There simply aren't that many unsold tickets to push, so why bother with innovative marketing? Merchandise sales are dispersed equally among the clubs, and visiting teams get a third of net gate receipts. Product sponsorship deals (Visa, Coca-Cola) are negotiated with the league, not individual franchises, and that money is divided too. As a result of such corporate socialism, winning a championship can be only marginally more profitable than going 8-8. If no expense is spared on the way, winning can actually cost you money. "When the 49ers were winning the Super Bowl in the '80s, they were the pinnacle of the industry, but they were losing the most money," says Jim Irsay, owner of the Indianapolis Colts. "Now, what kind of business is that?"

Losing teams—with or without favorable stadium deals—will usually still manage a positive cash flow, provided their expenses are low. "A baboon can make money in the NFL," cracks one insider. Nearly half the franchises in the league are run as family businesses, in many cases by amiable men and women with no particular business qualifications. Mike Brown in Cincinnati, Dan Rooney in Pittsburgh, Georgia Frontiere in St. Louis, Irsay in Indianapolis, and the McCaskey family in Chicago, among others, all inherited their teams from the previous generation, when entry requirements were far less rigorous. An older generation of owners, such as Buffalo's Ralph Wilson, Baltimore's Art Modell, and Kansas City's Lamar Hunt, are largely football men who live off the teams they own.

From time to time, a maverick works his way into the ranks. Oakland's Al Davis has bedeviled his peers for years with his swashbuckling attitude; "Just win, baby," he famously exhorts, professing not to care about his players' behavior on or off the field. But his free-spirited Raiders haven't won much at all, not since their 1983 championship season (in which they beat the Redskins in the Super Bowl), and they play in front of thousands of empty seats. The truth is that Davis, who owns one of the few franchise equities in the NFL with a philosophical appeal—a team that actually stands for something beyond geography—has been content to make a living, and occasionally make the playoffs.

Not Snyder, who had his first million by age 20 and has spent the last 15 years hurrying to make more. His Redskins already have debuted two television shows and a weekly newspaper, as well as promoted major concerts. Their ticket prices are the highest in the NFL: a $391.11 per-game average for a family of four. Only Dallas earns higher profits. And now comes the difficult part: creating football's next dynasty. "I've always made money," Snyder says. "It's the football that's important. It's the Redskins, it's winning the Super Bowl. That is why I bought the team. This isn't short-term; I'll be here winning Super Bowls for years and years and years."

With such unrestrained ambition, Snyder ought to be perceived as a threat by the league's traditionally clubbish and closed-mouthed owners, whose cliques and clans make the United States Senate seem like a Rotary Club. And to some extent, he has been. NFL Hall of Famer Wellington Mara, who owns the New York Giants with Bob Tisch, recently expressed concern that Snyder might be "the type of person who will only look out for himself, instead of the well-being of the entire league."

But Snyder is 35 going on 55, an intense but affable man who feels utterly comfortable in a business suit, drinking good wine and smoking a fat cigar. "Dan Snyder is just like the other guys who are owners in the NFL," says Baldacci. "That's why he got into this with the kind of support he had. He has the same level of sophistication as the other owners out there. They feel comfortable with him."

Snyder has vacationed with Denver Broncos owner Pat Bowlen in Hawaii, spent late nights after league meetings with Jerry Jones of Dallas, and bonded through the months with the gentlemanly Tisch. Smart businessmen all, they understand him. "Snyder didn't get where he is at thirty-five by not being aggressive," says Bowlen. "That aggressive style is sometimes looked at as a problem because it makes everyone else sit up, but the approach is good for the league. Dan Snyder wants to win, he paid a lot of money for his football team, and he's going to try everything he can in order to make it a champion. What's wrong with that?"

According to Bowlen, the league's owners are tracking Snyder's innovations. "Some of his ideas are going to work and some aren't," Bowlen says, "but you have to progress and move forward." Already, Snyder says, six teams have called to ask about the mechanics of charging for preseason workouts. "We've taken all the criticism, but many more teams will be doing it next year, you'll see," he says. "The NFL wants us to act like we're not doing anything especially different; that's what they've told us to say. But the other teams see what we're doing. They know."

While still a teenager, Snyder showed a deftness for dealing with his elders. As a college student he hit upon the idea of marketing a national magazine called Campus USA to his peers. They'd get it for free, but advertisers would surely pay to reach an elusive demographic. Many prospective entrepreneurs fantasize about such businesses, but Snyder talked publisher and financier Mortimer Zuckerman into backing him with $3 million, dropped out of the University of Maryland, and began his rapid ascent. "Instead of being in school, he was having meetings with people twice his age, doing business," says Karl Swanson, the Redskins' senior vice president. "He's used to dealing with successful older people. He's been doing it for years."

As it happened, the magazine idea flopped, but Snyder impressed Zuckerman. Before long, they were making money in the billboard business, and Snyder was on his way. He launched Snyder Communications in 1990, and grew his bankroll incrementally by delivering narrowly targeted markets, such as new mothers and diabetics, to advertisers. In 1996 he took the company public, becoming at the time the youngest chief executive on the New York Stock Exchange, and he used investors' money to put 30 companies with a combined value of more than $1 billion under the Snyder Communications umbrella.

Recently he sold controlling interest to France's Havas Advertising. That gives him more time to concentrate on the Redskins, though he still runs two other companies. On a typical day he works from his office until 1 p.m., then turns his attention to the team.

The level of detail at which he involves himself with football has raised eyebrows. Having fired general manager Charley Casserly, Snyder—with no game experience beyond the touch-football level—now has the final word in all roster decisions, albeit with the extensive help of head coach Norv Turner and director of player personnel Vinny Cerrato. He doesn't pace the sidelines during games like the Cowboys' Jones, but the team is unquestionably built in his image. "He's at practice every day," says Cerrato. "He has a relationship with a lot of the players. They're his players. I am learning in all aspects of the business exactly what he wants, and what he's looking for."

Typical for a Snyder operation, the levels of bureaucracy have been stripped away from the Redskins, leaving the franchise with perhaps the smallest number of employees in the league. Yet Snyder is careful not to micromanage. Those who remain are empowered to make important decisions. Snyder, who has been known to scream about blocking assignments in the owner's box, may challenge them after the fact, but he'd sooner fire an employee than do his job for him.

"If you like unlimited authority and unlimited autonomy, you'll have a blast working for Dan Snyder," comments Swanson, a former journalist who was working for an advertising agency when Snyder bought it and promoted him. "But you have to be willing to take unlimited responsibility for your actions. When I joined Dan I moved from the world of making recommendations to the world of making decisions. There are no committee meetings in this building."

Still, nobody doubts who signed off on the summer's free-agent acquisitions. And when the decision was made to release longtime Redskins running back Brian Mitchell earlier this year, Snyder broke the news to the player himself. He shrugs when questioned about his aptitude for making such judgments. He has made hundreds of millions of dollars in obscure niche opportunities he knew nothing about. Now comes football, which has been his passion since he was a child.

Still a young man, he has folded his avocation into his vocation, and goes at one with the zeal of the other. He recalls calling plays during those indoor picnics, earning the equivalent of an MBA in football while watching CBS, and smiles a secret smile. He has been training to run a football team, this football team, all his life. How can he fail?

Bruce Schoenfeld wrote about the restaurants of Vancouver Island in Departures' September 2000 issue.