May 19, 2024

Read the Full Report on the Investigation of Dan Snyder

Specifically, records show that the Club made improper and/or unexplained accounting entries or adjustments from 2009-2015 that reduced shareable income held in two ways: Sponsors, Brokers and Customer Misclassifications. Working with forensic accountants, the Investigation identified, for the 2011-2015 seasons, approximately $9 million, which appears to have been protected by misclassification of distributable income held in accounts related to certain large sales to sponsors and brokers and customers (the “Sponsor, Broker and Customer Misclassifications”). A significant portion, approximately $7 million, includes revenue derived from NFL tickets sold or traded to sponsors at undervalued prices or revenue from NFL game-related amenities diverted to special events. Contemporary emails discussing these incomes revealed a clear intent to falsify income records to avoid sharing. For example, the July 2010 communication reveals that the Commanders determined that a “less obvious” way to “the VTS implications” of an NFL hospitality tent sold to a sponsor was to divert the revenue ($17,773) to hospitality tents for a Virginia Tech college game, even though “the deal does not refer to VT” and “will not refer to VT” for example. [sic] send them the tickets.” When an employee asked if it was “kosher” to “just redirect[] the income to non-divisible [sic] department,” replied a senior executive, “a [sic] Sponsor, Broker and Other Customer Misclassifications apparently involved: (i) selling NFL tickets through brokers or on internet ticket sales platforms and then classifying the resulting revenue as special event revenue; (ii) reclassify NFL ticket revenue as nondistributable revenue in hospitality accounts (for special events); and (iii) recording forfeited security deposits on NFL season tickets, as “2.4 recognizes deferred special ticket transfer account revenue.” protecting NFL revenue from sharing to perly, a forensic accounting review was conducted of certain transfers of revenue from NFL-related accounts to special event accounts. This review identified that, for the 2009-2015 seasons, an additional $44.49 million of ticket, parking, license and other revenue originally recorded by the Club was transferred to an account identified as special event-related revenue that had been transferred (unallocated revenue”) The Club provided information recently available which showed that the Club’s accounting practices involved the commingling of divisible and non-divisible football-related special event revenue into the underlying account. However, due to the unavailability of accounting documentation to support the appropriateness of the vast majority of these transfers and the apparent inconsistencies and weaknesses in the Club’s historical accounting practices, the Investigation was unable to conclude how much of the Deferred Revenue Transfers represent legitimate non-distributable income or have demonstrated improper income inclusion practices, including those identified in the Sponsor, Broker and Customer Misclassifications. In order to determine whether unreported allocable income was included in the Deferred Income Transfers, we identified for the Club the specific general ledger journal 24 These categories of potentially misclassified income occurred in the following seasons: 2011 ($0.33 million); 2012 ($3.00 million); 2013 ($1.79 million); 2014 ($1.88 million); 2015 ($2.03 million). 16

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