By Thomas Heath
Washington Post Staff Writer
Wednesday, January 9, 2008
Is it time to feel sorry for Dan Snyder?
Yesterday, Joe Gibbs, the head coach of Snyder's Redskins and a Washington sports icon, announced that he was leaving the team and his $5 million salary. The Redskins' season ended Saturday with a loss to the Seattle Seahawks in the first round of the NFL playoffs.
On Monday, because of the writers' strike, NBC pulled the plug on its highly rated Golden Globe Awards program, which Snyder's private-equity firm, Red Zone Capital Partners, acquired last summer as part of his $175 million purchase of Dick Clark Productions.
And then there's Six Flags. Shares in the amusement park chain, of which Snyder is chairman, began the year near their all-time low, though they got a slight boost yesterday on reports that fourth-quarter attendance and revenue were up.
But feeling sorry? A little perspective might be useful. Snyder is believed to be one of the wealthiest people in the region. The Redskins are one of the biggest cash cows in sports, worth more than $1.4 billion, according to Forbes magazine. And there seems to be no limit for fans' love for the team and their willingness to pay top dollar to see the Redskins play.
Snyder isn't talking about his circumstances, declining through a spokesman to comment for this article. But those who know him and those who watch him have their own points of view, and they differ.
A Snyder associate who spoke on the condition of anonymity said surface turmoil in Snyder's empire might be deceiving.
"Dig deeper," the associate said, "and it's just not the case."
For example, this person said, Snyder's private-equity firm gets a rights fee for the Golden Globe Awards whether it is televised or not.
Dwight C. Schar, chairman of Reston-based home builder NVR and a partner in the team and in Red Zone, said yesterday that Six Flags is on track to be successful and that the investment in Dick Clark Productions is paying off.
"We feel very fortunate about the Redskins and where we are," Schar said. "The organization is in great shape to move forward. And we feel good where Six Flags is headed. It's on track. And we are very happy with Dick Clark because our earnings are going to be up 50 percent."
Some observers argue that Snyder is a victim of circumstances. Six Flags is still a work in progress. Bad weather and a bad accident -- a girl was seriously injured in an accident at a park in Kentucky last year -- hurt performance in 2007. And the Golden Globes are a victim of the writers' strike, with celebrities declining to cross picket lines.
"In some cases the cause is macroeconomics," said Marc S. Ganis, a Chicago sports-marketing consultant who has followed Snyder's career as an NFL owner. "It's a labor dispute he has no control over. The Seattle Seahawks on Saturday were having a better day."
Ganis said he expected Snyder and his executive team to invest even more in the businesses, which include Johnny Rockets, a 1950s-themed restaurant chain in the midst of a major expansion.
"His character is to look at this chain of events and then add more to the plate and redouble his efforts," Ganis said. "This kind of thing just challenges him to do even more. He had major setbacks in his early 20s, and by 35 he owned one of, if not the most, important sports franchises in America. Check back next year."
Others aren't as optimistic.
"Six Flags is in really bad shape," said Stephen R. Howard, an attorney who specializes in investment management in private equity. "The Golden Globes is only as good as its image, and its image is going to be very badly tarnished. Those two are going to require a lot of management expertise to reverse."
Snyder, 43, made his first fortune as founder and chairman of Snyder Communications, a marketing company he sold in 2000 for $2.3 billion.
He has been assembling an entertainment empire since purchasing the Redskins for $800 million in 1999. Two years ago, he formed a $750 million private-equity fund, Red Zone Capital Partners II, concentrating on media and entertainment properties.
Snyder became chairman of Six Flags after a proxy fight in 2005, after which he threw out the old board and installed Six Flags chief executive Mark Shapiro, himself and Schar. Red Zone owns around 12 percent of Six Flags stock.
Around the same time, Snyder, Schar and Shapiro, working under a partnership called First and Goal, made a two-year deal with Tom Cruise's production company to pay $3 million to $10 million a year for the opportunity to finance Cruise's film projects.
Cruise was in Snyder's suite at Saturday's game in Seattle, and Snyder, Schar and Shapiro are listed as the executive producers on Cruise's movie "Valkyrie," which is scheduled to open this year.
And there are no signs that the fans have given up on the Redskins.
"Demand should continue to be strong next year," said Jeff Greenberg, founder and owner of ASC Ticket, a major online seller of tickets in the Washington region. "If Snyder makes a splash with a big-name coach like Bill Cowher or someone like a Jimmy Johnson type of guy, demand could be even better next year."