The involvement of billionaire industrialist Mitchell Rales in the Josh Harris-led bid to buy the Washington Commanders gives owner Daniel Snyder a deep-pocketed alternative to selling to Amazon founder Jeff Bezos and provides the NFL and its team owners with an appealing mix of well-established local roots and an impressive record of business success.
The news of Rales’s inclusion, confirmed Thursday, also arrived at a critical juncture. Some NFL owners and others involved in the sale process are intent upon trying to persuade Snyder that he would be best-served by striking a deal in the coming weeks, according to multiple people close to the process. Still, it remains unclear whether an agreement can be reached before NFL team owners convene in Phoenix for the annual league meeting this month, according to five people with knowledge of the sales process and the owners’ views. The meeting is scheduled to begin March 26 and is expected to last three or four days.
Some NFL owners remain skeptical that Snyder can be convinced to sell the franchise voluntarily and are girding for further contentiousness with him, a person with direct knowledge of the owners’ deliberations said last week.
The wild card in closing any deal is Snyder, 58, who has owned the franchise since 1999. His intent is not entirely clear. Is he selling the team or simply reassessing its value? How deep-seated is his animus toward Bezos? Would he refuse a top-dollar offer from the world’s third-richest person because of a grievance against The Washington Post, which Bezos owns, or is that merely a bargaining tactic? Finally, will Snyder’s demands over price and terms prolong the process for months, if not years, or mire it in litigation?
Snyder is thought to be seeking at least $6 billion for an asset with a fair-market value estimated by some observers at $4.7 billion to $5.6 billion. He also is seeking indemnification against future legal liability and costs, according to people familiar with the sales process and other team owners’ views.
In the Harris and Rales partnership, Snyder would get buyers who can write a check for fair-market value, plus the premium that’s typically tacked on for the cachet of owning one of 32 NFL teams.
The combined net worth of Harris and Rales is estimated at $11.3 billion to $14 billion, according to Forbes and Bloomberg’s Billionaires Index.
Snyder also would get buyers who are well known to the NFL, easing the approval process that requires the assent of at least 24 of the other team owners. Harris, 58, built his wealth as co-founder of investment firm Apollo Global Management. With business partner David S. Blitzer, he is also principal owner of the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils, as well as a limited partner (reportedly less than 5 percent) in the NFL’s Pittsburgh Steelers.
Rales, 66, though not a household name, is well known in business circles as co-founder of Danaher Corporation and is among the D.C. area’s wealthiest residents, with a net worth estimated by Forbes at $5.5 billion.
He had given away $2 billion at the time he and his wife, Emily Wei Rales, signed the Giving Pledge, created in 2010 by Warren Buffett and Bill and Melinda Gates, in which the world’s billionaires make a public vow to give away the bulk of their fortunes to philanthropic causes before or upon their death. NFL owners Arthur Blank of the Atlanta Falcons and Stephen Ross of the Miami Dolphins are fellow signatories, as was late Seattle Seahawks owner Paul Allen.
Snyder might find value in placing the team in the hands of owners with Washington-area roots. Like Snyder himself, Harris and Rales grew up in Montgomery County cheering for the hometown team.
They are not the only bidders, though. Other prospective buyers include Bezos and Tilman Fertitta, owner of the NBA’s Houston Rockets. A person familiar with Fertitta’s bid said recently that he did not appear to be the front-runner to buy the team.
Rales grew up in Bethesda as the third of four sons in what he has described as a middle-class family. His father was in the home-improvement business, but rather than pave his children’s path, he urged his children to create their own opportunities.
He and his eldest brother, Steven, started out by buying smaller companies and real estate properties in 1979. From that, they co-founded Danaher, named for a trout stream in Montana, and built it, through acquisition and expansion, into a conglomerate of companies that manufacture medical-research equipment, dental equipment, piping, wrenches and drill parts, among other things.
Mitchell Rales has shunned interviews and the spotlight since a Forbes article early in the brothers’ careers cast them as “Raiders in short pants” — a descriptor he took as a swipe at their youth, inexperience and lack of substance.
That slight, Rales explained in a 2012 Washington Post interview, drew him to abstract impressionists, who were treated in their day as artistic “outlaws.”
“It was the same thing for my brother and me,” Rales said. “It was these two young guys doing what they were doing. People said: ‘Something must be wrong. They did not pay their dues.’ ”
Rales maintains a low public profile outside the art world. He is president of the National Gallery of Art and co-founder and chief benefactor of Glenstone, the private art museum he founded with his wife in 2006. Its modern pavilions showcase their world-class collection of modern and contemporary art, with additional installations arrayed on the nearly 300-acre property in Potomac — roughly three miles from Snyder’s palatial River House estate, which is on the market for $49 million.
In the world of commerce, Rales and his brother are regarded among the great business builders of the era, with Danaher’s stock skyrocketing over the past 30 years.
Danaher was a single-digit, billion-dollar market-value company when Boston-based venture capitalist Alan G. Spoon joined the company’s board in 1999. Today, Spoon notes, it’s one of the more valuable companies in the Mid-Atlantic and on the New York Stock Exchange with a value well over $100 billion.
“This hasn’t been done though short-term trading or maneuvers,” said Spoon, a former president of The Post. “It has been done through a long-term commitment that is mindful of longer-term competitive dynamics to build a lasting edge.”
At the heart of Danaher’s success, Spoon said, is a values-based philosophy of continuous improvement, known as the Danaher Business System, that focuses on accountability, the customer, turning problems into opportunity and the conviction that in business “the best team wins.”
“Continuous improvement is the way the place lives,” Spoon said. “It shows up in the way investments turn into ever-growing, valuable franchises and enterprises. And it’s not unrelated to the way one would think about maybe a great football franchise operating.”
That approach is what Spoon expects Harris and Rales to bring to the Commanders, if their bid is successful.
“Mitch keenly supports whatever enterprise he connects himself to, but stylistically, Mitch won’t choose to be the face of the team if they succeed,” Spoon said. “He’ll certainly be there in financial support and more. But Josh appears to be taking the lead on this.”
Rales lived through the glorious eras of Washington’s NFL team in the 1970s, ’80s and ’90s.
“In Mitch’s mind, he sees the palpable heritage of the team and its future as being a rallying point of the community,” Spoon said. “That’s the way Mitch operates. Glenstone is a commitment to the community. His philanthropy is a commitment to the community.”