Washington Commanders Agree to Pay $1.3 Million to Settle Season-Ticket Probe

Members of the media take pictures and video of the new uniforms during the announcement of the Washington Football Team's name change to the Washington Commanders at FedExField in Landover, Md., on Feb, 2, 2022. (Rob Carr/Getty Images)

The Washington Commanders agreed to pay $1.3 million to settle a two-year investigation into how they handled the return of season-ticket deposits, according to Virginia Attorney General Jason Miyares.

Pro-Football LLC, the new owner of the Commanders, will also return hundreds of thousands of dollars to fans affected by the team’s failure to return those deposits.

Mr. Miyares and his staff opened the investigation into the Commanders on April 25, 2022, into how the team retained security deposits. As a result of that probe, more than $600,000 in deposits have been returned to about 475 season ticket holders thus far.

In addition, the Commanders agreed to pay $700,000 in penalties and costs to resolve this investigation.

“I am pleased that we were able to reach a fair and reasonable agreement with the Washington Commanders that requires restitution of unlawfully retained security deposits to consumers,” Mr. Miyares said in a statement on June 18.

“Our investigation found that the Commanders’ prior ownership unlawfully retained security deposits for years after they should have been returned to consumers. I thank the team’s current ownership for cooperating with this investigation, and for working towards rectifying the consumer harm we identified,” he added.

The investigation found that since at least 1997, the Commanders had entered long-term contracts with season ticket holders, requiring some to pay refundable security deposits. Despite contractual obligations to return these deposits within 30 days of contract expiration, the Commanders illegally retained significant sums of security deposits. The Commanders also imposed additional conditions on consumers seeking refunds in some cases.

In 2014, the Commanders sent about 650 form letters to former season ticket holders with unrefunded security deposits on file, saying it would “remit unclaimed funds to state unclaimed property offices.”

However, according to Mr. Miyares’s office, the Commanders failed to remit a single unclaimed security deposit to a state unclaimed property office, including the Virginia Department of the Treasury, until at least 2023.

Mr. Miyares outlined the settlement’s terms that comply with the Virginia Consumer Protection Act to ensure future protections in consumer transactions. The Commanders must refund all remaining security deposits on dormant accounts and reimburse the Virginia Office of the Attorney General $100,000 for its attorneys’ fees and costs, among other actions.

The Commanders previously reached similar settlements with the Attorneys General in Maryland and Washington.

Josh Harris bought the Commanders from Dan Snyder for a record-breaking $6.05 billion in July 2023. These issues with the season ticket holders occurred under Mr. Snyder and the former ownership group.

“We are pleased that this settlement has been reached resolving issues that occurred under prior ownership,” a Commanders’ spokesman said in a statement.

Legal Troubles

It was not the first time the Commanders had encountered legal trouble in the past several years under Mr. Snyder.

In February 2022, NFL commissioner Roger Goodell hired Mary Jo White, former chair of the Securities Exchange Commission and attorney for the Southern District of New York, and her colleagues from Debevoise & Plimpton to conduct an independent investigation into allegations of workplace misconduct and financial improprieties on the part of Mr. Snyder.

Ms. White and her team found evidence that Mr. Snyder sexually harassed former Commander cheerleader Tiffani Johnston. An investigation also found that the Commanders deliberately underreported $11 million in revenue to avoid its revenue-sharing obligations with the rest of the NFL.

Mr. Snyder denied Ms. Johnston’s allegations but was still fined $60 million by the NFL.

“After extensive investigation, we have sustained both Tiffani Johnston’s allegation of sexual harassment by Mr. Snyder and Jason Friedman’s allegation of deliberate underreporting of NFL revenues by the Club to avoid its VTS sharing obligations,” Ms. White wrote in her report.

“We found that the evidence was insufficient to demonstrate Mr. Snyder’s involvement in the calendar photo incident or in the security deposit issues, and was inconclusive as to his personal participation in the Club’s improper shielding of VTS revenues,” the report reads.

“In the course of the Investigation, we also identified a variety of transactions and accounting entries, left unexplained by the Club, which raised a number of issues as to whether a significant portion of the revenues recorded were NFL-related revenues improperly shielded from VTS sharing.”

Due to the allegations and other issues with the league and its owners, Mr. Snyder was forced to sell the team to Mr. Harris and an ownership group that included former NBA star Magic Johnson.

In addition to the legal issues, the Commanders struggled on the field under Mr. Snyder and had just two playoff game victories since he bought the team in 1999.

The team also changed its name from the Redskins to the Commanders in 2020 due to pressure over racial connotations of the former name. Several of the team’s corporate sponsors, including FedEx, PepsiCo, Nike, and Bank of America, helped expedite the name change.