Josh Harris’ limited partners bring complexity to Commanders sale

When Josh Harris met the NFL’s finance committee Wednesday, the billionaire did so to discuss his pending purchase of the Washington Commanders. Since signing a deal to buy the franchise for $6.05 billion last month from owner Dan Snyder, the agreement has been under careful review by the league — which flagged several issues that the billionaire and his investment group needed to address. 

Among the league’s concerns is reportedly the unusually large number of limited partners involved in the bid. 

Harris’ deal, according to reports, contains 20 limited partners — a group that includes NBA legend Magic Johnson, Maryland billionaire Mitchell Rales and a slew of other powerful financial backers. And while that still complies with the NFL’s limit of 25 partners max, the structure is vastly different from other teams, many of which are owned by families or billionaires rich enough to own their franchises outright. 

So, with so much focus on limited partners in Harris’ bid, what exactly is their purpose and what role will they have if the Commanders’ sale is ultimately approved by the NFL? 

Marc Ganis, a sports consultant who works closely with many NFL owners, told The Washington Times that the first reason that ownership groups seek to add limited partners is an obvious one: They provide money.

In an era when valuations for sports teams have skyrocketed — $6.05 billion would be a record sales price — finding backers can help absorb the massive costs associated with purchasing a franchise. In the NFL, Ganis says, limited partners contribute to paying off the seller — and rarely anything else. 

In other instances, he said, a “capital call” could perhaps be made in which the limited partners would be required to fund a project like building a new stadium. But that largely doesn’t happen in the NFL because the league “is so strong financially” that it’s not needed, Ganis said. 

From a practical standpoint, however, limited partners often fall in the background to the majority owner — who is the only one to have voting power and would be responsible for running the franchise. Among Harris’ group, that role would belong to Harris — who Forbes reported would own 30% of the franchise, the league’s minimum to be considered a majority owner. 

“The NFL wants the control owner to be heavily involved in league affairs and wants to have a single, deciding person for virtually every aspect of team business,” Ganis said. “You can have a board of advisors. You can have a board of directors. It’s like the old Lincoln cabinet: There are 12 members of the cabinet, but he has 13 votes.

“A smart control owner will solicit the advice and counsel of his limited partners because in virtually all cases they’ve been successful in their businesses. … You want to have those kind of resources available to him or her.” 

That said, the setup of Harris’ group appears to be unusual. Ganis said the Harris’ number of limited partners was “absolutely” unique, adding he could only think of one team with a similar structure: the Pittsburgh Steelers. The Steelers, who coincidentally have Harris as a limited partner, have 20 men listed in their ownership group under owner Art Rooney II — 16 of whom do not have “Rooney” in their last name. (Harris would have to sell his Steelers shares if the Commanders’ deal is finalized.) 

Harris has not publicly said why he has solicited so many limited partners to be involved with the Commanders. But Harris, who according to Forbes has a net worth of $6.3 billion, is already the managing owner of the NBA’s Philadelphia 76ers and NHL’s New Jersey Devils — teams that also have several limited partners. Harris’ background, too, resides in private equity as the billionaire is the co-founder of Apollo Global Management. 

“There are people who prefer to bring in limited partners to keep their own powder dry,” Ganis said. 

As Harris has found out, however, the bigger the group, the longer it can take for the NFL to approve the deal. 

Not only does the league have to thoroughly vet each partner, but Ganis also said the process could be slowed if Harris has to find a replacement if one (or more) partner is rejected. And if the NFL takes issue with the financing of Harris’ group, Ganis said each limited partner would likely have to sign off on any adjustments made, further delaying the approval process. Harris’ group must receive at least 24 of 32 votes from NFL owners to be approved.  

So, if a limited partner has little-to-no power, why get involved? Ultimately, there’s still a prestige that comes with owning a piece of a sports franchise — not to mention the profit it yields, Ganis said. 

For the majority owner, having limited partners can also come with non-financial benefits. In Harris’ case, Ganis said, a former champion like Johnson can provide knowledge and influence athletes. Elsewhere, limited partners with ties to the community — such as Rales — can perhaps help make inroads with local leaders in helping a team land a new stadium.

Last month, Harris confirmed in a statement that there were at least 12 limited partners in his group: Johnson, Rales, David Blitzer, Mark Ein, Lee Ainslie, Eric Holoman, Michael Li, Mitchell Morgan (and family), the Santo Domingo family (led by billionaire Alejandro Santo Domingo), Michael Sapir, Eric Schmidt and Andy Snyder.

“These are outstandingly qualified owners,” Jones said of the Harris group at the NFL owners’ meetings last month. “Having people of this caliber that are involved is worth the wait.”

In certain instances, having limited partners, also referred to as minority owners, can lead to a power struggle. In 2020, Dan Snyder got into a messy legal battle with Fred Smith, Robert Rothman and Dwight Schar — causing Washington’s owner to buy out his (now former) partners for $875 million. In the NBA, Phoenix Suns minority owner Jahm Najafi called for majority owner Robert Sarver to resign amid a workplace misconduct scandal. Sarver eventually sold the team to mortgage broker Mat Ishbia.

Such struggles, however, are rare — especially in the NFL, Ganis said.

“The control owner in the NFL has so much legal authority under the NFL’s constitution and by-laws,” he said.