Since Dan Snyder bought the Washington Redskins in 1999, the team has had just two playoff wins. While tanking on the field, the franchise has only increased in value—according to Forbes, the Redskins are worth $1.6 billion, the second most of any NFL franchise. This might lead you to believe that Snyder is, if not a football genius, at least a capable businessman. When you look at his stint as chairman of Six Flags, however, it's hard to find much support for the Snyder-as-business-genius theory.
Snyder was removed as chairman of the theme park chain's board of directors late last week as part of a settlement in Delaware bankruptcy court. Six Flags went Chapter 11 last June after about four years under Snyder. And if there's a fall guy in this red run, it's most definitely Snyder: The just-approved Six Flags reorganization plan calls for most of the chain's management to stay put. But Snyder's gone.
The Redskins owner gained control of Six Flags by leading a stockholder coup. In October 2005, he addressed a letter, along with former ESPN executive Mark Shapiro and Redskins co-owner Dwight Schar, to "Fellow Stockholder[s]." That letter, filed with the Securities and Exchange Commission, blasted the abilities of then-reigning board Chairman Kieran Burke and declared that folks would have "done better by hiding their money under a mattress" than investing in Six Flags under Burke. Snyder bragged that he, the owner of the "the most valuable [team] in U.S. sports," would make everybody richer. That pitch fired up the base enough to get Burke ousted and Snyder put in charge. As Snyder was putting his plan in place, and adding big names like Jack Kemp and Harvey Weinstein to his board of directors, Six Flags stock sold for $11.93 a share. Snyder controlled 10,921,300 shares at the time, according to SEC filings, making his Six Flags holdings worth more than $130 million.
But then the coaster started rolling downhill. As of last week's settlement, those shares are essentially worthless—SIXFQ was trading at 1.7 cents this morning, and it's trending toward zero.
Snyder's run atop Six Flags was a debacle from the start. His shtick was much the same as he'd used with the Redskins, where he put a price tag on anything without one (charging admission to training camp) or added a bigger number to everything with one (quadrupling parking fees in a decade). While his NFL squad's bottom line only got blacker, Snyder's schemes didn't play so well at the playgrounds.
Just as he'd done at FedEx Field (which was called Jack Kent Cooke Stadium before Snyder sold the naming rights for $7.6 million per year through 2025), Snyder inflated the parking rates at Six Flags lots all over the country. The inflation was a boon to owners of retail and storage businesses near Six Flags New England in Agawam, Mass., which began offering spots on their property for $10—the rate charged by Six Flags before Snyder jacked the cost of parking to as high as $30. In 2007, Snyder sent Shapiro, his handpicked CEO, to lobby the Agawam mayor and the town council into banning visitors from parking at the non-Six Flags-owned lots. Shapiro testified at a public hearing that it was unsafe for pedestrians to walk to Six Flags from anywhere but its own lots. The local politicians banned the satellite lots after Shapiro's appearance.
But then Michael Palazzi, who had been making money off Six Flags' park-and-walk customers as owner of South Agawam Storage, informed the council that Snyder had concocted an identically phony argument to prevent pedestrian traffic to FedEx Field. (Full disclosure: Palazzi learned about Snyder's FedEx Field ban from an article I'd written about it for Washington City Paper.) The stadium ban was tossed out in 2004 when a Prince George's County, Md., judge ruled that Redskins management had invented the safety issue to force ticketholders to pay Snyder's tops-in-the-league parking fees. When Palazzi pointed out that there hadn't been a single safety problem related to the satellite lots in Agawam, the town council quickly repealed the ban by unanimous vote. Palazzi then went on to manage the political campaign of substitute teacher Susan Dawson, who used the Six Flags parking issue to unseat four-term incumbent Agawam Mayor Richard Cohen in November 2007. "We fought a multibillion-dollar corporation and the corruption in this town, and we won," Palazzi said after the election. "Good triumphed."
Snyder, too, has a rapacious desire to profit off of people's time. Since buying the Redskins, he has boasted of a massive waiting list for season tickets—by April 2008, he was claiming this list had "over 200,000" names. Snyder used the alleged list to extort wannabe ticket buyers into paying big fees to move to the front of the line. He called the Redskins' line-jumping plans the "Tailgate Club" and "Touchdown Club." In 2005, membership in these clubs cost up to $7,500, an outlay that allowed the purchase of one general-admission season ticket.
There was another fee if you wanted to bypass the huge lines at FedEx Field on game days—lines created by Snyder's security searching everybody for contraband (such as their own food or T-shirts dubbing the owner and his ex-personnel man Vinny Cerrato as "dumb" and "dumber"). All you had to do was buy a "Fast Lane" card, which gave you the right to enter the stadium without a wait—for $100 per season. Meanwhile, over at Six Flags, Snyder hyped the "Flash Pass," which for as much as $112 per person per day (not including park admission price) will let you skip the line and jump on your favorite rollercoaster—and stay in your seat to ride it again!
And then there were the questionable business practices. Forget the 2002 agreement Snyder made with Diageo, the world's biggest spirits producer. That deal put billboards for Diageo's products in FedEx Field, thereby violating the, um, spirit of the broadcast TV networks' longstanding voluntary agreement not to run advertisements for hard liquor. And forget the allegations of tampering in the Redskins' signing of Albert Haynesworth to a complex, multiyear, nine-figure contract just five hours after the free agency period began. If you want to hear about Snyder and shady deals, talk to Lance Laifer.
Laifer, who heads up a hedge fund called Resilient Capital Management, made the mistake of putting money into Six Flags while Snyder was in charge. During the Six Flags bankruptcy case, Laifer asked the Delaware court to remove any decision-making power from the company's board of directors and management team, alleging in his motion that Snyder had "treated Six Flags as a marketing catapult" for his other investments. Laifer's evidence: Red Zone, a private investment firm Snyder founded and runs, had two major deals with Six Flags, the public company Snyder ran until last week. One was a promotional and franchising pact with the Snyder-owned Johnny Rockets that gave his eateries prime exposure in the parks plus 5 percent of everything sold at the Six Flags-based burger joints. The other was the $175 million purchase of Dick Clark Productions by Red Zone in 2007. That's a lot of money for a company whose heaviest hitters are the TV programs So You Think You Can Dance and Dick Clark's New Year's Rockin' Eve. Nevertheless, Red Zone turned around and sold a 40 percent share of Dick Clark Productions to Six Flags.
In other words, in negotiating terms of the Red Zone-to-Six Flags sale, Snyder went toe to toe with ... himself. That's the same trick Snyder pulled with the Johnny Rockets pact. And it shows, says Laifer. "If you walk into Six Flags Great Adventure now, you will walk right into a Johnny Rockets," Laifer said last week, after the Delaware court approved the reorganization plan, costing Snyder his seat atop the board and rendering Laifer's Six Flags investment (which in the filing was said to be worth "more than $29 million") utterly worthless.
So even as he ran a public company into the ground, Snyder managed to keep money flowing into his wallet via pacts with private businesses he controlled. That makes Snyder a personal-interest savant, but not a business genius. His Redskins investment still seems sound, but even George Papandreou could keep an NFL franchise in the black. Snyder didn't have what it takes to make a buck at Six Flags; like every Six Flags shareholder, his stock is now worth pretty much nothing.
Perhaps Snyder's legacy as Six Flags chairman will be the sponsorship deal he cut in June 2009 with Anatomic Global, a bedding firm based in Corona, Calif. Just two weeks after Six Flags declared bankruptcy, Snyder announced that Anatomic Global was henceforth the "official mattress" of the company. Six Flags even began offering the mattresses for sale at its parks for $1,299 in queen size. It was almost as if Snyder, remorseful about his brash takeover of Six Flags and the disastrous returns he provided to anybody who invested in the company, was offering his shareholders a better place to put their money.