Washington Redskins owner Dan Snyder's amusing failure at Six Flags.
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.