The Screwing of the Average Fan: Edward Bennett Williams and the Washington Redskins
Nocera, Joseph
The Screwing of the Average Fan: Edward Bennett Williams and the Washington Redskins by Joseph Nocera It was September 1964, and Washington’s best-known criminal lawyer, Edward Bennett...
...One possible explanation for the coverage may be the attitude of sportswriters here toward the two men...
...In fact, the only real difference between buying the shares themselves and having their company do it for them is this: they are not spending any of their own money...
...Thus, where there were once 1,000 shares of outstanding stock in the Redskins, there are now only 350...
...That the implications of what Willi,ams, Cooke, and King did will never make the daily papers is a sad commentary on the people who write about sports in this city...
...Big names like Walter Pincus and Carl Bernstein have written stories about the will fight between the conservators and the children...
...Through the years, the number of people owning stock in the Redskins has dwindled to the point where Williams now has only one remaining partner in Pro Football, Inc...
...each received $750,000 in a lump sum, $10,000 annually, and four season tickets to Redskins games...
...This is supposed to be a good newspaper town, full of tough, hard-nosed reporters, sharpened by stiff competition, at the top of their profession...
...What has happened to Williams and the Redskins since then is quite remarkable...
...In its most significant purchases of stock, in 1972, Pro Football, Inc., bought and promptly retired 260 shares in the Redskins held by the estate of George Preston Marshall...
...It’s a safe bet that all this free and favorable publicity hasn’t exactly hurt his law practice...
...They didn’t have very much cash...
...Marshall (who by now was confined to a wheelchair and could not speak) had assented to the new will, they claimed...
...Running the football team, feuding with coach George Allen, speculating on the team’s prospects in the coming yearthat’s what gives Williams a high profile in this city...
...He has all the earthly goods a man could desire: a comfortable home, an attractive wife and seven children to fill the house with laughter and happiness...
...What Williams et...
...Needless to say, this new document would turn the entire estate over to the two children...
...This is not the sort of thing you or I could do...
...Maybe that’s because his law firm is the counsel for the Post, a rather remarkable fact considering how big a newsmaker Williams is in the city...
...So why isn’t anyone mad...
...And shortly before he died in 1976, Redskin board member Milton King admitted something Williams never has: “People wonder why the Redskins cry poverty with all seven home games sold out and people waiting in line for tickets,” he said...
...One person who knows about some of the transactions said that the team “had to go to the banks...
...But he had a soft spot in his heart for Williams...
...He has been on the football team’s board of directors since 1963 and its president since 1965...
...Another explanation is that the Redskins do have the highest salary scale in the league and they have spent enormous amounts of money turning a perennial loser into a first-class team...
...The stock Williams was referring to was his 50 shares-at the time, representing five per cent-of Pro Football, Inc., a Maryland company that owns a Washington institution, the Redskins football team...
...For Williams, a man with a flourishing and lucrative law practice, there are other advantages too...
...The real reason for the losses, he sputtered to a Washington Star reporter, was the $600,000 in debtservice being paid annually on the Redskins bank loans...
...If we wanted to buy stock in a company, we would have to do it ourselves, with our own money...
...Sports Illustrated, for example, said in 1975 that they “are estimated to cost the Redskins almost $ 1 million a year in interest...
...Williams later bought an additional 12 shares from King for an undisclosed amount...
...He was assisted in rhe research for this article by Michael Murphv and Janet Marinelli...
...Everyone, the fans and the sportswriters, likes a winner, and Williams has given this city a team in which they take considerable pride...
...If the loan were repayed over 30 years, it would be $604,000 per year...
...Or to ride in the team limousine...
...He has handled the big cases, the highly publicized trials of people like Jimmy Hoffa, Bobby Baker, John Connally, and Richard Helms...
...But while the exact nature of the loans and their repayment schedules is a tightly held secret among Redskins brass, enough has come out to make one fact of Redskins finance quite obvious: it has been the loans, far more than the free-spending coaches or the high salaries, that have caused the Redskins to lose money in recent years...
...Williams now has neartotal control of the Redskins...
...He is Jack Kent Cooke, the Los Angeles sports mogul, owner of the Los Angeles basketball and hockey teams as well as the arena in which they play their home games...
...We owe the banks a lot of money...
...King and Williams stepped down as trustees, citing “the best interests” of the Marshall estate...
...Today, most of that money is still owed to the bank...
...He also says, “There has not been, to my knowledge, a major franchise sold for less than what was paid for it...
...The children, Catherine Price and George Marshall, Jr., charged that it was unethical to have minority stockholders and Redskin directors as conservators to the estate and named as trustees in the will...
...Two years later, the company bought and retired the remaining 260 shares from the estate...
...Marshall was an erratic and unpredictable man, an acknowledged racist (to him, NAACP was supposed to have meant Never at Anytime Any Colored Players), and a man who had practically disowned his two children when his wife divorced him years before...
...Williams Joseph Nocera is an editor of The Washington Monthly...
...But the NFL has apparently agreed to look the other way in this case, so long as Cooke keeps a low profile and Williams runs the team...
...But it’s hard to deny: if you take away those loans the Redskins would have made a profit the last three years, despite Allen’s supposedly spend-thrift ways...
...But the children had a new will, a potent weapon no matter how they had obtained it...
...And most importantly, owning the Redskins insures Williams a ton of favorable publicity...
...But he can’t be content...
...Yes, on a few occasions, the President of the United States...
...But in the process, he has also succeeded in making himself a rich man...
...And thus, it has been the loans, paid for by the team to enrich its stockholders, that are the underlying reason for the ticket price increases in the past few years...
...A Tightly Held Secret The Redskins have the highest average ticket price in the National Football League, $12.65...
...Ironically, in 1972, after Williams and the other stockholders had insured that they would keep control of the team, they agreed on that point...
...In the Star, the big-and apparently onlyconcern at the time was how the National Football League would handle Cooke if the 1974 deal was made...
...buy the stock has been the same as if Williams, Cooke, and King had bought the stock themselves-the value of their own shares has increased in direct proportion to the number of shares bought back and retired by the company...
...On one level, a good case can be made that a sports franchise is not just another business but something a little bit more, requiring an abiding integrity, even a touch of nobility on the part of sports owners...
...But as directors of the business, they then proceed to have the business buy away all his stock...
...But if F.A.N.S...
...Total cost to Pro Football, Inc.: $8.8 million...
...The Screwing of the Average Fan: Edward Bennett Williams and the Washington Redskins by Joseph Nocera It was September 1964, and Washington’s best-known criminal lawyer, Edward Bennett Williams, was talking to a reporter about some stock he had recently purchased...
...The Number Game If you read this story closely, you...
...We would not be able to let the company do it for us...
...This is the most highly speculative investment you could possibly make,” he said...
...But in this case, the wheeling and dealing is such that the facts alone are 7 enough...
...Not until he gives Washington a winner...
...The facts, such as they are, have been in the papers periodically...
...Simply put, the Redskins ticketholders have been buying the team for its two stockholders...
...When you invest in a pro club, all you’re getting is a franchise...
...Since they already had quietly retired the small amount of stock outside the Marshall estate (including 50 shares held by the late coach Vince Lombardi at the time of his death in 1970), there was now no stock left in the company that was not in their possession...
...Also in the settlement, placed under seal by the court, was another provision that guaranteed that the three minority stockholders could never lose control of the Redskins unless they wanted to...
...There is an NFL by-law that forbids a majority stockholder in a football team to own a team in another sport...
...Just about every sports reporter in town knows what happened...
...For Williams, the situation was even odder-he, after all, was still paying Marshall for his shares of stock...
...His story was mostly concerned with Allen’s contract, the big jump in the team’s payroll, and the cost of things like film, phones, and training camp, but it also mentioned that the Redskins paid about $840,000 in interest in that year...
...That investment was worth its weight in gold just for the ink it gets Williams,”says one Washington sports r’ epHoerrtee’rs...
...On July 2, 1966, the dispute became downright ugly...
...Marshall trusted Williams, so he allowed the lawyer to buy the stock on credit for a reported $58,000, made him a member of the board of directors, and by 1963 had named Williams in his will as one of the trustees of his estate...
...skin stock...
...Or The Washington Post, just this April, in a story about how he fired George Allen: “[Williams] had built a reputation in the legal and political circles of Washington and the nation as an honorable, ethical man...
...If you took away the loans, however, Edward Bennett Williams would not stand to make a capital gain on his investment somewhere on the order of 2,000 per cent...
...When Marshall’s health began to deteriorate badly late in 1963, King, Williams, and a third minority stockholder got Marshall to agree to let them be conservators-that is, guardiansof his estate...
...He first bought stock in the Redskins in 1962-38 shares-from George Preston Marshall, Sr., the cantankerous owner who ran the club with an iron fist...
...By comparison Williams was a good guy...
...Everyone Likes A Winner ~~ Whatever the case, the Post has steered clear of ever spelling out to the fans how they are helping make Edward Bennett Williams a rich man, although it has hammered away at such Allen “extravagances” as his long distance phone calling and has found petty ways to criticize him almost daily during his years in Washington...
...Willianis.Cooke, and King waited to Edi urd Bennett Williani\ (third from lrft) entorturning in hi3 private hou at a RedtXint game...
...Naturally, to hear Williams tell it, the problem has been the spiraling costs of fielding a winning football team these days...
...We need to know when we are being had, even at the ballgame...
...And in the old days, before he fired coach George Allen, Williams had a standard and oft-told joke: “I gave Allen an unlimited budget,” Williams would say, “and he exceeded it...
...More recently George Allen, the deposed coach, flew into a fit of rage after being blamed by Williams for spendingso much that the team lost money...
...have done is not illegal, but surely it is scandalous...
...There are no tangible assets to speak of...
...Owing the Bankers a Bundle Whichever figures are right, it is clear that the Redskins owe the banks a bundle...
...Jack Kent Cooke, in that disarmingly honest letter to prospectve buyers, said that owning the Redskins was “a prestige r o l e . . . the most notable figures in Washington, from the former Chief Justice to the present Secretary of State [Henry Kissinger] have been guests at RFK Stadium...
...If a.politician had done something like this, he would have been in the headlines for weeks (although to be fair, it is not uncommon for conservators to have a close working relationship with the person whose intrests they are protecting...
...It doesn’t cost them a penny, but, when the time comes for them to sell their own stock, the deal will make them quite rich...
...The effect of having Pro Football, Inc...
...And those “highly speculative” 50 shares now constitutes almost 15 per cent of the outstanding shares in the company...
...And he had a psychiatrist evaluate Marshall’s mental health-“incompetent,” said the report...
...But in Washington, all of that takes a back seat to Williams’ role as president of the Redskins...
...When there was only one solid offer, for $5.2 million, they moved in with a better offer, $5.8 million, on behalf of Pro Football, Inc...
...I like Williams, myself,” Israel added...
...see who would buy the stock...
...It was an odd arrangement: in essence three minority stockholders who were also directors of the team were in charge of looking out for the best interests of the majority stockholder...
...A $6.8 million loan, at eight-percent interest (the prime lending rate in 1974) would be repayed at $692,000 a year over 20 years time...
...A High Profile Edward Bennett Williams has made a national reputation by defending big names in criminal trials...
...Williams also saw to it that both children’s visiting rights to their father were severely restricted...
...But the company did not have that kind of money on hand, so the purchases had to be financed through a series of bank loans...
...The people who negotiated those loans or know the details won’t talk about them...
...But from time to time there have been published reports hinting at their size...
...With 350 shares, they owned the whole team, and at a fraction of the cost., So there it is, in at least a bit of its colorful detail: the story of how Edward Bennett Williams-vaunted man of integrity, one of the best trial lawyers in the country, respected if not loved by those who know him-fleeced the Redskins fans...
...Williams was like the perfect son to Marshall, the type of son he always wanted,” according to one report...
...After gaining firm control of the business (with the right to purchase stock before anyone else) they graciously step down as trustees to the estate of the majority stockholder...
...the Redskins are a very privately owned company...
...has never said how much those shares cost him back in the early 1960s, but it is believed to have been between $60,000 and $100,000...
...But aside from that, there are e no ugh “ p o t e n t ia 1” co n fl ic t s- ofinterest (one of those great catch-all phrases in reporting), that reporters should be clamoring to write this story...
...But this story hasn’t seen that kind of reporting and probably won’t...
...On that day, with King and Williams out of town (the third conservator had since died), the two children entered Marshall’s home with two “witnesses” and came out a few minutes later with what they claimed was a new will...
...Or maybe it’s because he’s such a close friend of Ben Bradlee-so much so that he stayed at Bradlee’s house the night he fired Allen because he didn’t want to talk to any reporters...
...The high ticket prices notwithstanding, the Redskins have lost money in recent years: $500,000 in 1975 and 1976 and $750,000 in 1977, according to Williams...
...He may not be making the profits now, but that stock is a far more valuable asset...
...To do this, he has had to give up immediate income, by way of profits, that he might have otherwise made...
...The Washington Star, circa 1971: “Williams is a perfectionist willing to give 100 per cent of himself to achieve the goal [of winning...
...Off the club went to the bank for $2 million to supplement $ I million the team would use to finance the settlement...
...Even a little simple arithmetic shows the potential bite repayment could put into the Redskins budget...
...The Marshall children were also infuriated that the courts were allowing the conservators to pay their own legal fees out of the Marshall estate but had refused a similar request from the other side...
...It is quite another for a wheeler-dealer to mismanage sports franchises that are really a public trust for the people who spend their money and their emotions . to support those franchises...
...This is the price the fans must bear for a good team, he concludes somberly...
...Pro Football, Inc., as it would do again in 1974, was picking up the tab for Williams, Cooke, and King...
...Thus, as conservator, he was in the unique position of collecting money from himself...
...To pap for this the Marshall estate sold 260 shares of the Redskins-half of what it ownedback to the club for $3 million...
...After years of more legal wrangling, it was obvious just how potent: in January 1972, three years after Marshall’s death, the case was settled out of court...
...By all accounts it was a nasty affair...
...Cooke, in fact, once wrote prospective buyers for his Redskins stock that the team was “a tax shelter, possibly better than any in America...
...Over the next six years, until Marshall died a sick and senile man in 1969, the three conservators slugged it out with the two Marshall childrenwho had been cut out of the will completely-for control of the team...
...Cooke bought 250 shares in the Washington Redskins in the early 1960s for $350,000...
...What Williams doesn’t mention in that litany is the loans taken out and the stock payments made by the Redskins...
...I t wasa fortuitous move, for two years later the new trustees of the estate did indeed decide it was time to sell the remaining shares...
...Today they constitute 72 per cent of the Redskins and are worth in the neighborhood of $20 million...
...Nothing of the kind...
...Catherine Price and Georgc Marshall Jr...
...It impresses clients and potential clients to watch the football game from the private booth of the team’s owner...
...He demanded that the new will be turned over to the conservators and had young Marshall held in contempt of court and actually jailed for a short time for refusing to do so...
...At the Post, the reporting was even worse, but then the Post has been good to Williams in recent years...
...He attempted to cut off support payments for Price’s son, who was in a New York mental hospital...
...Oh how anguished Williams becomes when it’s time to boost ticket prices...
...Which brings us, finally, to F.A.N.S., Ralph Nader’s new sports outfit...
...It is rather unlikely that Edward Bennett Williams stays awake nights worrying about national mobilization...
...But a look through the clips for stories on these stock transactions shows no outraged columns nor angry analysis...
...Gaining Control It is, all in all, a lovely spot for a prominent Washington lawyer to be in, and the fact that Williams is there is no accident...
...No, what’s really startling here is not the amount of money Williams and Cooke stand to make (though that is admittedly striking), but rather the way in which they are going to make it...
...Dave Anderson, writing in the Times recently, put it this way: “It is one thing for a wheelerdealer to mismanage a private firm...
...The three stockholders would continue to control the club under the agreed-to terms, and Williams would stay on as president of the team, as he had since 1965...
...And the details of the stock transaction are no big secret in Washington...
...Buying Back the Stock As members of the board of directors of Pro Football, Inc., Williams, Cooke, and a third director, the late Milton King, have arranged for the team to buy back its own stock as it has become available...
...can impress upon fans the way profits are made and deals are struck, if it can show Redskin fans how they’ve been enriching Edward Bennett Williams and Jack Kent Cooke, and if it can nudge our sports pages in the right direction, it will be performing a valuable function...
...It’s no big secret, of course, that owners of sports franchises can make a lot of money, although they would have you believe they are going broke...
...Any move they make on behalf of the majority stockholder affects them directly, since they are minority stockholders and members of the board of directors of the business...
...David Israel, formerly of the Washington Star and now with the Chicqyo Tribune, is not atypical when he says, “You’ve got to remember that Allen was just a horrible person to deal with when he was here...
...He and Cooke and . King took the Redskins rooters straight to the cleaners...
...Obviously, that’s not the sort of thing Williams wants to talk about when he raises ticket prices...
...Williams was outraged...
...Their highestpriced ticket is $20, a figure matched only by the Philadelphia Eagles...
...Moreover, if anything came along to cause a cessation of sports, such as national mobilization, the investment would be nil...
...The stadium is too small, he says, the payroll too high (the highest in professional football, it is said...
...What he has really done,” says former law partner and current Secretary of Health, Education, and Welfare Joseph Califano, “is make the practice of criminal law respectable...
...Look at them yourself: Several men, one of them an import a n t and prominent lawyer, gain control of a business by putting themselves in charge of the interests of the majority stockholder...
...It has gotten off to a rocky start, with bad press and some mixed-up priorities (who the hell cares if people paying $100 per seat don’t get as good an insight into a boxing match as those watching television...
...A conservative figure for its value, given the asking price for football teams these days, is about $4 million...
...A Washington Post reporter came up with a team balance sheet a few years ago showing that the Redskins lost $340,000 in 1975...
...Just four years ago, these shares represented a minority interest in the team...
...That provision gave the stockholders the first right to buy any stock in the Marshall estate put up forsale in the future...
...That’s his dirty little secret...
Vol. 10 • June 1978 • No. 4
