Snyder's New Goal: Raising $750 Million
Redskins Owner Seeks New Business Ventures
By Thomas Heath
Washington Post Staff Writer
Monday, January 15, 2007; D01
Washington Redskins owner Daniel Snyder has formed a limited private partnership that seeks to raise $750 million, which Snyder intends to use to fund new business ventures.
Snyder's Red Zone Capital Partners II so far has $126 million in commitments from seven investors around the country, according to a filing with the Securities and Exchange Commission.
Incorporated last July, Red Zone lists two partners: Snyder and Dwight C. Schar, chairman of Reston-based NVR, one of the nation's biggest home builders. Schar is one of Snyder's investors in the Redskins.
According to the securities documents, the fund has offices at 1800 Tysons Blvd. and intends to sell its shares to raise "investment capital." The fund lists $2 million in organizational expenses and does not identify the investors. The filing says the partnership is selling shares in $10 million increments, although the partners may elect to accept lesser amounts.
A Snyder spokesman said the partnership is a continuation of Snyder's previous investment funds, some also named Red Zone. The earlier funds were created to help the Redskins owner and his close associates acquire businesses such as a radio station and the Six Flags chain of amusement parks.
The goal to raise $750 million appears to be Snyder's most ambitious effort since he led a group of investors who bought the Redskins for the then-record price of $800 million in 1999.
"It's a private investment fund, a vehicle for investing," Karl Swanson, a Snyder spokesman, said. "We have an office and a staff who are dedicated to that. Dan and Dwight are the managing partners."
Schar referred questions to Swanson.
Sources in the Washington business community, who spoke on condition of anonymity because they are aware of confidential information, said Snyder has been meeting with potential investors to solicit money for the new fund and explain his investment ideas. The sources said Snyder has shown interest in a restaurant chain but were not specific. One of Snyder's directors at Six Flags, Mark Jennings, sits on the board of Johnny Rockets, a national hamburger chain.
Private equity has taken off in recent years as private and institutional investors look for ways other than the stock and bond markets to earn outsize returns. Washington is home to several private-equity firms, including the Carlyle Group and Thayer Capital Partners.
Snyder made his first fortune as founder and chairman of Snyder Communications, a marketing company he sold to Havas Advertising in September 2000 for $2.3 billion. He retired last year as chairman of Ventiv Health, a health-care marketing company spun off from Snyder Communications.
Last summer, Snyder, Schar and Six Flags chief executive Mark Shapiro, working under a partnership called First and Goal, cut a two-year deal with Tom Cruise's production company to pay $3 million to $10 million annually for development and overhead costs for the opportunity to finance film projects and to profit from any hit movies.
Snyder also owns five radio stations, which broadcast Redskins games. Under his ownership, the team has become one of the world's most valuable sports franchises.
Six Flags has been a more difficult road. Another of Snyder's partnerships, Red Zone Capital, holds 12 percent of Six Flags stock. Snyder became chairman of Six Flags following a proxy fight in 2005, after which he threw out the old board, installed his own directors and picked former ESPN executive Shapiro to run Six Flags as chief executive.
Attendance dropped slightly during 2006, as the company reshaped its image to be more family-oriented and as theme parks nationwide felt the effects of poor weather and high gasoline prices.
Moody's Investors Service last year downgraded Six Flags' corporate rating, saying its management strategy will require more spending and must challenge the company's weak financial position. To reduce the company's $2 billion debt, Shapiro last week announced the sale of seven of its 28 parks for $312 million.
While Six Flags stock has risen from around $4 per share before Snyder took over to around $12 nearly a year ago, the stock has since settled lower. It closed at $6.21 on Friday.
Staff researcher Richard Drezen contributed to this report.
http://www.washingtonpost.com/wp-dyn/co ... 00721.html
