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One of the biggest stories of the year so far in the business of sports is the dramatic reversal by Monumental Sports & Entertainment chair Ted Leonsis (above, right), who’s abandoning his planned $2 billion arena and mixed-used development in Virginia to remain in D.C. and at Capital One Arena.
Leonsis joined the Front Office Sports Today podcast and broke down not only how the venue turnabout happened, but also what he sees happening across regional sports media, his own baseball ownership aspirations, and the advance of sovereign wealth funds in pro sports.
Among the highlights of the interview with Leonsis:
- Washington persistence: He called D.C. mayor Muriel Bowser (above, left) “the hero of the story” in MSE and credited her continued efforts to strike an arena deal, even after the announced plans to move to Virginia. “She could have been mad at us and not talked to us. … She overcame, in an integrated way, all of our objections, and so it just felt natural to get there” on a deal.
- A change in Virginia: A material event in the pursuit of the Alexandria project, of course, was the firm resistance mounted by influential state Sen. L. Louise Lucas. But Leonsis said the problem was even broader, as the discussion surrounding the proposal there quickly veered away from team operations. “As soon as this pivoted from business and started to become all about politics, it started to scare us. We’re not politicians.”
- Big plans for the arena: Leonsis plans dramatic changes to Capital One Arena in the forthcoming renovation, with regard to both back-of-house components and fan-facing ones. But some elements will be even more straightforward, such as an improvement in bathrooms. “[Clippers owner] Steve Ballmer has made an arms race in plumbing, and it’s serious. I asked people, ‘What did they want?’ and they wanted [shelves over] urinals, better toilets, and we have to make investments in that.”
- Surviving RSN disruption: MSE purchased the former NBC Sports Washington and rebranded it the Monumental Sports Network. And following a series of improvements to that operation and the creation of a direct-to-consumer offering, Leonsis believes the regional sports network will be an outlier in a broader decline of that part of sports media. “The growth in media sales and sponsorships is offsetting somewhat the meltdown in the deals with the cable guys.”
- Plans in baseball: Leonsis has previously been linked to a potential purchase of the Nationals. That team is no longer on the market, but he maintains close ties with the Lerner family that owns the MLB club and is a minority partner in MSE. “They know our intentions, and at some point, we’ll reengage.”
- New ownership trends: MSE’s much-debated deal to introduce a Qatari state fund in its ownership group is emblematic of a rising need, Leonsis says, to access additional capital to keep up with rising team valuations but have that additional investment remain passive and oriented to the long term, and he predicts many more such deals to come across the industry. “Pension funds and sovereign wealth funds are the best source of capital for investments of that kind.”
🎧 Listen to the full episode here and subscribe on Apple, Google, and Spotify.
