• Loading stock data...
Sunday, April 21, 2024
  • -
  • -
  • -
  • -

Failure of Ted Leonsis’ Virginia Arena Gambit Could be Warning for Other Franchises

  • Pro sports owners are threatening to leave town nationwide if they don’t get public funding.
  • Leonsis tried to move the teams across the Potomac River. Were his peers watching?
Tommy Gilligan-USA TODAY Sports

Last week, Wizards and Capitals owner Ted Leonsis gave his seemingly definitive answer to a question that is being asked in sports markets throughout the country and once, by The Clash

“Should I stay or should I go?”

Leonsis was trying to move the two teams out of the nation’s capital and across the Potomac River to Alexandria, Va. The teams have been in D.C. for 26 years, and the threatened move was met with an uproar on both sides of the river, with loyal D.C. fans aggravated by the potential loss of the teams and Virginians uninterested in subsidizing Leonsis, who is worth billions. 

After months in which a handshake agreement with Virginia Gov. Glenn Youngkin never went beyond that, Leonsis pivoted and re-upped with the city of Washington for a 25-year lease plus $515 million in renovations to Capital One Arena, where both teams play. 

“I think this was a risky deal,” Leonsis tells Front Office Sports Today. “We had reached [an] agreement on a framework of a development, and I hadn’t signed anything. I want to reiterate that it’s highly unusual that you don’t sign anything; you have a handshake.” 

Leonsis is one of several U.S. sports owners who has recently threatened to move his team without public funding for an arena or stadium. Several well-established franchises are discussing moves, with the plans ranging from embryonic to nearly complete. 

On Tuesday, Kansas City, Mo., residents will vote on a sales tax to help pay for renovations to both the Chiefs and Royals stadiums, with no clear indication which way it will go. Both ownership groups have said they could eventually leave town if the tax doesn’t pass. The A’s are trying to leave Oakland with an exit plan that is still held together with bubble gum and paper clips despite MLB owners giving them the green light to relocate. The Bears flirted with the suburbs but said they plan to stay in Chicago, while the White Sox are currently teasing a possible departure after the Rays and Brewers successfully secured public funding.

“This is going to happen again and again,” says Victor Matheson, a sports economist at Holy Cross. “And what’s happening is that whole stadium wave that started in 1992 with Camden yards, all those stadiums that were built in the ’90s and early 2000s and all have 30-year leases, … as soon as the 30-year leases expires, now the teams can make these credible threats.”

Matheson said he thinks sports owners have become overconfident in their plans after seeing the Bills get $850 million from the state of New York for a new Buffalo stadium, and Oklahoma City residents overwhelmingly voted yes for a new $900 million arena for the Thunder. 

“I think a bunch of teams have kind of come at this and said, ‘Oh, this is going to be easy.’ And they kind of gift-tie it so they don’t bring their A game,” Matheson said. “There’s no way that Monumental Sports was bringing their A game. They made unforced error after unforced error just assuming they could have a walk in the park.”

Leonsis praised Washington, D.C., mayor Muriel Bowser in his conversation with FOS, and called her “the hero in all of this.” As long as the deal with Virginia and Youngkin was nonbinding, Bowser could work on an offer, and Leonsis could shop around with other states. Leonsis cited the extra square footage from a bankrupt Washington mall as a critical part of the D.C. deal for him.

Andrew Zimbalist, a sports economist at Smith College who has worked with cities, teams, and leagues on stadium deals said both economists and media “are onto the game” owners play with the supposed economic impact of their projects. One of the Virginia’s Senate’s biggest issues with Leonsis’s plan was they didn’t want to subsidize a billionaire, and that argument has grown louder in recent years across the country. 

“When you put forward your [tax increment financing] district and you outline your intentions for who is going to go where, which retail, which hotel, which commercial building, all that stuff, all that is at the beginning is really a wish list,” Zimbalist says. “You might have some hotel company saying, ‘We’d be interested in exploring that,’ and you might have a concert hall operator saying, ‘Yeah, we’d be interested in exploring that,’ but it’s not committed.”

It’s why, Matheson says, other owners should look at Leonsis’s situation and realize they shouldn’t be as public with their plans if they want to succeed. In many ways, it’s a numbers game. The fewer people owners have to win over, the better. 

“If you want to be successful, do as much behind the scenes as you can,” Matheson said. “If things go to vote, you can’t be sure one way or the other if you’re going to win, but you have a whole lot better chance at winning if you do this all in the smoke-filled back rooms without anyone else around. The majority of the city council is going to be able to fit in the owner’s box. You’re not going to be able to fit the entire voting population in the owner’s box.” 

The Chiefs and Royals could win Tuesday’s vote, but at least there’s a vote.

“The taxpayer is the underdog in every single game going forward because again with the leases expiring basically that hands every sports team basically a 14-point head start in every game,” Matheson says.

“So the taxpayers are huge underdogs everywhere, but as long as these things go to votes, taxpayers probably have fighting chances.”

Editors’ note, Apr. 2 at 9:10 a.m. ET: An earlier version of this story misstated how long the teams have played in Washington, D.C. The teams have been there for 26 years, not 51.

Copy Link
Link Copied
Link Copied

What to Read

Stanley Cup-Keeper Miragh Bitove is Ready to Protect the Hardware

To safeguard what may be the most-recognizable trophy in all of sports, she’s never more than an arm’s length away from the precious metal.

Nike Cuts Over 700 Jobs In Second Phase of Layoffs

“Nike’s always at our best when we’re on the offense,” the company says.

Players Accused of Sexual Misconduct Can Still Compete, Feds Say

New Title IX rules ban suspending accused athletes until a school investigation occurs.

Rockies Coach’s Team Plane Cockpit Visit Triggers Federal Investigation

A since-deleted video shows him sitting in the cockpit mid-flight.
podcast thumbnail mobile
Front Office Sports Today

Why Ian Rapoport Lives for the NFL Draft’s Chaos


Featured Today

Everything You Need To Know About the Legal Attempts To Kill the ACC

Four lawsuits involving the conference, Clemson, and FSU could determine the future.
April 20, 2024

A Bare-Knuckle Fighter Won His Pro Debut. The Far Right Scored a Marketing Win

With Proud Boys sponsoring him, experts say extremist groups will use his success to elevate their ideologies and recruit new believers.
April 7, 2024

Women’s Basketball Finally Has a TV Deal to Match the Excitement. Now What?

A lucrative new media-rights contract could rectify problems of the past, but the future of March Madness media rights is anyone’s guess.
Mar 16, 2024; Washington, D.C., USA; North Carolina State Wolfpack forward DJ Burns Jr. (30) cuts the net after defeating the North Carolina Tar Heels for the ACC Conference Championship at Capital One Arena.
April 6, 2024

How Two College Seniors Helped DJ Burns Cash In on a Final Four Run

Two college seniors are facilitating deals for NC State’s big man.


Powered By

Careers in Sports

Looking for a new job? Check out these featured listings and search for openings all over the world.
Live Nation
Multiple - USA Careers
Multiple - USA Careers
Multiple - USA Careers

To Sum Up Current Commanders, Coyotes Situations: It’s Complicated

The Commanders hire a Capitol Hill insider as the team continues its stadium pursuit.
April 11, 2024

Hello, Goodbye: Coyotes’ Future in Flux As Relocation Rumors Ramp Up

The league reportedly has developed a contingency plan to move the team to Salt Lake City.
April 12, 2024

MLS Finally Gets Its Own Piece of the Big Apple

New York will finally gain a soccer-specific stadium with plans approved for a facility in Queens.

Rapid Returns: How Technology Is Getting You Back to Your Seat

How Oracle’s POS technology is helping fans get back to their seats faster.
April 9, 2024

Coyotes’ Arena Options in Arizona Are Drying Up. Is Relocation Next?

Scottsdale’s mayor cites infrastructure and retail issues with the team’s proposed arena site.
April 9, 2024

Champions League Hosts Ramp Up Security Amid ISIS Threat

Cities are increasing police presence after social media posts.
April 5, 2024

A Wild Week in Stadium News for the Coyotes, A’s, Royals, and Chiefs

Venue-related developments take shape in Phoenix, Sacramento, and Kansas City.
April 4, 2024

A’s Leave Problems Behind in Oakland—But Questions Await in Sacramento

The MLB club will play for at least three seasons at a Triple A ballpark.