Ted Leonsis has talked quite a bit about why his organization created the all-digital Monumental Network, and what that will mean for the Wizards’ and Capitals’ TV rights in the future. But that remains among the most important local sports business stories going, and every time he talks he adds a few details.
Thus, here is Leonsis talking about the issue during a recent appearance at the University of Maryland’s Phillip Merrill College of Journalism and the Shirley Povich Center for Sports Journalism. For his thoughts on dealing with official media partners, see here.
“When you look at the media horizon today, it’s very counter-intuitive what happened, and it’s a reason that I encourage young people to internalize: no one knows nothing,” Leonsis said. “Much of what is conventional collective wisdom is always proved incorrect. So 10 years ago, nobody would have said the only content that is proven that it can build an audience and that people will pay for on television is sports programming. It’s not news, it’s not original content — it’s sports programming. That the most powerful and successful and valuable network won’t be CNN, won’t be NBC; it will be ESPN. That sports programming itself will be incredible valued.
“And so here people thought I bought a hockey team, and then a basketball team,” he continued. “[They thought] ‘That’s not that cool, that’s not that important.’ … We licensed our content, our programming, to a cable partner, Comcast SportsNet. They’re fantastic people and they’re a great company. But all Comcast SportsNet does is take our programming and sell it to cable partners. They sell it to Comcast Cable, and Cox Cable, and Verizon FiOS and DirecTV. So they arbitrage; they’re a middle man for my content.
“And as time has gone on, what they get paid by their cable affiliates is much more than they pay me,” Leonsis said. “And so as time goes on and we burn off our rights, it’s incumbent on us that we should have our own network. So we launched Monumental Network to get in the business, and we’ve hired 25 young people. … Let’s come at this from a digital standpoint, with young people, and they’ll do digital video. We can win Emmy awards. We have. Our programming is fantastic. We can produce with these young people socially shared media, and we’ll get ready for when our rights come up.
“And then once we re-claim our rights, then we would go to Comcast and Verizon and DirecTV, and say there is no Comcast SportsNet, you deal with Monumental Network. And we have all this programming and news and more, plus you watch Caps games, and then you’ll watch Wizards games and Mystics games. And we’ll build a lot of value into our network, and then we’ll be a fully developed regional sports and entertainment [company]. We’ll own the building, which is really an eCommerce platform. We’ll own the teams, where we get reoccurring revenues, like a software company. We’ll have eCommerce sales; people buy hats and jerseys and food and the like. We’ll have content that’s valued very very highly. You have to trust me that what Comcast and the cable guys pay Comcast SportsNet is a lot more than Comcast SportsNet pays us. And then if we had more revenues, then we contribute half of that to the players, the salary cap would go up, we’d be able to bring in more players. We’re dis-intermediating more traditional media, and I’ve been very open and transparent in what we’re doing.”