By Les Carpenter
Washington Post Staff Writer
Wednesday, April 28, 2010; A01
As he sat behind a giant curtain the day he bought the Washington Capitals in 1999, Ted Leonsis was already wealthy in the ways successful men measure such things. He had houses and cars, a wife and two children. His net worth was estimated at $1 billion. And as he waited on stage at what was then called MCI Center for the official announcement, it hardly seemed important to him that he was buying a hockey team.
Until Jonathan Ledecky, his partner in the deal, turned to him and said: "Are you ready for your life to change?"
Then the curtain parted, and suddenly Leonsis stared into a wall of flashbulbs without a speech or notes or an idea of what to say at the biggest news conference he had ever seen.
"It's a small business," Leonsis says now of the team he bought for $85 million. "Small revenue, but with a disproportionately big impact on a community."
This is a hard lesson for most new pro sports franchise owners to learn. Very often they are titans of industry as successful as Leonsis was at America Online, where he was the president of interactive properties, and then they buy sports teams that turn out to be civic trusts and come with very passionate fans. And yet through 11 years, Leonsis has come to be seen as one of the better owners in sports -- a man who learned to squelch his impulsiveness, control his combativeness and ultimately build a team through the proper mix of smart draft picks and savvy trades.
On Tuesday, Leonsis moved a step closer to getting the chance to apply these lessons on another Washington sports franchise. The family of Abe Pollin announced it had reached a deal to sell Leonsis -- the Pollins' minority partner the past 11 years -- the family's share in the Washington Wizards and Verizon Center, capping a negotiation that began with Pollin's death last November. It will put Leonsis atop a sports empire that could approach that of Redskins owner Daniel Snyder's enterprise in terms of power and size.
Although details were not released, the statement from Pollin's two sons, Robert and James, made clear the deal -- estimated at $550 million -- was done, and that a formal handover will soon follow. "We join our mother Irene, the sole principal owner of the franchise today, in congratulating Ted Leonsis and his Lincoln Holdings partners on reaching this near-final step in a long negotiation," they said. "All three of us look forward to them enjoying many years of success on the court and in the community with this wonderful franchise."
The announcement came as the Capitals prepared for a deciding Game 7 at Verizon Center on Wednesday night in their first-round playoff series against the Montreal Canadiens. After leading the series three games to one, the Capitals -- who just finished the best regular season in franchise history -- have lost the last two games, bringing the team to the brink of a monumental collapse that prompted cries of anguish and despair from fans on Internet message boards.
Leonsis responded on his blog, Ted's Take, with characteristic equanimity.
"So it all comes down to this," he wrote. "Can we play well and rise to the moment? Can we just focus on the game at hand in front of our home crowd? No talk of pressure. No talk of frustration. Just time to perform. One game. Series and season on the line.
"I believe we are up for it. See you all tomorrow night and thank you for your support. We need it. Good karma. Good vibes. Go Caps."
Owning a hockey team has given Leonsis something he never had in the business world: Fame. It has allowed him a daily blog, an e-mail address to which fans write him constantly and a peculiar identity as the face of a hockey team that happens to have the game's best player, Alex Ovechkin. But hockey also has given him financial losses -- perhaps as much as $100 million -- and taught him that neither money nor sheer force of personality could buy sports success.
"I've matured," Leonsis, 53, says. "And I've taken more steps to self actualization than when I bought the team. Owning a sports team humbles you because you have to learn how to lose."Wanted: big names
In those early days with the Capitals, Leonsis pushed hard to make a winner. And like most new owners, he thought the key was buying good players.
Then came Jaromir Jagr and Michael Jordan.
In Leonsis's most significant attempt to meddle with personnel on the Capitals, he gave Jagr, then the best hockey player in the world, a record $77 million contract. Likewise, he convinced Pollin to make Jordan the president of the Wizards. Jagr played sluggishly in Washington for 2 1/2 seasons until finally working a trade to the New York Rangers, while Jordan remained Wizards president for a year before deciding he wanted to play basketball again. Two years later, in 2003 when Jordan finished playing, Pollin fired him.
It was a bitter but valuable lesson for Leonsis.
"I did two very high profile big deals in 11 years that proved there is no quick fix to anything," he says, sitting in his office. "Everybody said with Jaromir Jagr we're one player away and that Michael Jordan is coming we will get free agents, his competitive fire. . . . And none of it happened. There's big news, it was great for the press releases, great for the media but not for the product.
"And what I've come to realize is there is no substitute for planned strategy and systems, the casting of the team, the development of the team, there is no magic wand. There is no one person, one player that will change everything."
"I made a mistake," he says. "How do I learn from my mistake? I had a reckoning!"
He throws his arms wide as he says this and a great smile slides across his face.
Leonsis is fond of reckonings. He talks about them often. They mark the milestones in life; points where careers veered and new directions were undertaken. In fact he loves reckonings so much he writes a chapter about them in his book, "The Business of Happiness," which is about how to be happier person, and how happiness can lead to success. Among his suggestions: Give back, get involved, be thankful.
The section on reckonings comes under the heading, "A crisis is a terrible thing to waste."He's a fan's fan
At times Leonsis might come off as overzealous, a blowhard as some fans might be tempted to say, standing at games in his oversized red Capitals jersey, always pontificating about happiness. But alone, away from the crowds, he is not nearly as glib. His words, while still coming in torrents, are thoughtful. There is a seriousness to him.
"Ted likes to be liked, he wants to be loved and embraced," says Gary Arlen, the president of Arlen Communications, who has studied the online industry for more than 20 years. "He likes to do things that make people happy. He is disarmingly charming, he can be very low key in person. On the other had it doesn't show how aggressive his business mind can be. He understands how to sell a lot of things."
And through the 1990s, after Leonsis merged his second company with AOL, he sold a new kind of intimacy -- a way, through AOL's e-mail and instant messenger services, of communicating with somebody at a very personal level without hearing their voice or waiting for a letter to be delivered.
Communication is essential to him. Friends say Leonsis often rises before dawn and heads straight to the computer, where he spends the next two hours returning e-mails. Upon ending meetings in his office, he springs from a chair and runs straight to his desk. Visitors, left to let themselves out, can hear the words "YOU'VE GOT MAIL!" shouting from the speakers before they've pulled open the door.
He craves the intimacy with fans, but he has struggled with their criticism. This is something many titans of business, unaccustomed to the glare, have to adjust to when they get into sports ownership. The difference is almost all of them work hard to create walls between themselves and fans. Leonsis begs them to write him.
It creates a strange dichotomy: the owner who thrives on his accessibility yet bristles at the common fan's anonymous harangues.
"He is sensitive to certain things," Capitals General Manager George McPhee says. "He wants everything to work and everyone to be happy."
In recent years, Leonsis says, he has gotten better at handling this, trying to push his focus from the 10 percent who will be critical regardless of the team's performance to what he calls the 80 percent "silent majority." This year, he says, he decided to stop responding to five or six regular complainers. But it is hard to ignore all of them and invariably some blistering e-mails will leave his computer.
And there are attempts at reconciliation, as with Jason Hammer, the heckling fan Leonsis famously shoved outside the owner's box not long after the Jagr trade. He subsequently invited Hammer to watch a game in his box and patiently explained his strategy for rebuilding the team.
"To me, he's a great owner," Hammer says now.
Of course the problem with owning a second sports team is that you get twice the criticism.
"I'm prepared for that," Leonsis says flatly. "I really have internalized and understand that."
Then his face brightens.
"I would look at it as what would it feel like if your basketball team and hockey team won championships in the same year. That would be a great goal. That comes from personality type right? I prefer to look at it as how good it would be rather than 'oh my gosh what if he had two last place teams?'"Double duty
There are advantages to having two major sports teams, especially in the same arena. Leonsis can combine marketing and operations staffs and can schedule enough events at Verizon Center to keep a strong and steady flow of money pouring in.
But Leonsis also has so many interests. A few years ago he started a website called Snag Films in which people can share documentary films. He helped produce a documentary called "Nanking" and he just merged a company, Revolution Money, with American Express.
Now he is heading into territory where few men tread anymore. While a small handful of corporations like Comcast and Cablevision own more than one major American sports team, there are only three individuals who do as well: Stan Kroenke (Denver Nuggets, Colorado Avalanche and part of the St. Louis Rams), Jerry Reinsdorf (Chicago Bulls and White Sox) and Paul Allen (Portland Trail Blazers and Seattle Seahawks). So many others, like Tom Hicks in Dallas, Jerry Colangelo in Phoenix and Jerry Buss in Los Angeles have sold one or more of their teams.
"It's a huge investment, even more so now than it used to be," says Michael Cramer, who teaches sports management at NYU's school of continuing studies and ran the Texas Rangers and Dallas Stars for Hicks. "Simplistically most owners get their fix owning one team. I don't think they needed the fix to own multiple teams. It's also expensive and thirdly there are no franchises that are home runs as cash cows. [Two sport owners] get involved in sports and that's usually enough. They don't want more than one team. They usually come to their senses when they have two teams and realize they should only have one."
For a moment Leonsis seems to contemplate the list of two-sport owners. "There's got to be more," he says.
Then he shrugs.
"So I made a movie and I wrote a book. I have two kids, that's working out fine," he says with a laugh. "I should be able to do it. I have two teams now. I go to Mystics games and I go to Mystics meetings, but I understand how hard it will be. But I'm still young and I'm up to the challenge."
Staff writer Dan Steinberg contributed to this report.