Leonsis holdings under new Monumental Sports include Wizards, Verizon Center
Washington Capitals owner Ted Leonsis christened his newly named $825 million sports empire Monumental Sports & Entertainment on Thursday as he took full control of the NBA Wizards and Verizon Center, a decade after becoming a minority owner to the late entrepreneur Abe Pollin.
Leonsis also announced a new management team, appointing investor and Proxicom founder Raul Fernandez and Black Entertainment Television co-founder Sheila Johnson, both investors in Monumental, as vice chairmen. Dick Patrick will remain president of the Capitals and will become Monumental's vice chairman and chief operating officer. Leonsis is Monumental's chairman.
Monumental Sports & Entertainment now holds the assets of Leonsis's Lincoln Holdings, which owned the Capitals and 44 percent of the Wizards basketball team and Verizon Center. It also now owns the assets of the Pollin family's Washington Sports & Entertainment, which had controlled the majority of the Wizards and Verizon Center.
"We're all now part of the same organization," said Leonsis, who made the announcement before investors, politicians, business people, coaches, fans and friends at Verizon Center. "We're all on the same team. We're singing from the same hymnbook. This was a serious undertaking, and it took a village to get it all done."
One priority, he said, would be to grow the Wizards' season-ticket base, which has withered after years of team losses. The Capitals have sold out every seat for the 2010-11 season, he said.
Leonsis said he would not change name of the Wizards, formerly the Washington Bullets. But he hinted that he might change the team colors from the current silver and blue to red, white and blue.
"It's no secret I am partial to red," Leonsis said.
The former AOL mogul joins a rarified group of sports businesses that own two major professional teams and the arena in which they play, which industry experts said could enable him to dominate the local sports scene.
Ownership control of the state-of-the-art arena that hosts 220 or so events a year allows Leonsis to start directing arena revenue to his hockey team, which has been losing money for years despite recent success. The Capitals received no revenue from the arena's estimated 108 luxury suites and 3,000 club seats, which had been controlled by Pollin's estate.
"His ability to control so much of Washington, D.C.'s sports assets gives him economies of scale, but also allows him to generate revenue by cross-promoting all those assets," said David Carter, principal with the Sports Business Group, a Los Angeles consulting firm. "It will be easier for him to make money over the long haul. It will be even easier than that to build the franchise values of those teams."
Leonsis introduced two investors Thursday who helped his ownership group purchase the 56 percent of the Wizards and Verizon Center that Leonsis did not control. SWaN Investors, headed by Fred Schaufeld, and Scott Brickman, owner of the Brickman Group, have joined Monumental, whose members include Fernandez, Johnson and Capital One Chairman Richard Fairbank.
Leonsis said the value on Verizon Center and the Wizards together is about $550 million.