Leonsis: Mystics are losing money, but franchise will survive
Tuesday, November 23, 2010; 12:10 AM
When Sheila Johnson announced earlier this month the Washington Mystics got rid of their general manager and coach in a cost-cutting move, the reason she gave for the drastic measure was keeping "the franchise alive," leaving some to wonder if the team was about to go under.
Ted Leonsis attempted to allay that fear in an interview last week, and others around the WNBA, including the commissioner, gave a more upbeat analysis of the league as a whole.
Yet the recent economic downturn has forced the Mystics and other teams around the WNBA to re-evaluate their business strategies.
"We're trying to put the best foot forward in our front office in order to make everything work, but we also have to keep the team on the floor," said Johnson, the Mystics' president and managing partner in a conference call on Nov. 1 to announce the hiring of Trudi Lacey as the team's latest general manager and coach. "We have to keep the business model alive.
"You have to understand: We have been in a recession and it is really hurting all teams across the board. We have budget constraints now."
Leonsis acknowledged the Mystics, which Johnson bought into in May 2005 by joining his group Lincoln Holdings, now Monumental Sports and Entertainment, are not doing well financially.
"The franchise is losing money," he said. "It's lost money every year that it's been in existence, but that doesn't mean it is in dire straits.
"We've continued to invest in the business, and we believe in the WNBA. We believe in the franchise. We believe in the fan base. To be frank about it, our expenses have been increasing faster than our revenues so we've been losing more money year over year, and that is troublesome for any business."
While the Mystics continue to search for a business model that works, other WNBA teams are gaining solid footholds in their markets.
"We're thrilled with the on-court performance, but we take a lot of pride in the financial performance," WNBA Commissioner Donna Orender said. "We've actually been able to hold our own very well."
According to the league, average attendance this year increased for the fourth consecutive season, and team sponsorships increased by 20 percent. The WNBA also achieved a significant milestone this season when one of its franchises, the Connecticut Sun, reported a profit, becoming the first team to do so in league history.
"I think every single team in the league is making progress financially," Sun chief executive Mitchell Etess said. "We have been working through the worst economic time in history and teams have improved their financial positions, not just us."