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Leonsis: Mystics are losing money, but franchise will survive
The Mystics refused to make Johnson available for an interview nor did they provide any financial information about the team. Leonsis said the Mystics represent less than 2 percent of Monumental Sports and Entertainment revenue and that they have the highest expenses of any team in the league. Asked how the money was being spent, he said: "Everywhere. Salaries, coaches, trainers, travel expenses, scouting, videos, rehab, the locker room, marketing, sales; you can go through just about every line item and we've been increasing the investment."
The problem is the Mystics aren't generating the revenue to come close to meeting these expenses. According to David Carter, executive director of the University of Southern California Sports Business Institute, teams depend on revenue from three streams: sponsorships, television and turnstile, with the first two being heavily influenced by the third.
"They certainly go together," he said. "Advertisers and sponsors are very interested about what your reach is, and that reach is a function of television and what happens in the venue."
The Mystics, who led the league in attendance in six of their first seven seasons and hit an high of 16,202 fans per game in 2002, have seen smaller and smaller crowds at Verizon Center since 2005. They sank to a low of 7,788 fans per game in 2007 then rebounded to more than 11,000 fans per game in 2009. This past season, they averaged fewer than 9,500 fans per game.
Leonsis contends the Mystics' large crowds in the early years were because many tickets were given away.
"It's been proven through sports that you devalue the franchise by not charging," he said. "You give people tickets then they'll never become customers because they say, 'I'll wait for the free ticket.'"
Connecticut averaged 7,486 fans last season, and yet the Sun, which operates in the smallest market in the league, found a way to make a profit.
"We have the lowest number of comp [free] tickets in the league," Etess said. "We always have. We have focused from the beginning on selling tickets."
Etess put such a strong emphasis on selling tickets that when the economic downturn came and the team was forced to take cost-cutting measures, he increased the sales force.
"The more sales people, the more tickets we can sell," he said.
Etess said success on the floor helped build his team's bottom line. Though the Sun missed the playoffs this season, it had gone to four consecutive Eastern Conference finals.
That is why many questioned Johnson's decision to get rid of the general manager, Angela Taylor, and coach, Julie Plank, who led the Mystics to the two most successful seasons in franchise history.
"Angela and Julie were not responsible for selling tickets," said Judith Schaeffer, a season ticket holder since the team's first year in 1998. "They did their jobs quite successfully. If this franchise is losing attendance, if the franchise is losing money, it was not their fault. They did what they were supposed to do. They won games. They made the team successful. If the people who were in charge of the business operations of the Mystics can't take that and market that, then maybe Sheila Johnson should be looking to them. But now she's gotten rid of the people that made the team successful on the floor, who put a good product on the floor."
Leonsis was asked if he could explain why Taylor and Plank were let go.
"I've outsourced the leadership and management to the Mystics to Sheila Johnson and Sheila's acting as the owner and governor," he said. "This was the decision that she thought best."
He said any cost-cutting measures will not affect the performance of the team on the court.
"We think we're spending the appropriate amount of money to field a very good team and to have very high levels of service, and we're committed," he said. "We're going to continue to get the team to try to perform better but so far we have failed in creating magic. And I'm not blaming anyone but us. We have to do a better job."