With changes small and sweeping, Leonsis and his team remake Monumental Sports
Monday, January 17, 2011
Ted Leonsis assumed ownership of one of the NBA's most woeful franchises when he bought the Washington Wizards last June from the estate of the late sports entrepreneur Abe Pollin.
Six months later, Leonsis, who served loyally as Pollin's minority partner for more than a decade, is integrating Pollin's assets into Monumental Sports & Entertainment -- and building what he says is an enterprise nearing $1 billion in value, one he hopes one day will rival New York's Madison Square Garden and Los Angeles' Staples Center as a dominant regional sports enterprise.
The former AOL mogul already has made hundreds of decisions designed to change the Wizards from a money loser ($12 million in fiscal 2009) into one of the NBA's high-performing and most profitable franchises, boosting the value of the Verizon Center in the process.
There are obvious changes, such as installing cupholders in the bathroom and sending concession vendors into the stands. Then there are not-so-obvious changes, such as reorganizing the ticket and sponsorship sales staffs, hiring a new head of security and remodeling an owners' club for high-rollers.
"We've had a major cultural shift from being an insulated executive team to being an executive team that really, really feels it's in service to customers, who give us their time and a lot of money," said Leonsis, who has instituted a concierge service for his top-paying customers. "It's the way we are treating our very best customers, the amount of communications, services we offer, access they have to me. We wine them and dine them every day."
In addition to smart marketing and more handholding for customers, Monumental believes a disciplined businesslike approach will do for the Wizards -- who have not won a division title in 32 years -- what Leonsis & Co. did for the Capitals, transformed from an also-ran into the hottest ticket in Washington.
But Leonsis has yet to win a championship, which Pollin did with the then-Bullets in 1978.
"Ted and [Wizards General Manager] Ernie Grunfeld's greatest challenge is going to be earning back the trust of the fans," said Joe Schreiber, who has followed the basketball team for years as a fan and as a former producer for the George Michael Sports Machine. "I was stunned to see how dead the building was for some of the recent weekend games. They must purge the team of any knuckleheads to get the fans to stop saying, 'They're the same old Wizards.' "
Leonsis and his investors began dismantling the Wizards almost as they negotiated to purchase the team following Pollin's death more than a year ago, trading expensive stars such as Antawn Jamison, Caron Butler and Brendan Haywood. Last month the team unloaded Gilbert Arenas, the highly paid guard who was suspended by the NBA last season after bringing handguns to the team locker room.
"The Wizards waited too long to realize that it didn't have what it takes to win a championship," said Leonsis, who has publicly said the Capitals will make the playoffs the rest of this decade and eventually win a Stanley Cup. "It's hard to say, 'Let's blow this up and start all over.' My reaction is: What are we fearful of? We have to take that risk. The Wizards with Gilbert Arenas and Antawn Jamison were pretty good but this year's rebuilding team is probably going to win as many games as the last two years' teams won."
Integrated business model
While he recrafts his team and builds the game experience, Leonsis has also recruited new investors into Monumental, boosting the number of partners to 17. The entire enterprise, with more than $100 million in cash on hand, expects to break even this year.
Dick Patrick, Monumental's vice chairman and chief operating officer, said Monumental is changing the Verizon Center and the Wizards physically, organizationally and culturally.