For Pollin, a Wrenching Decision to Let Go
Washington Post Staff Writers
Sunday, May 16, 1999; Page A1
Abe Pollin nervously paced back and forth in the bedroom of his Bethesda home on April 22, unsure whether he could bring himself to sign the papers later that day that would begin the process of selling off his beloved Washington professional sports empire.
It was a beautiful spring day. But inside, Pollin was clouded with doubt about whether he could let go of the Washington Capitals, the hockey team that he had given birth to and nurtured for decades. "I think I'm going to back out," he said to Irene, his wife of more than 50 years.
Irene Pollin, Abe's partner in life, in sports and in business, knew her cue. "You are doing the right thing," she said firmly. "This really is the right thing at the right time. . . . This is good. This is a good guy. The whole thing looks good."
This is the story of how the 75-year-old Abe Pollin came to realize that he had found the right guy and why selling the Capitals and a stake in the MCI Center and the Washington Wizards made sense at this time. It was a business deal, but one with very specific considerations, including the desire for a local buyer who was involved in the region and wouldn't try to push Pollin aside. He didn't want his family, or his teams, torn to shreds, moved to another city or left to twist in the wind, as the Washington Redskins had done in the aftermath of the death of Jack Kent Cooke.
Pollin's 48-year-old son, Robert, also played a key behind-the-scenes role by engaging in a long-running e-mail conversation with the eventual buyer, Ted Leonsis of America Online Inc. The more they e-mailed each other, the more convinced Robert Pollin became that Leonsis was the right person to carry his father's torch forward.
Through those e-mails and conversations, Leonsis, 42, came to realize it wasn't just about the money. Abe Pollin wanted something more respect, loyalty and the reassurance that when it was all over he would still be in charge of most of the sports conglomerate he had built. What Pollin wanted, it seemed, was the deference a dutiful son shows his father.
Pollin ultimately rejected a handful of would-be suitors and last week announced he had agreed to sell the Washington Capitals and 19 percent of his sports management company to a group headed by Leonsis. The purchase price was either $200 million or closer to $150 million, depending on which side is calculating it.
More important than the team, Pollin provided Leonsis and his junior partner, Washington entrepreneur Jonathan Ledecky, 41, with a leg up on the future. Their agreement gives Leonsis first dibs on the most valuable pieces of Pollin's empire, the MCI Center in downtown Washington and the Wizards basketball team.
It was a difficult decision for Abe Pollin, and several times the deal nearly ruptured. Pollin had come to view the teams and the arena as more than a business; he loved them and regarded them as cherished community institutions. Letting go of even part of what he calls his "precious assets" was painful.
But neither of the Pollins' two adult sons, Robert and Jimmy, wanted to join the family business. Robert is an economics professor at the University of Massachusetts at Amherst; Jimmy runs a travel business that charters cruise ships for conventions. Abe Pollin understood their desires; he, too, had broken away from his father's business to start a real estate development firm 40 years ago.
So Abe Pollin had no heir for his beloved teams. At least not a family member.
The Right Timing
Pollin finally became serious about letting the Capitals go about a year ago. The timing was right; the team had just reached the Stanley Cup finals, the first time it had done so in the quarter of a century Pollin had owned it, giving him a chance to feel he was going out on top.
Pollin had authorized Capitals President Dick Patrick, a member of one of professional hockey's family dynasties, to find the right buyer. That was a tough assignment. Although Pollin won't name names, he passed on several offers. One was from a rich New York businessman willing to pay a high price, one party recalled. But the suitor wasn't from Washington, and Pollin didn't want an out-of-towner running his local teams.
As he intended to remain in control of the Wizards and MCI Center, Pollin wanted a buyer he could trust. He also needed someone with enough money to pay full price in cash. Pollin had little interest in anything other than a cash deal that would ease the debt load he had taken on in building the MCI Center. He also wanted money for his charitable endeavors.
One name eliminated early was Robert Johnson, founder and chief executive of Black Entertainment Television in Washington, who in 1995 had offered to build a downtown arena for the Wizards and Caps in exchange for an option on Pollin's teams. Johnson's unwelcome offer helped scuttle Pollin's plans to move the teams from his USAir Arena to a downtown facility that the city would build with public funds.
Without that agreement, Pollin was left to finance the MCI Center himself, adding a heavy debt load. Johnson said last week that he was never invited to bid, and heard about the sale from Pollin the day it was announced.
Pollin also wanted a buyer with a commitment to Washington, the city he had grown up in and called home, a person who would give his time and money to civic causes, as Pollin had done over the years.
Finding a 'Sports Son'
Leonsis had a fan's enthusiasm for hockey. While growing up in Brooklyn, he rooted for the Rangers. During the Stanley Cup finals last year, he sat with his family behind the visitors bench, down low near center ice, cheering for Pollin's Capitals.
Leonsis had the passion for the game and the money. The question was, did he have the personal characteristics that Pollin was seeking? Could he be, as Ledecky later put it, "the guarantor and conservator of his third and fourth child[ren]," the Capitals and Wizards?
What Leonsis became, Ledecky said, "was Mr. Pollin's sports son."
The future partners met about six times, initially during December, and then at an accelerating pace beginning in February. The meetings mostly took place at Pollin's conference room at the MCI Center, and occasionally at a local restaurant.
"We talked about community, religion, family, about how we think about those subjects," said Leonsis, a great, round bear of a man with piercing eyes. "I think he was thinking, 'Can I trust this guy? Can I be around this guy?'"
"Other [bidders] wanted to get rid of him," Leonsis observed. "They wanted to run the teams and be in control. We wanted the opposite. We wanted to work with him, and learn from him."
That was an important message and it was conveyed to Leonsis early on by Robert Pollin, the college professor son who didn't want to take over his dad's business.
Like Leonsis, Robert Pollin is comfortable using the Internet and loves to communicate via electronic mail. After the initial meeting between Leonsis and the two Pollins, Robert Pollin e-mailed Leonsis, asking him to call. Robert Pollin felt he had information that was crucial to the deal but difficult for his father to articulate.
Leonsis phoned at 6 one morning and Robert Pollin laid it out for him. His father, he said, would sell the Capitals to someone who would respect him. If Leonsis was to snare the Wizards and the arena, too, he couldn't push the elder Pollin into premature retirement.
"The chemistry was absolutely central," Robert Pollin said. "We knew [Leonsis] had a lot of money, but other people had a lot of money. . . . I made the point to Ted that this was really about a person, really about how my father would feel about him as a person. If he really wanted to make a deal, that was the crucial thing."
Leonsis was quick to learn. "We never wavered from the message, 'We're just like you when you were our age. You'll be proud of what we do,'‚" he recalled last week.
Since their first meeting in December, the younger Pollin and Leonsis carried on a running conversation electronically, rarely speaking by phone. Robert Pollin, in turn, would convey what he had learned about Leonsis to his parents. Another endorsement came from the Rev. Leo J. O'Donovan, Georgetown University's well-connected president, who knows both the Pollins and Leonsis, a contributor to the school.
"These kinds of personal links were the crucial thing, and they were formed in that informal way over e-mail," Robert Pollin said. "Those specific things were broadly a reflection of his ability to listen and truly understand what I was telling him that this was about. He is absolutely respectful [of] my father. It is not phony. It is real. That was the crucial thing."
There was a kind of ineffable cultural bond as well. Pollin is Jewish and committed to his faith; Leonsis is of Greek descent, but calls himself "an honorary Jew." He's only half-joking; when he was growing up in Brooklyn's Bay Ridge neighborhood, many of his pals were Jewish. It's perhaps telling that the Pollins call him a "mensch," a Yiddish word meaning good person.
Despite these bonds, Abe Pollin says the deal with Leonsis nearly fell apart several times over the course of the five months.
In particular, Leonsis pushed to completely buy out Pollin. "What he really wanted to do was to get everything," said the Capitals' Patrick. "That just wasn't in the cards, but as time evolved it became more apparent there'd be an opportunity to get the rights to get the rest."
The toughest issue, Pollin acknowledged, was his ambivalence about selling the Capitals and a share of the rest of his empire.
"I called it off a couple of times," Pollin said. "It wasn't over an issue. It was over the fact that I didn't want to go through with it. I gave birth to this franchise. I nurtured this franchise."
Providing for an Orderly Transition
"I had a full physical last week and came through with flying colors," he said. "[Leonsis] knows I'm going to be in control."
Pollin said he will leave "when I'm ready," which could be up to the day he "kicks the bucket."
Nevertheless, he believes he has planned for an orderly transition by selling the Capitals now and devising plans to give Leonsis the right to buy the Wizards and the MCI Center at a price to be determined later.
The sale of the Wizards and the MCI Center would bring Pollin much more than the Leonsis group paid for the Caps. The value of the "back end" of the deal, Pollin says, will be determined either through an auction, in which Leonsis is given the right to match the highest bid, or through a professional valuation. In that case, the price would be determined by comparing the value of the Wizards and the MCI Center to comparable sales of arenas and NBA teams.
"My hope is that if and when I decide to leave, we could negotiate a number that is fair for both sides and not have an auction," Pollin said.
Staff writers Rachel Alexander and Shannon Henry contributed to this report.
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