Fewer than 100 days have passed since America Online executive Ted Leonsis purchased the Washington Capitals, and the team has yet to play a regular season home game under his regime, but the new owner said yesterday he's already certain the once-floundering franchise will become one of the NHL's most successful teams, and do so quickly.
Leonsis and co-owners Jon Ledecky and Dick Patrick met with Washington Post reporters and editors at a luncheon yesterday, during which Leonsis said he expects the team to be thriving fiscally within three years and to be the most financially successful club in the league five years from now.
"Originally, we talked about a five-year plan, but I think we can do this in three years," Leonsis said. "Things are progressing faster than we expected."
The owners are optimistic, but readily admit the breadth of the job before them -- filling a half-empty arena, creating marketing and promotion departments and turning the team into a perennial Stanley Cup contender.
Even with 24 of 27 teams losing money last season, according to the owners, and a possible conflict with the players' association when the NHL's collective bargaining agreement expires in 2004, Leonsis said he's confident his group's $200 million investment will be rewarded.
The NHL has asked Leonsis not to comment on particulars regarding ticket sales and revenue, and he declined to give a specific figure on the amount of debt he inherited, but sources close to the team said the Capitals have lost tens of millions of dollars the last few seasons and their season ticket base was at the bottom of the NHL. "With the road this team was going down, there wouldn't be a hockey team in this city," Leonsis said.
Season tickets have doubled from this time a year ago, Leonsis said, and stand at 6,000 -- expansion teams must guarantee 12,000 season tickets before being allowed in the league. Leonsis said reaching that plateau is "eminently doable" given the population and wealth in this market and the team's efforts to restructure ticket policies and make games more fun and affordable. He expects there to be a lengthy waiting list for season tickets five years from now. "I'm absolutely confident we'll get there," Leonsis said.
"Some of it sounds out of the box, but this is what we intend for five years from now," Ledecky said. "One thing I'll say about all of this -- and you can be cynical and skeptical as reporters -- but you have to look at where this is coming from. You have to look at the guy who can pull all of this off. I made a $60 million bet on this as a businessman. Essentially, I invested $60 million in the genius of one person."
Leonsis, who has invented a board game and was once elected mayor of Orchid, Fla., has been with AOL six years, specializing in new media. He is credited with initiating AOL's ventures into e-commerce and direct marketing. The company's profits have increased exponentially during his tenure there. Ledecky, who serves on the board of many area charities, is co-founder or director of 10 publicly traded companies and founded three Washington-based companies with sales in excess of $1 billion. Patrick has been with the Capitals since 1982 and has developed commercial real estate for more than 20 years.
The new owners already have invested additional millions in marketing and advertising, including overhauling the team's game night presentation, hiring people away from other organizations and paying feature film director Doug Liman to produce the team's new TV commercials. Leonsis posted a list of 125 things they have changed to accommodate their fans on the team's new Web site -- a high-tech Web page that Leonsis believes will eventually generate millions in revenue from advertisers. They've added everything from an organ in the arena to employees to clean the Plexiglas between periods.
The team is in the process of moving into new offices on 9th Street, which would cement their own identity and signify their independence from former owner Abe Pollin and Washington Sports and Entertainment. The owners have first crack at purchasing the Wizards when Pollin decides to sell them, under the agreement reached in May, and said they have received positive feedback from the Pollin family for their aggressive approach to rebuilding the Capitals.
Ledecky is working with charitable organizations to get underprivileged children into games in order to meet players and learn about hockey. The goal is to then take the kids on the ice, giving them skates and equipment at Washington rinks such as Fort DuPont. The owners have also spent time with Redskins greats Darrell Green and Art Monk, getting their input on ways to help increase the fan base in the inner city.
They expect the 15-hour days and endless procession of tasks to pay off. They believe Washington can thrive as a hockey market, one where success in the standings meshes with name recognition for the team -- in North America and abroad.
"Don't look at Day One, think about 40 years from now," Ledecky said. "We look at this as a long-term investment. We'll still be enjoying this asset 40 years from now."