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Capitals, Wizards announce new long-term partnership with CSN Mid-Atlantic

Alex Ovechkin in 2015. (Photo by Bruce Bennett/Getty Images)

Ted Leonsis’s Monumental Sports & Entertainment group announced on Tuesday a long-term partnership with Comcast SportsNet Mid-Atlantic that gives the local sports mogul a piece of the regional sports network while also strengthening his own Monumental Sports Network.

The deal — which is still pending NHL and NBA approval — allows CSN to  retain exclusive rights to Capitals and Wizards broadcasts. In a significant change, it also makes Monumental Sports an equity partner in CSN Mid-Atlantic, with two representatives on the network’s six-person board of directors.

Terms were not announced, but Monumental is believed to be receiving approximately one-third ownership of the regional sports network, something Leonsis has wanted since he acquired the Caps in 1999. The Post previously reported that the deal will run past 2030.

And rather than shuttering his fledgling Monumental Sports Network (MSN), Leonsis will attempt to expand it into a viable over-the-top regional content network. NBC Sports Group will obtain an equity partnership in MSN — with similar representation on its board of directors — and MSN will soon announce a subscription service offering live streaming of WNBA, Arena Football and NBA D-League games, and additional live content.

Leonsis for years touted his new network as a possible destination for Wizards and Capitals games, and has emphasized the importance of sports teams owning part or all of their own distribution channels. Creating MSN was widely seen as a warning to CSN, with Leonsis publicly arguing that to stay competitive, Monumental would either need to launch its own cable network or receive significantly higher fees from CSN.

The new deal, he said this week, will create more content for consumers, and more revenue for his teams.

“This deal and this partnership frankly helps us to make more investments in the teams and in the players,” Leonsis said. “And if we have great teams, we’ll have great ratings, and more people will subscribe. This is the kind of deal that allows us to perform and act and invest like we’re a big-market team, and that is in the best interest of the fans and the community, but it’s also in the best interest of NBC Universal and CSN. … So that alignment — that positive flywheel — to me is what’s most gratifying and exciting.”

There are other pro teams with with either full or partial  ownership of their regional sports networks, including the Orioles, who control Mid-Atlantic Sports Network. Leonsis had often used MASN as an example of what his new network could become in a post-CSN future. Instead, he chose to remain with his long-term partner, agreeing to a deal whose span seems certain to include major changes in the industry.

“The only place you’ll be able to watch the Caps and the Wizards over the life of the deal is on CSN,” he said, “and CSN has committed to us that they will be wherever the fans are.”

Unlike MASN, CSN Mid-Atlantic also has a robust news division. The new ownership structure — with Monumental having a significant stake in one of Washington’s most influential sports newsrooms — could raise the same questions about objectivity that have been directed at the Daniel Snyder-controlled ESPN 980.

“Our reputation of being fair and being unbiased in our coverage, I stand by it,” said CSN Mid-Atlantic President Rebecca Schulte. “I don’t think it’s going to change at all. I don’t think they want it to change at all. We’ll cover the teams exactly the way we would either way.”

“I only get mad when we’re not covered; I don’t get mad when we are covered,” Leonsis quipped. “What’s happened in the cable world and the media world is that live games and movies — those are about the only two things that are really proven to be really important, that people value. That CSN has secured all of the Caps and Wizards games is a testament to that. That’s the fulcrum of [CSN], and they’ll now make bigger investments in the coverage, and that makes me happy. Now, as part of that coverage, when we do something bad and we lose 20 games in a row, I’m sure they’ll be screaming and hollering at us, editorially. And that’s fine.”

Leonsis and his son Zach, who runs MSN, described a future in which hardcore local sports fans would subscribe both to CSN Mid-Atlantic (via a cable package) and Monumental Sports Network (via an OTT subscription), in the same way consumers might have both cable and Netflix. The online network will broadcast games of the Washington Mystics and Washington Valor, and of the D-League team Monumental is expected to acquire.

Ted Leonsis recently invested in his first esports franchise, which could also find at home on MSN, and the network is expected to unveil additional partnerships. The new investment from NBC Universal will help Monumental create “a really wonderful next generation product in a city that is such a hotbed for millennials,” Zach Leonsis said.

“It’s really the first-ever regionalized OTT subscription strategy,” he said. “We’re trying to deliver multiple home teams across multiple sports in multiple calendar seasons; all teams that as a home-team fan — as a D.C. or DMV sports fan — you would be interested and wanting to watch.”

The cross-ownership in the two networks created “a really unique one-of-a-kind deal,” said David Preschlack, the president of NBC Sports Regional Networks. Partnering with Monumental, he said, “is going to make us better in ways we know and ways we don’t,” and he said that Washington’s demographics make it the perfect market for experimentation.

CSN is also expected to offer deeper year-round coverage of the Capitals and Wizards with increased access. The network, for example, recently launched a three-part, behind-the-scenes series about Capitals training camp.

But the cornerstone of the deal is something traditional: live coverage of all non-nationally exclusive Capitals and Wizards games. Sports broadcasts, Leonsis said, are the rare TV programs that have stood relatively firm against the wave of DVRs, on-demand services and cord-cutting. Leonsis served as chairman of the NBA media committee that recently landed the league a transformative $24 billion deal, and that experience only reinforced to him the value of live sports programming.

That led to the repeated warnings of how Monumental could reclaim ownership of one of its most valuable assets: its TV broadcasts. But Leonsis said several factors convinced him that partnering with the existing network — which has shown Caps and Wizards games since it launched in 1984 — was a better route than setting out on his own. He said CSN and its parent company have shown a commitment to innovation and growth, that “they’re not going to let this iceberg melt.” He said NBC Universal’s willingness to invest in and nurture MSN “was an indication that this really big important company was nimble and could try new things.” And he said the partnerships and cross-promotions created by the new deal were more appealing than the alternative.

“The organizations that just have a network or just have one singular property are struggling,” he said. “And the ability to team up and leverage and scale just seemed the smarter way to go.”