The Washington Post has an interesting article about current Washington Capitals owner Ted Leonsis. It contains interesting insights about owing a professional sports team. Leonsis, like most other professional sports team owners, made his fortune in a business unrelated to sports (Leonsis was a president at America Online when that company was an internet powerhouse in the early 1990s) and purchased the Caps for $85 million. The article makes it clear that his career as a successful executive at AOL did nothing to prepare him for the experience of owning a professional sports team. He discusses the hard lesson he had to learn about problems with signing high profile free agents (in his case, Jaromir Jagr) that many other team owners never seem to learn. I’m looking at you, Dan Snyder.
Leonsis characterizes professional sports teams as “a small business. Small revenue, but with a disproportionately big impact on a community.” I think that quote captures the central conundrum that plagues the relationship between teams and cities when it comes to bargaining over the public provision of sports facilities in North America. The article claims that the Caps have lost $100 million since Leonsis bought them. I find it hard to believe any claim of losses made be a team owner, but Leonsis is not lobbying for any government handouts so he has no external motive to claim these losses (although he might have internal, tax related motivations for taking accounting losses on the Caps).
Leonsis is in the final stages of purchasing the Washington Wizards. When that transaction is completed, he’ll join an exclusive group: individuals who own multiple professional sports teams. The other members of that group are Stan Kroenke, who owns the Denver Nuggets, Colorado Avalanche and part of the St. Louis Rams, Jerry Reinsdorf, who owns the Chicago Bulls and White Sox and is trying to buy the Phoenix Coyotes, and Paul Allen who owns the Portland Trail Blazers and Seattle Seahawks.
The article is worth a read.