SBD/13/Franchises

BETTER OFF TED: AOL EXEC BUYS CAPITALS FROM ABE POLLIN

          Washington Sports Chair Abe Pollin reached a deal
     yesterday to sell the Capitals and minority interests in the
     Wizards and the MCI Center to a group headed by AOL Studios
     President Ted Leonsis, according to Rachel Alexander of the
     WASHINGTON POST.  The cash deal is "valued at about" $200M,
     with roughly $85M being used to acquire the Capitals, and
     the remaining $115M going toward the purchase of a minority
     share of Washington Sports & Entertainment (WSE) and "the
     right of first refusal to buy the remainder of [Pollin's]
     long-held empire."  Pollin: "Let me say I am in perfect
     health, but I am 75 years old and I have decided to spend a
     little less time with sports and spend a little more time
     with those less fortunate than I am."  Pollin noted that he
     could have sold his sports holdings "for a lot more. ... But
     my decision has never been about the bottom line."  Leonsis
     said he "initiated" talks with Pollin four months ago and
     now will control 60% of the Capitals, U.S. Office Products
     Founder Jonathan Ledecky will own 32% and team President
     Dick Patrick will hold 8%.  Leonsis said that although he
     will be an "active" owner, he plans to remain as President
     of AOL's interactive properties.  The Capitals are projected
     to lose $20M this season and the Wizards lost $16M in ticket
     revenue during the NBA lockout (WASHINGTON POST, 5/13). 
     Leonsis, when asked if he will be involved in running the
     Capitals: "No, I'll be the fat guy with the cigar in the
     owner's box yelling and screaming" (USA TODAY, 5/13).
          BREAKING IT DOWN: Pollin will retain a controlling
     interest in the Wizards and his other WSE holdings,
     including the MCI Center, USAirways Arena, the Patriot
     Center in VA and the local Ticketmaster franchise.  Pollin,
     whose two sons, Jim and Robert, "expressed no interest" in
     entering the sports business, said he "did not want a repeat
     of the mess the Redskins went through" (WASHINGTON TIMES,
     5/13).  Leonsis said the front offices of the Wizards and
     Capitals will remain unchanged (WASHINGTON POST, 5/13).  The
     Leonsis group's initial stake in WSE will be around 40%, and
     the deal values Pollin's holdings at around $375M.  Leonsis:
     "These are media and entertainment properties that can scale
     and grow fast.  I think first and foremost this a brand-
     building business.  You get a lot of customers, you sell a
     lot of ads" (WALL STREET JOURNAL, 5/13).  Pollin said
     Leonsis will get the "first and last crack to own" all of
     WSE, but said that there was "no timetable" for when he
     would completely sell his properties (USA TODAY, 5/13).
          I'VE GOT YOU, ABE: In DC, Tony Kornheiser assesses
     Pollin's impact on the Washington sports scene and calls the
     Pollin ownership "the last of the Mom & Pop stores"
     (WASHINGTON POST, 5/13).  In Baltimore, Jon Morgan writes
     that Pollin "won respect" as a team owner, but that his
     operations beyond sports have been "streaky."  Morgan: "The
     marketing has been notoriously under-funded and drawn little
     notice in the industry.  He has a reputation for excessive
     loyalty to key employees, to the detriment of the operation,
     according to several sources."  But Pollin was a "visionary"
     with his facilities (SUN, 5/13).  In DC, Brubaker, Asher &
     Smart note that Pollin became "increasingly concerned about
     the economic viability of his pro sports franchises" as
     player salaries increased (WASHINGTON POST, 5/13).
          TED'S EXCELLENT VENTURE: In DC, Henry & Behr describe
     Leonsis as "colorful, charismatic, loud and [an] extremely
     competitive man.  He makes frequent use of the word `cool'"
     (WASHINGTON POST, 5/13).   Leonsis, on the Capitals:
     "Everything we do with the Capitals will be, `more
     entertainment.'  I may not be able to tell you the two top
     defensemen in the NHL, but I can tell you how to present and
     package the brand" (WASHINGTON POST, 5/13).
          CENTER OF ATTENTION? In DC, Eric Lipton examines the
     MCI Center's impact on downtown Washington a year and a half
     after its opening, and writes that the expected "economic
     bonanza" of the $200M facility "has not materialized." 
     Fewwer fans have "hung around the arena for dinner or
     drinks" after games, "and fewer non-sports events have been
     booked ... than initially expected" (WASHINGTON POST, 5/13).

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