Even though the Washington Capitals’ local TV rights deal with Comcast SportsNet Mid-Atlantic runs for three more seasons, the NHL team’s owner, Ted Leonsis, already has started negotiations about an extension, according to several sources.
Leonsis’ Monumental Sports & Entertainment hired Allen & Co.’s Steve Greenberg to negotiate with the RSN’s executive team led by NBC Sports Group President Jon Litner.
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Owner Ted Leonsis may want to match timing of Capitals, Wizards contracts.
Photo by: GETTY IMAGES
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It seems likely that Leonsis is looking to sync the Caps’ deal with the Wizards’ deal, which runs through the 2020-21 season. The Capitals’ current deal runs through the 2016-17 season.
Sources said an extension of the Wizards’ deal has not been brought up yet in the early talks. But with the recent trend of teams signing long-term TV deals, it’s possible that an extension for the Wizards could be worked out alongside one for the Caps. Despite high-profile problems with local TV rights in Los Angeles (Dodgers) and Houston (Astros and Rockets), the market for local team rights remains robust enough that many teams believe it makes sense to update their TV deals.
The Capitals currently make around $13 million per year from Comcast SportsNet Mid-Atlantic, sources said, and the Wizards pull down around $17 million, a figure that does not include an upfront payment that Comcast made when the deal was signed with former owner Abe Pollin. To date, Comcast SportsNet has resisted opening its Wizards contract, which sources say has terms that are favorable to the RSN.
Leonsis’ strategy of opening negotiations on the Capitals’ rights three years before they expire follows his recent experience in helping to negotiate the NBA’s media deal this summer.
As head of the NBA’s broadcast committee, Leonsis was part of a group that decided to renew the rights deals early without taking them to the open market. The resulting nine-year, $24 billion deals with ESPN and Turner Sports are considered a windfall for the league.
The move to try to sync up the rights also fits in with Leonsis’ strategy around his digital channel, Monumental Network. Leonsis has not been shy about his desire to build Monumental Network into a service that potentially could house his teams’ rights. Leonsis’ threat of putting his teams’ rights on a platform that he owns carries more weight if both teams’ rights expire at the same time.
Greenberg is familiar with the Washington, D.C., market. Last year, MLB hired the media consultant to find a compromise in the MASN dispute between the Orioles and Nationals. During that process, MASN entertained proposals from several third parties, including Fox Sports and Comcast SportsNet. Leonsis’ Monumental did not express interest in submitting a proposal, sources said.
No deal was made, and the MASN dispute now is in the courts.
Greenberg also has worked with Leonsis before. In 2010, for example, he advised Leonsis as the former AOL executive went through the process of buying the Wizards.
The Capitals’ ratings performance generally falls around the middle of the league’s teams. Last season, the team did not make the playoffs, and its 1.39 average rating in the Washington designated market area was ninth among the NHL’s 23 U.S. teams. The 34,000 homes that tune in for each game rank 10th among the league’s U.S. teams.
