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).
