By Emily Russell

Ted Leonsis might be the ultimate Washington, D.C., sports fan.

Over the past 26 years, the former AOL executive has acquired many of the U.S. capital's sports teams: the Washington Capitals (NHL), the Washington Wizards (NBA), the Washington Mystics (WNBA), and the Washington Valor and Baltimore Brigade $(AFL)$. Those teams -- as well as several sports venues, esports leagues, and development teams -- make up Monumental Sports and Entertainment, which Leonsis founded in 2011.

It's now an $8 billion "enterprise of size and scale," Leonsis recently told Barron's editor at large Andy Serwer in an interview for the At Barron's video series.

And Leonsis is still finding room to grow. The company bought NBC Sports Washington, now Monumental Sports Washington, from Comcast in 2022, and Leonsis suggested Monumental could add another team to their roster. It's also investing $300 million into upgrading the Capital One Arena, Washington's nearly 30-year-old arena where some of Monumental's teams play.

Below are some other highlights from Leonsis' conversation with Serwer, in which they discussed hockey, basketball, and business. The transcript has been edited and condensed for clarity and is excerpted from the longer video interview.

Barron's: Tell us about Monumental. Eight teams, five venues, and one platform. What does that mean?

Ted Leonsis: In 1999, I bought the Washington Capitals. I was a season-ticket holder. I didn't really get into it thinking this would be a big business opportunity. It was more to scratch a competitive itch.

When you own a team, there's a finality: there's one winner. But I came to sports with a media and technology background, and I was really surprised how undervalued the industry was. Someone had said to me, "Why are you buying a crappy little hockey team? You paid $85 million for it." Now the team is worth $2.5 billion. My basketball team I paid $500 million for. Now it's worth $4.5 billion.

The reason is, like a subscription business, we look like a software services business. We have big, big customers that sign up for five or 10 year deals, and the contracts have escalators in them. And so about 70% of our revenue is predictable and what's not predictable -- season tickets -- they renew 80 to 90% every year.

So it's such a great business.

I'm wondering how much sway an owner has. The Capitals are one of the best teams in hockey right now. How much do you have to do with that?

As an owner, you really set the strategy, the culture, the budget. In my 25th year of ownership, they had little celebrations for us. I was really touched, surprised. This is going to sound like a humble brag, but I got to 1,000 wins the second-fastest of any owner in the NHL. This year, the 26th season, we had the best record in the league.

The Wizards, on the other hand, are one of the worst teams in basketball. So are you responsible for that, as well?

Well, no one has ever accomplished where we are currently positioned: the best team in the NHL and the worst team in the NBA.

It is by design. We had a playoff-caliber team year after year at the Wizards. But we didn't have an ascendant star. The NBA is [LeBron James'] world. It's Kevin Durant's world. It's Steph Curry's world. The way you get those players is through the draft. So we decided a couple of years ago to rebuild the team around young players and draft picks.

Last year, we had three first-round picks. The draft is very, very strong this year and next season. We've loaded up on picks. We have lots of young players. I think we have the youngest team in the NBA. They're going to go through their growing pains. But if you look, Oklahoma City has the best team in the NBA, and they went through the exact same strategy.

So it's a rebuilding phase. How is the NBA going right now?

The NBA, I think, is right now the world's most valuable sports and entertainment enterprise.

The NBA is the growth stock. It's very ascendant. Remember, we've built this huge enterprise just in North America. We've gone to China. A couple of years ago we did Africa. And now maybe we'll be going to Europe.

Why do we want to do that? Well, the partners who license our intellectual property already have 100% of North America; they want to be more global. And our brands, our players are the number one search term on Google five or six years in a row. So I think that we have the opportunity to go from $125 billion today to be an organization of size. And that benefit from the league flows down to all of the teams.

But some people are concerned about the TV ratings. They could be better, right?

Yes and no. I look at engagement and I look at our platforms. Our social has been growing like crazy. Our direct-to-consumer has been growing like crazy. The cable world has shrunk. I am chairman of the NBA media committee. We're very focused on making sure we can get back on broadcast television.

So I think we are still the convener. People really want to watch our sports. Even locally, the Capitals could get two, three, four rating points. CNN, on a good night, gets less than one rating point in Washington, D.C. So sports still has this ability to attract users, get engagement in long-form. It's three hours -- pregame show, the game itself, then post- game show. And then the advertisers really want to go where there's this passion, this engagement from the audience.

I think that is why the media companies have been rewarding us with these long-term, really, really significant media contracts.

I want to ask you about entrepreneurship. You're a serial entrepreneur -- not born with a silver spoon in your mouth. What are some keys to starting and growing a successful business?

You can find a niche. You can find an industry. You can take a contrarian view.

When we started AOL, it was illegal to get on the internet. The internet was owned by [the Defense Advanced Research Projects Agency]. We said let's build a private internet. Crazy. We had a rollout in every area code so you could make local calls. And we built that and got America online. That was a crazy idea at the time.

Now it just seems so self-evident. Most entrepreneurs -- if they start out in this generation -- are too focused on the reward. They're talking about exits. They're talking about valuations. If you start out with how can I make a better product -- simpler, easier to use, less expensive, for a customer -- if you nail that, then the venture capital will follow, the margins will follow, the profits will follow.

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April 18, 2025 01:00 ET (05:00 GMT)

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