Los Capitales

I like Ted Leonsis. He seems friendly, approachable, and he’s willing to buy a homeless man shoes. While I feel contempt for the NHL owners as a group, I believe Ted’s commitment to building a winning team and growing hockey in D.C. over the last several years makes his role in the lockout just a teensy bit more forgivable. That being said, I was put off by his response to a question regarding the new CBA’s function in determining the future profitability the Capitals…

(Skip to 04:36)

http://video.capitals.nhl.com/videocenter/console?catid=32&id=193653&cmpid=embed-share-video

To me, Ted comes across as defensive. His tone implies that he feels deserving of sympathy for not making “a penny of profit” with the Caps. Now, I don’t doubt he genuinely cares about the team and their fans or that he may even view his ownership as a labor of love, but the suggestion that he isn’t seeing a return on his investment is just wrong. Take a look at how the Capitals have climbed Forbes’ NHL team valuation list in the Ovechkin era:

• 2006: Ranked #30 at $127 million
• 2008: Ranked #26 at $160 million
• 2010: Ranked #16 at $197 million
• 2012: Ranked #11 at $250 million

Also, in the 2010 article, Forbes writes:

Ted Leonsis purchased the 56% of Washington Sports and Entertainment that he did not already own this spring from the Pollin family. The main assets of Washington Sports were the NBA’s Washington Wizards, Verizon Center (home to Wizards and Caps) and local Ticketmaster outlet. The deal implied a grossed up value of Washington Sports of $550 million. Washington Sports came up for sale after the death of long-time owner Abe Pollin in November 2009. Leonsis merged his company Lincoln Holdings (owner of the Capitals) and Washington Sports into a new entity Monumental Sports and Entertainment. With all of these assets under one umbrella and the revenue streams that go with them, Leonsis expects Monumental to be profitable during the 2010-11 season.

While the prediction in that last sentence may have missed the mark, what this tells us is Ted felt he was in a good business position even under the terms of the previous CBA. It’s also important to understand that, if Ted sold the team tomorrow, it would be for 294% more than what he paid for it ($85 million in 1999). Even after considering inflation and yearly losses, that’s still quite a profit. If you want to be even more scrupulous, Think Progress has documented how NBA owners like Leonsis can arbitrarily manipulate profits/losses. But I digress…

The real question here is, was this lockout truly necessary or, at least, did it need to last so long? Ted, himself, explained that the biggest impediment to the Caps turning a profit was its current TV deal. If that’s the case, what did Ted accomplish for his franchise over the past three months? If we believe his claim that, for him, the most important elements of a new CBA were a 50/50 revenue split and a long term (which the players were amenable to months ago, so long as existing contracts were honored), why couldn’t the puck have dropped in the Fall? I can understand Leonsis standing with his fellow owners to get the best deal possible but, at a certain point, you expect a man with such influence, serving on the Negotiating Committee no less, to show some leadership. That Leonsis felt comfortable spending most of his time “listening” while Gary Bettman argued on behalf of owners who, just days before the lockout, signed players to contracts they had no intention of honoring perfectly exemplifies the problem with the NHL: Bettman has unjustifiable power. This man, by the owners’ own logic, is responsible for two bad deals in the last 20 years and they still trust him restore the league’s credibility?

I still believe that, as far as contemporary sports team owners go, Ted Leonsis is about as good as it gets. However, I can’t help but be disappointed when he and his colleagues prefer to be play the victim with the media and fans that keep their product alive instead of holding their commissioner accountable.