Ted Leonsis Seeking MLB Team to Round Out Sports Portfolio
Ted Leonsis has built a multibillion-dollar sports entity over 25 years that includes teams, venues and media holdings, but the D.C. sports titan has his sights set on adding a new asset.
“I am not shy to say I want to claim to buy a baseball team,” Leonsis said at Sportico’s Invest in Sports conference on Wednesday. “I love the sport.”
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But this is not just a passion play for Leonsis, who sees an MLB team as a way to fill one of the few holes in his sports portfolio. “You need year-round programming, so you don’t have churn when you go direct-to-consumer,” Leonsis said. “We should be able to in a much more efficient way market to subscribers and be able to cross promote.”
Leonsis is one of several sports team owners who has built multipronged sports businesses. But unlike Fenway Sports Group and Kroenke Sports & Entertainment, Leonsis is focused entirely on the D.C. market. “If you are not in Virginia or D.C., I am not interested in your team,” Leonsis said.
Leonsis has built a sports empire under his Monumental Sports & Entertainment umbrella. It includes the NBA’s Wizards, NHL’s Capitals, WNBA’s Mystics, Capital One Arena and 100% ownership of the newly re-branded regional sports network Monumental Sports Network.
There are two teams that fit Leonsis’ baseball ambitions in the Washington Nationals and Baltimore Orioles. Last year, the Nationals hired Allen & Company to explore a potential sale—Allen managing director Steve Greenberg kicked off the Sportico event in a panel with fellow sports banker Colin Neville of The Raine Group.
Last year, the Orioles hired Goldman Sachs to quietly assess a possible sale. At spring training, Orioles CEO John Angelos said his family was here for “the long haul” and wouldn’t sell the team. John’s father, Peter, bought the team in 1993 for $173 million. Sportico values the Orioles at $1.6 billion, and the Nationals at $2.18 billion.
The sale of either franchise is complicated by the ongoing decade-long legal dispute over TV rights for the O’s and Nats, who both own a stake in MASN. The Orioles own the majority share of the RSN as part of the agreement with MLB to bring a team to D.C. for the 2005 season. In April, the courts reiterated that the Nationals are owed an additional $99 million to resolve a dispute over telecast rights fees from 2012 to 2016. More recent rights fees are still unsettled.
Last year, MSE bought the 67% of NBC Sports Washington that it did not already own and then re-branded it under the Monumental banner. This week, it launched a direct-to-consumer streaming service that gives in-market fans a new way to watch Capitals, Wizards and Mystics games. There are monthly ($19.99) and annual ($199.99) subscription options.
Leonsis was one the architects behind the NBA opening its doors to investments from sovereign wealth last year. In July, MSE announced that sovereign fund Qatar Investment Authority had bought a passive minority stake in the company, marking the first time a sovereign fund invested in major U.S. team sports. QIA bought about 5% of Monumental in a deal that valued the group at $4.05 billion.
Leonsis has big ambitions for MSE. “Our goal is to build the world's most valuable sports and entertainment company,” Leonsis said. “And to do it in one of the 10 most important extended cities, greater Washington, on the planet.”
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