Pollin sells part of sports empire

Capitals, MCI Center, Wizards share bought by AOL executive

$200 million transaction

May 13, 1999|By Jerry Bembry | Jerry Bembry,SUN STAFF

WASHINGTON -- It began in 1964 with the purchase of the then-Baltimore Bullets, and, in the 35 years since, Abe Pollin has built a sports empire. Yesterday marked what may be the beginning of the end of Pollin's involvement in professional sports.

After months of negotiations, Pollin sold the Washington Capitals of the National Hockey League to a group led by America Online executive Ted Leonsis. In addition, Leonsis purchased a minority stake of Washington Sports and Entertainment, an umbrella group that operates the Washington Wizards of the National Basketball Association, the Washington Mystics of the Women's NBA, the Washington-Baltimore TicketMaster franchise, as well as three arenas, including the 20,000-seat, 17-month-old MCI Center.

For Leonsis, his first involvement in professional sports cost him approximately $200 million, with a future option to purchase the entire Washington Sports and Entertainment operation.

"I've always loved sports, and this is a dream come true," said Leonsis, 43, who is a group president with AOL Interactive Properties. "I went to [Pollin] and said, `However you feel comfortable, I'm yours. Tell me how you want to do this.' And this is the deal he structured."

And thus passes Pollin's control of the Capitals, a team that last season made its first appearance in the Stanley Cup finals. In 1972, Pollin, already the owner of the Bullets, made a bid for one of the two NHL expansion teams to begin play in the 1974-1975 season. The league awarded Pollin a franchise three months later.

Explaining that at the age of 75 he wanted to spend "a little less time in sports," Pollin said he first asked his two sons whether they would like to be involved in the Capitals. But neither Robert Pollin, an economics professor at the University of Massachusetts at Amherst, nor James Pollin, who owns a Maryland-based travel company, had any interest.

"Both said they had their own careers," Pollin said. "Both said they're very happy in their own careers, and both said they would not give up their careers to come into my business."

So Pollin set out to find potential owners he felt would be good for the long-term future in Washington of his sports and entertainment company. Pollin said he was turned off by the recent proceedings involving the sale of the Washington Redskins, in which the first buyer for the team was rejected by the National Football League.

"I watched what happened to the Redskins, and I did not want that to happen to my teams and I did not want my family, our fans or this city to go through that kind of process," Pollin said. "I wanted to make sure that the Capitals would stay in Washington and would be an integral part of the community."

And Pollin said that will be achieved with the sale of the team to Leonsis, a native of Brooklyn, N.Y., who was named one of the "200 Global Leaders of Tomorrow" by the World Economic Forum, one of the "Top 100 Marketing Executives" by Ad Age and one of the "Top 12 Entrepreneurs" by Inc. Magazine Entrepreneurs Program.

A 1977 graduate of Georgetown University, Leonsis for five years was mayor of Orchid, Fla. In 1987, he founded Redgate Communications Corp., considered one of the first new media marketing companies. AOL acquired Redgate in 1994 for $45 million.

Leonsis joined AOL as president of AOL Services Co. During three years in the job, AOL grew from 800,000 members to 8 million and from less than $100 million in revenues to $1.5 billion. That led to his current position with AOL Interactive Properties.

"I understand the power of marketing," Leonsis said. "I understand how important it is to bring the customer in, have them sample the wares and keep them."

And though he said AOL will have no involvement with the Capitals, Leonsis plans to use his expertise to bring fans to the MCI Center to see the Capitals, a team that -- after its Stanley Cup run of a year ago -- failed to make the playoffs this past season.

Leonsis' ownership group includes Jon Ledecky, an entrepreneur who founded three separate Washington-based companies with sales in excess of $1 billion each; and Dick Patrick, the president of the Capitals, who has been with the team for 17 years.

"What Ted brings is a different way to looking at sports and the business of sports," Ledecky said. "Ted is really a new media visionary -- he does see the world in a different way. I think as time goes along you will find out our plans, they're very innovative and very creative. We're going to put a lot of [fans] in the seats."

Leonsis will have a minority interest in the rest of Washington Sports and Entertainment, but said he plans to have little input in the running of the Wizards.

"We have our hands full with the hockey team," Leonsis said. "I do think we can bring some energy, some focus to get the hockey team going. If Mr. Pollin wants advice or counsel on the basketball team, he can ask."

Pollin yesterday vowed a long-term connection to the Wizards. Pollin's only league championship came with the Washington Bullets in 1978.

"I want to stress I am not retiring," Pollin said. "I never plan to retire. I plan to be actively involved in control of the Wizards and the MCI Center.

"My goal is to bring another NBA championship to Washington. And we're not going to quit until we do it."

Pub Date: 5/13/99

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