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Bettman and Leonsis Unplugged

NHL Commissioner Gary Bettman, Washington Capitals Majority Owner Ted Leonsis and Club President Dick Patrick joined a group of reporters and editors for lunch at The Washington Post this afternoon.

Here are some excerpts from our conversation:

On the Capitals' new business model, Leonsis said: "You don't want to fight the market. You want to scale your business to the market. For instance, when we had Jaromir Jagr, Peter Bondra ... as much hype as possible, we sold $21 million worth of tickets. It was our best year ever. We were over 83 percent capacity. But we had a $57 million payroll and we got no revenue sharing."

"Now we've got a $31 million payroll and we get revenue sharing. And we'll sell $18 or $19 million in tickets. Now we are scaled to our market and we are competitive. And we have room under the cap for, 'Should we do it? Should we bring someone on?'"

"From a business standpoint, we're the happiest we've ever been. I look locally and ask, what team is in better shape? We have to compete for a playoff spot this year, which we are doing. Then we have to get into the playoffs. Then win a round in the playoffs. Then go deep into the playoffs and win a Cup. And then come back and be very competitive."

On the Capitals' league low payroll, Bettman said: "If I've got one of the youngest teams in the league, and I think this is the team that's going to take me into the future, I have to make sure a) I don't destroy the chemistry and b) make sure I have room to accommodate these players. The payroll is going to go up. It may not be this year. It may not be as much as you think next year. But it's got to keep going up as long as you're doing the right things. If you look at what [Leonsis] has done, he's brought up five kids from Hershey this year. I think they are on the right track."

On whether he would ever consider selling the Capitals, Leonsis said: "I'm still young. I know how many people want to invest in my partnership, and at what price. It's ironic that we have the best ownership group, friendliest, richest, we all really get along, and we have people wanting to invest. But we don't want new partners. We have plenty of cash and we're having a lot of fun together."

"It wasn't a lot of fun when we were dismantling the team and losing a lot of money. But now we have this model, and we're building something we're really proud of. We want to have a team you feel you know, you grew up with."

"I'm going to own this team until I pass away. When I own everything [Capitals, Wizards, Mystics and Verizon Center], it's going to be, 'Do you love your son or daughter more?' I'll love them both, but in different ways."

On the Capitals' lagging attendance (the club is averaging 13,144 fans per home game, which ranks 27th), Leonsis said: "We didn't sell out the home opener after coming back from the Stanley Cup Finals. There's no simple answer. I have a lot of experts telling me it's a simple as winning. It's not. We haven't broken the code."

"We have to sell 1,000 new season ticket accounts that buy three tickets each. If you isolated the singular thing that we have to do, it's that. That would get us close to breaking even."

"From a market standpoint, it's a great market, it's a very wealthy market. The face of D.C. is changing, people are moving back in, which will be very important. When the arena was built, there wasn't a whole lot of people you could draw from. That's still the biggest gotcha."

There was more. Much, much more. But these were, in my opinion, the most interesting comments from our two hour session. If there is enough demand, perhaps I can post more tomorrow.

By Tarik El-Bashir  |  November 15, 2006; 3:57 PM ET
 
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Comments

Sure, I'd like to hear more. Is there any timetable for when Ted will start to "own everything"? How does he feel about having the Nationals in town competing for the sports entertainment $ ? Any chance he can move the Caps games to WTWP next season?

Posted by: Cosmo | November 15, 2006 4:51 PM | Report abuse

He'll own more until Pollin decides to pass the Mystics and Wiz along. It's completely in Pollin's hands. Teddy just gets first crack at the Wiz-tics.

I'd love to hear more as well, Tarik.

Posted by: Rage | November 15, 2006 5:01 PM | Report abuse

It is clear that it is no longer about winning, if it ever was. It is about a rich boy and his toy but he wont spend to keep it nice. He just wants to brag that it is his toy

Posted by: Bridgewater, VA | November 15, 2006 5:13 PM | Report abuse

Tarik, I'm curious as to whether or not either Ted or Bettman addressed the issue of minority interest in the team, and in hockey in particular. I was at a hockey expo in Las Vegas a few years ago, and Herb Brooks was there and brought that up as one of the major issues that needed to be addressed if hockey was to continue to grow in the US. I know Ted has mentioned the need for more support from fans in the city of Washington, and it seems to me that in order to gain more ticketholders in DC, in which black people are the majority, much more focus on that issue is required. I love that the club has supported Ft. Dupont's club, but I believe much more focus is necessary in this area (for hockey in general, and especially the Caps).

Posted by: Derek | November 15, 2006 5:19 PM | Report abuse

Yeah, I'd be interested in hearing more. Did you guys talk at all about why the attendance for Caps games was so much larger and enthusiastic in the 80s and early 90s at dank, dark out of the way Capital Centre? What happened to all those fans? Were they priced out of the market?

Will there be any coverage of this meeting in the hard copy of the paper tomorrow?

Posted by: Eric | November 15, 2006 5:39 PM | Report abuse

Tarik, I'm curious if Bettman discussed the NHL's complete loss of traction among sports fans. I'm not a regular follower of hockey, so maybe this is commonly addressed by league fans and reporters, but the NHL was well-positioned just a decade ago--now, instead of being the hot, "up-and coming" fourth major league, it's just the best of the non-big three (MLB, NFL, and NBA). Has the NHL given up on appealing to a wider audience, and like Leonsis, just tried to scale its business to the market?

Posted by: DD | November 15, 2006 5:54 PM | Report abuse

I'd also love to hear whether Ted (or Bettman) addressed the impact owning your own building has on your bottom line....

Posted by: TLGDC | November 15, 2006 6:01 PM | Report abuse

That's interesting stuff. Please post more. If memory serves, didn't Leonsis kind of get jobbed when he bought the team? It seems like he gets no revenue from the club section which in turn makes it difficult to compete.

Posted by: an | November 15, 2006 7:02 PM | Report abuse

I'd like to hear more. It is my understanding that Pollin led Ted to believe that he would be a short timer and that Leonsis would be able to buy the Wiz and the arena in short order. Of course, that was a lie and Ted is stuck with a terrible lease where he doesn't even get suite and club seat income from Caps games.

Posted by: Joe | November 15, 2006 7:16 PM | Report abuse

Great tidbits, I'd love to read more on this event.

Thanks!
CH

Posted by: C H | November 15, 2006 7:31 PM | Report abuse

Those comments leave the impression Leonsis is never going to spend much above the minimum he needs to not be the worst team in the league. If he's not ever going to spend close to the salary cap, I think he needs to sell to someone who is more enthusiastic about winning.

Posted by: B | November 15, 2006 7:41 PM | Report abuse

more please

Posted by: s | November 15, 2006 8:29 PM | Report abuse

I think Derek makes a great point. Similarly, I wonder whether another area that was or could be addressed is the outreach by the team (and the NHL, for that matter) to youth hockey in general. As a model, the Stars moved from Minnesota to Dallas, where the only ice in town was in your drink, and immediately began investing in ice rinks and youth hockey teams. At last count, they have eight separate facilities, with kids teams and leagues for all ages. The program is now beginning to produce players who are good enough to play at the elite college level, and teams that are winning at national USA Hockey youth championships. It's an investment that doesn't pay dividends immediately, but it seems to me that it's also an approach to developing a long term, committed part of the additional 1,000 season ticket holders Ted's looking to find!

Posted by: Fred | November 16, 2006 12:12 AM | Report abuse

Post more please.

Posted by: Frederick, MD | November 16, 2006 7:56 AM | Report abuse

I don't think Ted isn't committed to winning. It sounds like he doesn't want to end up like the Penguins (in financial trouble) or Rangers (overpaid losers) again. Like he said, he tried the big splash and the Caps were still ignored by most of the local media and casual sports fans.

BTW I don't think the NHL ever was more than the "4th major league". It really suffers from the fact that most people simply haven't played the game at all, not even street hockey, and just dismiss it.

Posted by: tallbear | November 16, 2006 10:07 AM | Report abuse

Thanks for the info, Tarik.
The media tends to give the Caps a very low profile, and I believe it's related to the lack of minorities in the game & ownership. I'd be curious what their take is on that.

Posted by: Tam | November 16, 2006 11:30 AM | Report abuse

Unrelated: Tarik, please update us on the injuries to 17 and 9? Practice isn't open to fans today and not having them on the ice in the last 8-12 mins really hurt last night....

Posted by: Anonymous | November 16, 2006 12:30 PM | Report abuse

First, Tarik, a big thanks for updating the blog so often. It's nice to get the extra stories as well as just the game recaps.

As for the new positioning of the Caps.. I like it, they're young, they're fast, and they're starting to take shape. It was a painful couple of years, but it's finally starting to look like there's serious upside here if we can bring in the right veterans and not overspend on pretty-boys.

As for attendance.. I'm looking to blame the conference we play in vs. the team itself. Yeah, the 80s teams were exciting, but we also played NE corridor teams all year. If we still played in the Patrick Division, we'd have better attendance. Bring back the Hextall v. Hunter rivalry, and you bring back the fans...

Posted by: Dez | November 16, 2006 1:29 PM | Report abuse

I agree with Dez. The attendance is directly related to not playing Northeast teams often enough. Regardless of what Bettman and the braniacs in the league office think, DC is much more oriented to northeast sports teams than it is to the south, and that is true for all sports DC plays.

Posted by: kthhken | November 16, 2006 2:16 PM | Report abuse

As a long-time and long-suffering season ticket holder I am very distressed at the attendance problems in DC. Each night before the games at Verizon center they show a video of "Caps History". I was watching a game from 1991 and the arena was full for a November game - a big difference from last night.
But other NHL teams are also having similar problems - the NJ Devils are lagging in attendance despite winning regularly and 3 cups. I think part of the answer lies with the NHL, its marketing and TV situation (or lack thereof).

Posted by: Joe | November 16, 2006 2:27 PM | Report abuse

Well, in 1991 we were still choking in the playoffs every year.

I remember when the Phonebooth opened, a lot of people said they would never go downtown for a game. I guess that part came true. The lockout could not have helped at all.

Not sure if the NHL's TV situation means anything to the Caps. Nationally, the Caps were never on (if it wasn't for Ovie, we still wouldn't be on nationally). And HTS or CSN have always had the games. If anything, the Caps are on TV more than they used to be, HTS was a premium service.

Posted by: tallbear | November 16, 2006 3:42 PM | Report abuse

I still don't think it's an issue of "people not wanting to come downtown".. (But I live in town, so I can't fully speak to that).. But look at how successful the restaurants in the area are and how they continue to grow, and to a lesser degree how full the parking lot is over at the big top on 11th St.

I still think, like baseball with the Sox, Cubs and Yanks, if you put the right teams on the schedule more often.. (Rangers, Islanders, Flyers, Bruins, etc) ...you'll get the fans to show up. (Then again, all of these teams have fallen off since the 80s)

I mean, yes we have some Carolina folks who'll come out, but the SE conference, even with recent Cup success, doesn't get those hometown fans from up North to come out.

Posted by: Dez | November 16, 2006 4:13 PM | Report abuse

Tarik - I've heard Ted say repeatedly how disappointed he's been in fan turnout - when Jagr was in town, after the Cup run. Is there any chance he's going to give up at some point, realize hockey's not for DC and move the team somewhere where it will be loved and appreciated?

I also remember back to the Cap Centre - that place was a dark, ugly bowl, but the Caps gave it character. I remember something like 28 out of 40 games sold out in the 91-92 season, which was a great year (Caps were 2nd in scoring...)

I have to agree that playing the Flyers and Rangers so infrequently (and Atlanta and Florida so frequently) definitely takes away from the attraction. The crowd against the Rangers on Saturday was pretty substantial - imagine that twice as often...why oh why are the Caps in the Southeast???

Posted by: katzistan | November 16, 2006 5:41 PM | Report abuse

Don't see how there is any possibility of Ted moving the team. Someday, he'll get the arena and he'll need a hockey team to fill dates. Also, they just signed a long term lease with Arlington for the new practice facility. Doubt Ted would've done that if moving is at all a possibility

Posted by: JOe | November 16, 2006 7:22 PM | Report abuse

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