- The Washington Times - Wednesday, March 20, 2002

Washington Capitals officials tacitly acknowledged yesterday's trade of center Adam Oates takes them out of the playoff chase. That change in strategy will come with financial consequences as each round of the playoffs means about $1.5million in revenue to a typical NHL team, and owner Ted Leonsis budgeted for at least one round of playoffs.
Playoff hockey is particularly beneficial to NHL owners because ticket prices, attendance and concession sales all rise dramatically and salaries plummet. Players instead are paid through league-run compensation pools at rates far less then their regular-season salaries.
None of that will likely happen in Washington. Five points out of eighth place in the Eastern Conference race, the team's party line is still that the postseason is possible. But general manager George McPhee yesterday admitted the team has an uphill fight now that their leading scorer is gone.
"We have to be realistic. Five points doesn't sound like much, but it is," McPhee said.
The lack of playoffs and the corresponding revenue will have several immediate results for the Capitals. First, Leonsis' projection of star forward Jaromir Jagr essentially paying his own $11million salary through increased team revenues will not come true; the prediction was based in part on expectations of a deep playoff run. Second, Leonsis budgeted at least one round of playoff revenue for the first time in his three-year ownership of the Caps. And without that money, the Caps will lose more than $10million for the third straight year.
Leonsis yesterday downplayed the gloomier financial projections, saying a non-playoff hit would be "small." But last week in a separate interview, he said missing the playoffs "would definitely be a problem."
"We now sell more than 60 percent of our tickets over the Internet, and we have the losses just like the dot-coms, too," said Leonsis, who bullishly approved yesterday's deal.
Even without the playoffs, the Caps have made significant progress across most of their lines of business. Attendance has increased more than 13 percent to 17,204 per game. Season ticket sales continue to rise and now stand at about 12,000. And TV ratings for Caps games on Comcast SportsNet have doubled from last season.
"We have the nucleus of the team together: Jagr, [forward Peter] Bondra, [defenseman Sergei] Gonchar, [defenseman Brenand] Witt and [goalie] Olie [Kolzig]. We didn't touch that nucleus," Leonsis said.
After losing Michael Jordan as an equity holder in September, Leonsis rebuilt his ownership group in October with the addition of AOL executive Jack Davies, Bethesda software executive Richard Kay, and investment banker and team attorney George Stamas as partners.

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