- The Washington Times - Saturday, December 20, 2003

Washington Capitals owner Ted Leonsis is all too aware of the impossible nature of his situation.

“Even if we sell out every single game and win the [Stanley] Cup, we’ll still lose money,” he said.

With Leonsis’ Caps farther away from both achievements than at any point since the days immediately following his 1999 purchase of the club — and a NHL labor war brewing — the owner is still trying to forge ahead.

The Caps’ 23 points in the standings entering last night’s game were tied for worst in the league, and the team is well on pace for its worst season under Leonsis. But the owner is still talking playoffs and searching for new ways to fill increasingly empty MCI Center.

More fundamentally, Leonsis said yesterday his resolve to continue owning the money-bleeding club and funding a winner has not weakened, even as nearly every facet of the organization has fallen precipitously in production.

“What other choice do I have — quit?” he asked. “This franchise deserves a committed ownership group, and it has one. The bottom line is, we have to win. It’s simply not more complicated than that. Have we met our goals? Absolutely not. We have spiraled down. We have to win and give people a reason to come out, and in the meantime, I have to take the bad with the good. I knew what I was getting into when I bought this, and I’m going to own this team for 20 or 30 years.”

NHL and team executives, mirroring baseball from two years ago, have spent much of the last year painting a poor picture of the league’s fiscal health in preparation for the upcoming labor battle with the players’ union. And perhaps no team is as emblematic of hockey’s ongoing problems as the Caps.

The team plays in a top-10 media market, holds a top-10 payroll, has one of hockey’s most recognizable figures in Jaromir Jagr and plays in a 6-year-old downtown arena. Yet reported fiscal losses average about $20million every year with no end in sight. This season’s losses might even approach $30million.

Beyond hockey’s relatively weak ability to generate massive national broadcast contracts and attendance problems in several markets, the Caps do not have access to many key MCI Center revenue streams such as premium seat contracts that remain with Abe Pollin’s Washington Sports & Entertainment.

Leonsis, however, has not used his situation to rattle labor swords. Instead, he has withdrawn as much as possible from the sporadic talks with the union and fairly steady propaganda war. The current labor agreement expires in September, with a lengthy work stoppage expected.

“Quite frankly, our local situation is such a mess right now, that’s where my energies are at,” he said. “I have great confidence in [commissioner] Gary [Bettman] and the league leadership.”

To that end, Leonsis said he is now strongly considering an across-the-board ticket price decrease after this season. Average Caps ticket prices have increased 21 percent in the last two years, a time period that matches the arrival of Jagr and his $11million annual salary. And coupled with poor play during long stretches in that period, average attendance has fallen 14 percent to 14,895 since the end of the 2001-‘02 season. Season ticket sales have plummeted 20 percent to about 10,000.

“This is not just a Washington Capitals phenomenon. Pro sports has priced itself out of most people’s wallets,” Leonsis said. “It’s our No.1 problem. We’re not following Moore’s Law from computers and continually offering more and more for less and less. Instead, we’re charging more and more and providing less and less. We have to figure out a way to break out of that scenario.”

The Caps already were one of the first NHL teams to institute a low-cost section, called the Eagles’ Nest, where extreme upper deck seats are available for $10 each. The concept has since been replicated across both the NHL and NBA. But in Washington, even those seats do not sell out consistently.

“That’s really puzzling. A movie in Manhattan is $11. A movie in Tysons Corner is $8.50,” Leonsis said. “We can get you in a hockey game for 10 bucks. But it’s still pretty clear we need to provide more value.”

On related hockey matters, Leonsis said no substantive trade discussions have occurred in the last 60 to 90 days. Even if that changes, nothing will happen imminently as rosters will be frozen across the league from yesterday through Dec.27. The team desperately needs competent, experienced defensemen. And several high-priced veterans, including goalie Olie Kolzig, have been the subject of steady trade rumors.

General manager George McPhee, the subject of some fan scorn, received a vote of confidence from the owner.

“George is under contract, and I respect him,” Leonsis said. “He needs to build us a team that wins. But the blame is not his alone for what’s happening. Everybody involved, myself certainly included, is to blame. Winning is the best cologne, but when you lose, everything becomes subject to much higher scrutiny.”

Leonsis concurs with Caps players that a breath of fresh air has arrived with last week’s replacement of Bruce Cassidy with Glen Hanlon as coach. But Leonsis added he will be keeping a close eye over the next five weeks, a period that will elevate Washington from an NHL-low 12 home games to 25.

“We’re finally getting back home, and I think we’re going to learn a lot in this stretch,” he said.

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