Monumental Sports & Entertainment (MSE) has been busy this year, last week announcing the move to Northern Virginia by the NBA’s Washington Wizards, NHL’s Capitals and Monumental Sports Network, while today sharing the news that the Sports Business Journal (SBJ) gave their network the “Best in Local Media” award for 2023. The honor was part of SBJ’s fifth-annual “Year-End Awards,” which recognize the most notable people, moments, companies, and places in the sports industry. The move to a $2 billion entertainment complex in Alexandria, VA, was negotiated over the past couple years at the same time ongoing negotiations went on with the District of Columbia to keep the teams at Capital One Arena, also owned by Monumental. MSE plans to invest $403 million for an Entertainment District full of advanced technologies, featuring a futuristic arena for the teams, Wizards practice facility, global headquarters for the company, an updated broadcasting studio, an expanded esports facility, a performing arts venue, residential, restaurants, retail, hotels, conferences, community gathering spaces, and perhaps 30,000 jobs over the next several decades as part of the package. The Arena, Phase 1, and future phases of development are estimated to generate a combined $12 billion in economic impact for the Commonwealth and City of Alexandria. if approved, look for groundbreaking in 2025 and the Entertainment District launch in late 2028. This public-private sports business arrangement between the Commonwealth of Virginia, MSN, the City of Alexandria, and JBG SMITH, is pending legislative approval and is supported by VA Governor Glenn Youngkin. Leonsis and MSN are said to have asked D.C. officials for $800 million in public funding for major renovation plans. Shortly after, the owner announced the plan to move to Potomac (Ship) Yard. For the record, the Sports Techie community blog is against public funds being used to assist with the construction of new stadium, arena and entertainment projects. The “Best in Local Media” award was selected by the editorial staff at SBJ and is featured in this week’s print edition, on the SBJ website, and social media channels. 2023 marked the second year that an award was given in this category. YES Network won the inaugural honor last year. The year 2023 was indeed historic for MSE.
“This year was a transformational period for Monumental Sports Network, as we worked to maximize the value of our newly reacquired local rights and create a best-in-class viewing experience for our subscribers,” said Zach Leonsis, President of Media & New Enterprises at Monumental Sports & Entertainment. “Our goal is to build the best local media platform in sports and this honor reflects the significant investment we’ve made in our fanbase.”
MSN Digital Expansion
There are 8 million people, hundreds of corporations, and plenty of SMB’s in the greater D.C. region for Monumental to brand, market and sell to, digitally. And that, they successfully did.
Monumental’s portfolio counts the Washington Mystics of the WNBA, minor league basketball and hockey teams, partial ownership of esports franchises, arenas, including Capital One Arena. and their regional sports network. Monumental Sports Network is also the TV and digital home to the NBA G League’s Capital City Go-Go and the NBA 2K League’s Wizards District Gaming as well as exclusive behind-the-scenes content and original sports and entertainment programming. The network also boasts the most comprehensive regional high-school and regional collegiate Division II-and-under sports programming in the greater Washington D.C. metro area, including on HBCU Go.
In August of 2022, the network acquired full ownership of NBC Sports Washington from Comcast/NBC Universal. The network now owns the local broadcast rights to the Capitals, Wizards and WNBA’s Washington Mystics, and have since undergone an extensive transformation into a state-of-the-art digitally focused media platform.
In addition to the brand and programming enhancements, Monumental Sports Network created a new digital streaming experience to replace all legacy apps and websites. The fresh digital platform – optimized for desktop, tablet, and mobile – allows fans to enjoy enhanced experiences for live streaming of games and their respective pre- and post-game shows, on-demand programs that they can add to their watch list, articles and blog posts that cover the latest Capitals, Wizards, and Mystics news, access to advanced statistics, ticket integrations, and more. For fans without cable subscriptions, in October the network executed the rollout of the D.C. region’s first-ever direct-to-consumer (DTC) service for local sports fans without a Pay TV subscription.
“To receive such a notable accolade in our first full year of operation speaks to how quickly our network has established itself as one of the industry leaders in the regional sports network landscape,” added Leonsis. “I want to thank SBJ for recognizing our state-of-the-art platform, which is the product of countless hours of work from our team of talented, dedicated network employees.”
Monumental Sports & Entertainment’s largest piece of investment in the network has not yet been unveiled. In January 2024, the organization will open a state-of-the-art production facility and studios located adjacent to Capital One Arena in downtown Washington, D.C. The two-story, SMPTE 2110 facility will feature two major league quality studios which can combine on non-conflict nights to create one single regional telecast worthy experience.
“For us, this is all about expansion, fan engagement, improve the fan experience,” said Jim Van Stone, MSN, President of Business Operations & Chief Commercial Officer.
The “Best in Local Media” award was selected by the editorial staff at SBJ and is featured in this week’s print edition, on the SBJ website, and social media channels. 2023 marked the second year that an award was given in this category. YES Network won the inaugural honor last year.
Greater D.C. Fanbase
Fans and season ticket holders living in the district and Maryland may not be willing to travel to Virginia. The fact that the potential new site is only four and half miles away from Capital One Arena, and a mile and half away from the border to the district is indeed a selling point unless you hate traffic.
The idea of infrastructure development, including transportation to the Potomac area seems to be a positive. D.C. Mayor, Murel Bowser, wants to save the partnership, that is most likely a no go at this point. Monumental wants to inspire the market with a complete, new arena and entertainment center. Tax income the city is losing with the move by the teams is said to be offset by increasing booked events at Capital One Arena.
Welcome To Alexandria
Located on the Potomac River just across from Washington, D.C., the Entertainment District is easily accessible by all modes of transportation and is minutes from the newly opened Potomac Yard-VT Metro Station, Ronald Reagan National Airport, community bike paths and foot trails, and underground parking. Joining National Landing as part of Potomac Yard, the Entertainment District will be adjacent to the Virginia Tech Innovation Campus and near Amazon HQ2, creating opportunities for unique partnerships between MSE and Virginia Tech focused on entrepreneurship, sports analytics, immersive technologies, and innovative new business and media strategies.
“This is the most visionary sports and entertainment development in the world, bringing together entertainment, sports, and technology in the most advanced innovation corridor in the United States: a once-in-a-generation and historic development for the Commonwealth, sports fans, and all Virginians. The Commonwealth will now be home to two professional sports teams, a new corporate headquarters, and over 30,000 new jobs – this is monumental,” said Governor Glenn Youngkin. “This was only made possible through consistent collaboration between Virginia’s economic development team, the Monumental Sports & Entertainment team, the City of Alexandria, our administration and the Virginia General Assembly’s Major Employment and Investment Project Approval Commission, and JGB SMITH. Virginia is undoubtedly the best place to live, work, raise a family, and now watch basketball or hockey.”
In the upcoming General Assembly session, legislators will be asked to approve the creation of a new Virginia Sports and Entertainment Authority. The $2 billion transformational investment will be supported through bonds issued by the to-be-created Authority, as well as a $403 million investment by MSE. The bonds will be repaid through annual rent paid by MSE, arena parking revenues, District naming rights, and incremental taxes generated by the Arena and Phase 1 development. There is no upfront investment or inclusion of any taxes already being collected by the Commonwealth to repay the bonds and there will be no tax increases for local residents. The City of Alexandria will also contribute $56 million toward the construction of the performing arts venue in partnership with MSE, and $50 million toward underground parking development. The land and buildings will be owned by the to-be-created Virginia Sports and Entertainment Authority. The Virginia Sports and Entertainment Authority will enter into a 40-year lease with the company.
The project includes $110 million in on-site infrastructure including site development and roadway, signal, and intersection improvements funded through the bonds. VDOT, Alexandria DOT, MSE, JBG SMITH, and transportation consultants continue to refine a detailed analysis of the National Landing corridor needs, with input from regional partners, the business community, and residents to ensure a safe, reliable, and successful Entertainment District. Potential transportation improvements will focus on transit, roadway, smart mobility, and neighborhood protection.
Multi-Sport Ownership
Capitalizing on the passion of sports fans, and those of hungry cities and states that want professional sports teams, drives owners like Ted Leonsis, who said he’s aiming to build “the world’s most valuable regional sports and entertainment company,” pegging the value at $10 billion to $15 billion, and seeing potential for an IPO. Leonsis went further to say to CNBC that in his view, sports organizations like his remain undervalued, as they should be viewed more like SaaS businesses with recurring revenue lines like ticketing, sponsorships, and media rights. Is demanding and then accepting American public funding to help make these deals happen, part of the undervaluation process?
Leonsis sold a 5% stake in Monumental earlier this year to the Qatar Investment Authority. The deal valued the organization at around $4 billion, a far cry from the $10-$15 billion he believes is Monumental’s value. That is a $10 billion increase in value in about one year. This business model was also significant in that it paved the way for additional investment by sovereign wealth funds into U.S. sports properties. This model piggybacked off the ability of private equity firms and funds investment to purchase team stakes in most leagues as has soared in the past 5 years.
Leonsis is quoted as saying that QIA is, “treated as investors, not partners, as it is a totally passive investment,” but he did note that he could see the potential for more sports teams and organizations to go public as these types of investments come in. More money invested in sports media and teams by the 1% world yet the cry for public funding is still strong. Try and make sense of that because I cannot.
Billionaire Welfare?
The fact is, these sports team owners are billionaires, and although it is how business operates, playing cities and states off on one another to get the best government backed, sweetheart financing deal makes little sense to me when the entities can afford it themselves, and by doing so, then completely own the teams, facilities and entertainment districts, as is happening in similar deals.
I was on the stadium campaign team for Paul Allen for Referendum 48 when the citizens of Washington voted whether to use state taxes to help fund the public and private arrangement for a new stadium. The state-wide referendum passed by only 1.5% keeping the Seahawks in Seattle despite Allen being one of the richest people on the planet at the time. The Supersonics were in my words, highjacked from Seattle to Oklahoma City in 2009, in a move then NBA Commission David Stern is said to have regretted over time, especially since then team owner, Howard Shultz, the founder of Starbucks, had promised he would never sell the team to someone that would move it. Clay Bennet, last week won a proposition voted on by only 41,000 voters to fund a new $900 million downtown OKC arena of which only $50 million will come from Thunder ownership. I drove through OKC this summer and understand why they need the team to stay, but at what cost and what benefits because projections of economic windfalls are said to be inflated.
Here in Atlanta, public money is given away to billionaire sports team owners without any public vote. The Falcons and Atlanta United (MLS) gave owner Arthur Blank, $700 million in public sports subsidies for Mercedes-Benz Stadium. Blank first began to solicit public funding as a gift in 2013 despite his enormous fortune generated from co-ownership of Home Depot. Taxpayers are also responsible for stadium upgrades to keep up with the Jerry’s (Jones) even though he and his estate, retain complete ownership of both the stadium and land. The Hawks received $142 million from public funding to pay for $200 million in State Farm Arena renovations. The granddaddy of them all was the hometown Braves deal for their new stadium, Truist Park, and The Battery, a mixed-use community, at an estimated cost of $722 million. About $330 million was paid for by the team owned by Liberty Media, a publicly traded company, and $392 million paid for Cobb County that added $50 per year, per household, with an additional $15 million per year paid by the county. The Braves pay only $6.1 million yearly for rent to the county, just a wee bit less than the cost of a $4.9 million average MLB player salary. The Braves moved from Turner Field after demands for capital improvement, transferring of Ted ownership to the Braves, and a public/private partnership to develop the area around the ballpark, which the Braves wanted to control, never happened, and the threat of bailing out of Atlanta and building a mixed use community near the majority of their fanbase, happened. This deal sounded like no deal at all because the Braves never gave the City a chance to counter any offer. Is Monumental perhaps doing the same with D.C. and the move to Alexandria? I have no idea but some fans on social media platforms believe so.
The Minnesota Vikings were awarded $498 million for a new $1.4 billion stadium. The corrupt deal involving the Rams move from St. Louis to Los Angeles, ended up in a $790 million fine paid to the ripped off city by the NFL and owner, Stan Kroenke, after four years in court. Las Vegas paid $750 million of the $2 billion needed for the new Allegiant Stadium to move the Raiders from Oakland. The Governor, the state of Nevada, the county, the team and the league, agreed on $380 million in public financing as part of a new $1.5 billion stadium deal with a retractable roof for the A’s, also taken from Oakland.
Are you finally seeing a public funding for stadiums pattern for billionaires and corporations that probably don’t need it?
The New Stadium Funding Way
Privately funded stadiums and the arenas are the only way that makes sense to me with regards to supporting the financing of new sports infrastructure projects. The Rams and Chargers play in a $5 billion project consisting of new SOFI Stadium, shopping areas, hotels and offices, all funded by the NFL and Kroenke. The Clippers owner, Steve Ballmer, is using his Microsoft made, pile of money to privately fund a new and futuristic arena in Los Angeles at a cost of $2 billion.
QIA
Why is Monumental asking for public money from D.C. and Virginia simultaneously, instead of logically, asking the QIA for more investment capital. They definitely have it.
This week’s announcement at COP28 that nearly 200 nations around the world are to begin to transition away from fossil fuels in a substantial climate deal is good news for global sustainability. This means the wealthy sultans of the Middle East and their aggressive investment funds, will continue stepping on the gas while they can to further diversify their billions in capital earned from the sale of crude oil into money making endeavors like sports teams and sports media businesses. Think, LIV Golf and the PGA as a good example.
Sports Techie, I congratulate Monumental for winning the title of “Best in Local Media” in 2023 awarded by SBJ. The question remains, what will their local media look like in the near future? Because with the move from D.C. to Northern Virginia, it won’t be what it was to win this award.
One thing is unclear, as the era of the regional sports network (RSN) is in trouble, as in Diamond Sports Group, the largest owner of RSNs and owners of Bally Sports, who also filed for Chapter 11 bankruptcy despite owning the TV rights of 11 MLB teams. Amazon is reportedly interested in investing in DSG so MLB games can be streamed live on Prime Video. What does the present status of DSG mean for Monumental and their growing business model? Rumor is they want to also own the Washington Nationals.
The other story I squeezed in about the move to Northern Virginia obviously troubles me because it doesn’t have to be that way. Instead of playing off D.C. with Alexandria to see who will cave in with the best public funding windfall masquerading as a public-private investment, why can’t Monumental simply ask the QIA for the drop-in-a-bucket, additional $800 million to make this deal for the fanbase of D.C. and to keep what the fans and local sponsors helped to build with their passion for sports. Perhaps they never wanted to much like the Braves.
You know that Commanders are going to ask for public money for a new stadium next. Where does this billionaire welfare for stadiums end?
With the demand of privately-funded stadiums, arenas and entertainment centers by government officials and the necessary votes by concerned and informed citizens.
That’s how and the only way.
See you later sportstechie in Seattle, Atlanta and around the world!
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