When Monumental Sports & Entertainment purchased the remaining 67% stake of NBC Sports Washington from NBCUniversal last August, it marked a historic occasion for the enterprise and significant addition to its portfolio. The entity owns the Washington Wizards of the National Basketball Association (NBA), Washington Mystics of the Women’s National Basketball Association (WNBA) and the Washington Capitals of the National Hockey League (NHL), along with Capital One Arena and other sports franchises.
It made the prudential decision as the regional sports network faced increased scrutiny and turbulence, catalyzing a change in core business strategy. While teams were recovering from the global pandemic and compensating personnel with large contracts, the regional broadcast products were growing less profitable and subsequently confronted with an ambiguous future.
As evidenced in the past year, Diamond Sports Group, a subsidiary of Sinclair, Inc., declared Ch. 11 bankruptcy and is currently within an exclusivity window trying to restructure debt equating to more than $8 billion. Facing mounting pressure from professional sports leagues and distributors, the company has selectively rejected contracts throughout the process, a situation Major League Baseball foresaw prior to the start of its 162-game regular season. The uncertainty has precipitated obloquy towards Diamond, with an obfuscatory business strategy and structure presumably on the horizon.
Once a lucrative subset of sports media, some regional sports networks find themselves in plight as the industry’s ecosystem transitions with new technologies and refined consumption habits. Consumers have a variety of choices on many platforms, and brands are ultimately competing to earn shares of attention that convert into brand affinity and loyalty. By attracting viewers and transforming them into devoted fans, these networks are able to continue growing their reach and revenue while remaining relevant.
Zach Leonsis, Monumental Sports & Entertainment’s president of media and new enterprises, was heavily involved in the decision to grow its media ventures and involvement in the space. The company recently completed a full rebrand of NBC Sports Washington to Monumental Sports Network, introducing a lineup of new programming and functionalities, along with live game broadcasts of their local teams. If the model proves to be adopted by teams en masse, it is likely that Monumental Sports & Entertainment would be considered among the “innovator” category within the diffusion of innovations curve.
“We were certainly one of the first teams to buy our rights back, and we have seen several teams take their rights back moving forward as well,” Leonsis said. “I think that teams are well-positioned to do this, and there are a number of independents who have proven that they can manage distribution and provide a quality TV product for their fans.”
Over half of Monumental Sports & Entertainment’s yearly revenue emanates from media ventures both at the regional and national levels. Even before the abeyance of professional sports due to health and safety concerns associated with the global pandemic, the value proposition of teams owning their media rights was becoming more alluring and palpable in scope. Although it was difficult to completely offset some of the fiscal losses these leagues endured, the abridged and restricted return of sports in bubble formats sans fans helped recoup some of the expected profits.
“When you get a lot of change, it can present challenges, of course, but it can also present great opportunities,” Leonsis said, “and I think that our platform in Monumental Sports & Entertainment has been and continues to be well-positioned to take advantage of new investments [and] new acquisitions.”
Leonsis is an integral part of the company’s future, spearheading a revolutionary process to change the way consumers watch sports in the Washington metropolitan area and beyond. As the son of Ted Leonsis, owner and chief executive officer of Monumental Sports & Entertainment, he has studied and attained the erudition necessary to become a stellar businessperson, remaining cognizant of the present while thinking about the future.
Zach Leonsis earned his master of business administration at Georgetown University after matriculating at the University of Pennsylvania, receiving an undergraduate degree in communications and commerce. Through a combination of his studies and watching his father exercise his foresight and ability to interpret and thrive in situations of discordance, he recognized how essential it is to keep a broad point of view and not become consumed by one particular silo of business.
“We don’t operate any of our businesses individually,” Leonsis said. “We have one, shared collective leadership team that operates everything together [and] think that we’re stronger by doing that.”
Referring to the theory as the “platform effect,” Leonsis posits that the synergies and workflows within individual teams render seamless collaboration and amalgamate to form a strong final product. Through the utilization of that thereof, the vertical integration of portions of the brand can be actualized and made more effective. Furthermore, entities can engage in a comprehensive review of their internal strengths and weaknesses, along with potential external sources of windfall and affliction. In particular, Leonsis has focused on new technologies and initiatives, recognizing the company’s efforts to invest in sports betting, Esports and other growing spaces.
The company has had interest in its media properties for several years and was keenly observant of the hastened pace of cord cutting when it was negotiating its agreement with Comcast Corporation in the latter half of 2016. As a result, Monumental Sports & Entertainment worked with NBC Sports Group to create a digital sports and entertainment over-the-top (OTT) sidecar platform, which subsequently obtained an equity partnership in the venture. Shortly thereafter, the entity launched a direct-to-consumer (DTC) product offering live streams of games for the Washington Mystics (WNBA) and Washington Valor (AFL), its first experimentation in the space.
“I think we pride ourselves on being first-movers; we pride ourselves on being calculated risk-takers,” Leonsis said. “We’ve had a great track record of success, [but] we’ve had some failures too – we’re not afraid to admit that – and we’ll continue to operate in that same fashion moving forward with the quest to build the world’s most valuable regional sports and entertainment property.”
In completing the acquisition of NBC Sports Washington, Monumental Sports & Entertainment worked internally to develop a new identity and reinvent its airwaves. The company forged a partnership with brand agency, HZ, which helped develop the new logo, marketing campaign and other extensions. The network revealed its new slogan, “The game’s on,” and launched a brand video featuring the new look, along with on-air talent and highlights from its various properties.
In making this strategic business transaction, Leonsis felt it was an opportunity for the company to play both offense and defense. As it pertains to being on the offensive, being able to maximize the potential of the vertical integration and opportunity to reestablish the instantiation of coverage throughout the locale were points of benefit within the deal.
Monumental Sports & Entertainment completed equity financing since then and now has the ability to control its direction with ownership of the live and local rights. Because of this, the sports and entertainment firm has future opportunities within its own purview, whereas it worked with an external media partner and did not have as much latitude in this regard. No longer outsourcing regional coverage and distribution permits the company to focus on promulgating its assets and providing viewers with unrivaled, behind-the-scenes coverage.
“I think we really viewed it as an opportunity to buy our rights back as opposed to buy the network,” Leonsis said. “While the RSN business has had plenty of editorial around its demise, I would not conflate the demise of an RSN system with the value of the local rights.”
With rising team valuations and player salaries, there are concerns regarding the affordability of live sports. Certain marketplaces feature ticket prices that are not affordable to most fans, making the prospect of going to a game exceedingly rare. Teams often utilize a dynamic pricing model and have special promotions on seats throughout the year, equipping media channels as a means of promotion to drive fans to their venues.
Over time though, there has been a greater focus collectively placed on the viewing experience, hence the introduction of DTC platforms with innovations such as real-time advanced statistics and different commentary options. The consumer is being granted more control than ever before, a critical point of differentiation within the Monumental Sports Network DTC service, which was introduced earlier in October.
Through the platform, fans have access to multiple camera angles during live home games, along with the ability to rewind and replay action both in real time and slow motion. Moreover, the network has introduced a daily newsletter complete with news, scores and other information. The platform, which allows fans to watch Monumental Sports Network live on multiple devices, is currently available on the web, iOS, Android, Roku, Fire TV and Apple TV with more platforms to come in the near future.
“We used our preseason as a dress rehearsal and really a public beta to try to work through a lot of [potential] issues, and we think we made a tremendous amount of progress through that,” Leonsis said. “We’re going to be uber-critical internally of how we’re performing; we’re going to be reviewing how we’re driving subscribers, monitoring churn [and] watching viewership on the network on a daily basis, not even a weekly basis.”
Leonsis considers the entity fortunate to have received previous experience in this space so it is able to better serve the consumer and avoid some of the shortcomings and common mistakes made in the early stages of launch. In being able to leverage its properties at all levels of professional sports, the platform has the potential to benefit the District at large rather than solely fans of the area’s teams.
“We’ll continue to do additional work with local high schools and colleges so we can build out a real grassroots and amateur space community,” Leonsis said. “I think we have an opportunity to build this into a real community asset, and great programming begets great partnerships, relationships and the like, so we’re excited about what we’re investing back into.”
The Capitals, who captured a Stanley Cup championship in 2018, have a team with veteran talent headlined by forward Alexander Ovechkin, who is chasing the all-time NHL scoring record. Ovechkin netted his 800th career goal last season and currently sits just 70 goals behind Wayne Gretzky for the prestigious mark. The 38-year-old is quickly approaching the milestone as the team looks to thrive in the competitive Metropolitan division.
“We are documenting so much of his run – we had incredible footage from when he broke the 800-goal mark and when he broke Gordie Howe’s record, and I think our fans have an insatiable appetite for wanting to understand more from Ovi directly,” Leonsis said. “‘How does it feel? How do his teammates rally around him and what not?’ We’ll continue to leverage that behind-the-scenes access and tell that story.”
The company recently reached a deal with Robinhood, a financial services platform, to serve as the official jersey patch sponsor for the Wizards. Additionally, the brand will be featured throughout broadcast coverage, including as the presenting sponsor for Wizards Postgame Live. The transaction serves as an example of business opportunities and integration across the company in different areas of focus.
“We’ll all gain a bit more flexibility as we move forward,” Leonsis said. “We’ve fully integrated our ad sales team with our larger partnership team, and we’re seeing great uplift from that as well.”
Simultaneously, questions naturally arise regarding how genuine the coverage is in expressing news, information and opinions under the same roof as ownership. There are plenty of independent media outlets that cover sports teams, but there are some concerns about being able to proffer unbridled opinions and remain objective when consolidated in this sense.
Regional sports networks have rarely been solely owned by a professional sports team and often provide varied and deft opinions. Altogether, producing and propagating coverage through the same platform poses risks to equitable and impartial coverage, Monumental Sports & Entertainment points to other examples of ongoing instances – specifically those in New York City – that have proven successful in the space.
“Clearly there are best-in-class examples [with] networks like the YES Network and MSG Networks,” Leonsis said. “We have another independent network here locally in MASN – that’s our neighbor – and so our focus is going to be on delivering what we do best: behind-the-scenes access and really, really high-quality programming.”
Some regional sports networks launching direct-to-consumer platforms have created various purchasing options to grant fans more capability in selecting what they want to receive. For example, fans are able to purchase individual games on some services, gaining access to the proceedings as if they had a single-game ticket. Monumental Sports & Entertainment decided not to take this approach in an effort to mitigate difficulties and complexity, instead offering fans either a monthly or annual package. TV Everywhere subscribers can access an equivalent to the annual plan using valid login credentials.
“We didn’t slice things by team [and] we didn’t slice things by individual games,” Leonsis said. “We want to try to over-deliver [and] we want our platform to be intuitive to use.”
The first 10,000 subscribers to the annual membership package receive an exclusive, limited-edition bobblehead set of three which includes the aforementioned Ovechkin, along with Kyle Kuzma and Elena Delle Donne. Along with the bobbleheads, which play audio of game calls from Monumental Sports Network play-by-play announcers, all annual subscribers receive a score of other benefits. Some of these include a 20% discount off team merchandise and apparel, discounted tickets for a selected monthly game and pre-sale ticket access.
“I think about our direct-to-consumer offering like, ‘What is the Amazon Prime equivalent for our company, Monumental Sports?,’” Leonsis explained, “and that’s something that I think we are uniquely positioned to offer that might be more challenging for a third-party network.”
Leonsis knows that rights are going to be distributed in a variety of ways in the years to come; however, the mission for teams remains the same in generating interest. On average, Capital One Arena welcomes 3 million people through its turnstiles each year, and the teams are focused on providing a safe and enjoyable in-arena experience with a product that resonates with fans and keeps them coming back.
“We, as teams, are direct-to-consumer businesses ourselves,” Leonsis said. “We have millions of emails and names in our database here locally, and that better positions us to frankly grow and scale a direct-to-consumer product.”
Monumental Sports & Entertainment is currently in the process of constructing a state-of-the-art studio and production space adjacent to the arena set to open in Q1 2024. The two-story, SMPTE 2110 facility is set to include two studios with the ability to combine for certain broadcasts if necessary. Additionally, two insert studios and five control rooms will allow the network to produce multiple events in real time, an ability especially useful because of the frequent overlap between Wizards and Capitals games. Everything will be connected through cloud-based technology that will enhance the network’s capabilities to efficiently turn ideas into reality.
“We expect to improve and increase our video quality across all of our programs from 1080i to 1080p at 30 frames per second to 60 frames per second,” Leonsis said, “and we’ll be ready to go 4K when our distributors are ready for that too.”
The studio will also lend itself for producing ancillary programming surrounding the games, such as pregame and postgame shows, team-oriented news programs and highlight-based presentations. As part of the change, the network tabbed hosts Wes Hall and Alexa Landestoy to host weekly series for the Wizards and Capitals, respectively, and also reached a deal to bring Rachel Nichols to its airwaves to host an interview format series. Nichols covered the Capitals with The Washington Post during her formative years in the industry and currently serves as a contributor to Undisputed on FOX Sports 1.
“She obviously lends a lot of credibility, not just to the NBA but all of sports,” Leonsis said. “I think our athletes really, really respect her; our fans instantly recognize her and the cache that she’s brought, I think will do a lot for our air and perfectly complements the kind of brand that we’re trying to build.”
As a company, Monumental Sports & Entertainment is focused on building the world’s most valuable regional sports and entertainment platform. The company wants to surpass $1 billion in revenue, a goal Leonsis divulged that it is “well over halfway there” in attaining.
Through various endeavors and operating in the ninth-largest designated market area (DMA), according to the latest report by Nielsen Media Research, Zach Leonsis and the team at Monumental Sports & Entertainment are focused on crafting a product built for fans. By honoring tradition and staying focused on the future, the enterprise is excited about being able to shape its programming and broadcasts for years to come.
“We have some really exciting things ahead, I think, as we continue our transformation over these next few months,” Leonsis said, “and by the time we get to the beginning of 2024, I think fans are really, really going to be delighted with what they see.”
Derek Futterman is a contributing editor and sports media reporter for Barrett Media. Additionally, he has worked in a broad array of roles in multimedia production – including on live game broadcasts and audiovisual platforms – and in digital content development and management. He previously interned for Paramount within Showtime Networks, wrote for the Long Island Herald and served as lead sports producer at NY2C. To get in touch, find him on X @derekfutterman.
