Before explaining how—alongside a self-help author, a Hall-of-Fame hoopster, and the co-owner of the Golden State Warriors—he came to buy controlling interest in a professional e-sports franchise, Ted Leonsis laughs. “You’re going to have fun with this,” the Wizards and Capitals owner says. He is not wrong. The origin story is super silly.
On a Friday morning last February in Toronto, at a tech conference scheduled around the NBA’s All-Star Game, Leonsis walked into a hotel ballroom next to Peter Guber, the CEO of Mandalay Entertainment Group who co-owns the Warriors, Dodgers, and Galaxy. By then Leonsis had already been exploring the possibility of purchasing Team Liquid, a big name in the e-sports world that manages teams in 10 different video game titles like League of Legends and Dota 2. But when Leonsis began running due diligence, Liquid called and halted talks. In Toronto, Leonsis finally figured out why.
“I admire Peter,” Leonsis says, reaching the part we’re supposed to have fun with. “I like him very much. I was sitting next to him and I looked in his ear, and I said to him, 'Fredo, I knew it was you, you broke my heart,' which is a line from Godfather 2. And he looked at me, and said ‘What are you talking about?’ I said, ‘You’re buying Team Liquid.’
“And he looked at me, with his mouth open, and he said, ‘I have no comment. Don’t ask me anything.’ And I said, ‘You are, aren’t you?’ He said, ‘Ted, I love you, but I can’t say a word.’
“He called me a couple days later, he said, ‘How did you know?’ I said, ‘I didn’t. I looked into your ears. I saw it in your brain.’ And he laughed and laughed. ‘That was amazing,’ he said. ‘I know you know a lot about the space, I’m learning about the space, what do you say we try to do this together?’ That was the genesis of it.”
Leonsis and Gruber’s purchase under the ownership group aXiomatic, which among other investors includes Tony Robbins and Magic Johnson, was made official Sept. 27. It coincided with another sports-to-e-sports crossover, the Philadelphia 76ers’ purchase of interest in the Team Dignitas and Apex franchises, and marked a significant influx of high-powered executives into the virtual world.
In a wide-ranging conversation with SI.com this week, Leonsis discusses his foray into video games, the 2018 Winter Olympics, the Capitals' and Wizards’ upcoming seasons, and a recent trip to a Green Day concert:
Alex Prewitt: What have you made of the lack of agreement between the IOC, IIHF and NHL concerning the 2018 Winter Olympics? Several of your players, including Alex Ovechkin, have said they intend to attend regardless of sanctioned NHL participation.
Ted Leonsis: Many of the players love playing for their country and the Olympics. You just saw that with the World Cup. It was a meaningful tournament, and the players played really, really hard, and the ones who lost were incredibly disappointed, and the team that won celebrated like it was an important victory. I think it’s always a question of alignment on players, union, the league, owners. That’s the pecking order, and they have to work it out and decide.
To me, and this always comes up around Alex: When I first met Alex, and his mom and dad, they talked about the Olympics. The Olympics are incredibly meaningful to Alex and his family. So my commitment to them was, I will always do what’s in Alex’s best interest, and I said it 10 years ago, I’ll say it today: If Alex Ovechkin says this is really important to me to go represent and play for my country, I’m going to support him. What’s the worst that could happen? We’ll get fined or something. I hope it doesn’t get to that. But I’ve got to have my captain’s back, and I will.
It’s a players’ league. The fans come to see the players. They don’t come to see me play. But the players have to realize, is it good for the game? Is it growing the game? There’s the risk of injury. They have to weigh all of that. The union has to weigh all of that. The stakes get higher every four years. There’s more revenue. The players get paid more money. It’s a big business. And so I think it’s almost every four years, you have to have that gut check, and the union and the league and the players and the owners, we all have a voice. But to me, the overriding voice is of the players.
AP: This figures to be an intriguing season for both the Capitals and Wizards. On the ice, several key contracts expire next summer and GM Brian MacLellan has stressed the “window” that’s open to this current group. On the court, a new coach is here in Scott Brooks. As an owner, watching from above, what do you expect from both teams?
TL: When you’re doing really, really well—the Caps didn’t change much during the off-season. You have to do your gut-check and realize we had the best record during the year, and then we lost in the playoffs to the eventual Stanley Cup winner. We tweaked a little bit, maybe a young player makes the team, we make one trade, but we did not make an inordinate amount of change with the Caps, because we have confidence in the team and the organization, and we think we can be one of the best teams in the league.
I know Mac has talked about our window. We have a unique moment in time where we have a really good mix of young players with upside, with veteran players, and we’ve managed to cap well. And we have good goaltending and good special teams and good defense. The team has been together with a good coaching staff, and shame on us if we can’t punch through. Right? That’s what I think we all feel.
AP: And the Wizards?
TL: We don’t know yet. We think we have the makings of a really fine team, because we have a really good young backcourt. Bradley Beal’s still a very young player, and John [Wall] is just coming into his prime. They have the ball in their hands all the time. We have two young wing players in Otto Porter and Kelly Oubre; they’re very young and have upside. Markieff Morris has upside too. Now we’re one of the bigger teams in the league. If you have two All-Star guards—John’s been a three-time All-Star, but can Bradley break through?–you should have a good team.
Are we one player away? Two players away? Is this team good enough? That’s what we’re going to find out. We like our coach and our coach likes our team. When you’re a new coach, you can be critical because you didn’t pick the players and he likes our team, because he likes versatility, thinks we can play 8, 9, 10 players and withstand injuries because we have a lot of depth.
We thought we needed to make a lot of change, and the biggest was in coaching staff. I’m sure they’ll implement a new system. And we have a whole new bench. So there, we had a catalyst for change, which was our dissatisfaction with our previous season and we didn’t meet our goal.
AP: As someone involved, at varying degrees, with the NHL’s Las Vegas expansion team–working on the executive committee, serving on the Board of Governors, employing new Vegas GM George McPhee for almost two decades with the Capitals–what do you expect from this new franchise?
TL: I admire and respect George McPhee. I think he’ll build a fantastic organization and he’ll build the team the right way. In the new NHL, the way they’ve made the rules, my bet is Vegas will be a competitive team very, very fast, and that the league would encourage that. Maybe we’ll expand again, and you want people who are buying teams in professional sports leagues to believe that they can be competitive quickly. I think Vegas will be good, fast.
Bill (Foley, the Vegas owner) is a great man, loves the sport. It’s an interesting market. We thought this would be exciting and it’ll be good for the players, good for the union, good for the league and owners. I think it’s been executed very, very well.
AP: Moving to e-sports, what led you to buying Team Liquid? What signs told you this was a wise business decision?
TL: My view was: Something big will happen. And as competitive gaming becomes more understood and accepted, then leagues and teams would be natural outgrowths of that. And in 10 years, 20 years, 30 years, you could see that gaming could be the fifth or the sixth league. You could see that these teams could become, like the Capitals or the Wizards, part of leagues and there will be media companies and stars and unions and all the things that we’ve experienced and grown up with in the NBA and the NHL. Those experiences will be replicated but with a twist for e-gaming. I just felt that the time was right, and that the opportunity was still so nascent and the slate was blank on many of the issues leagues face, that perhaps we could provide some influence and be positive influences around the business model and the way the leagues develop.
AP: What impact do you think professional sports owners migrating into e-sports, like yourself and Peter, can have on digital gaming becoming more mainstream?
TL: It’s not mainstream yet to me. There are some things about it that I think need work. It’s a little exclusionary. There’s more women than men in the world, and we need to find a way to make this broader and more mainstream and encourage women to work in the industry and design in the industry and play more. Until you can cross over and be a sport that both men and women can work in and excel in and play in, that’s something we all have to work on. I’m surprised there’s not more diversity. I’m disappointed in that and I’d like to activate and make sure that a lot of black colleges and Latinos are being exposed to these games and to the sport. That’s how we’ll mainstream the sport, so it’ll be inclusionary instead of exclusionary.
Today, in this one meeting [with a business associate whose name Leonsis asked to keep private], I mentioned Team Liquid. He’d never heard of Team Liquid. He didn’t really know what e-sports were. When I was explaining to him that you can go to YouTube and watch a great player explain to you some moves, or what he’s anticipating coming around the bend, and 100,000 kids will watch that and find that instructive. I said, imagine one day John Wall does that, he’s doing a tutorial on how I dribble behind my back and how I get the spin on the ball, and kids are watching an they’re looking at it and they want to inculcate these moves into their junior high school and high school and varsity play.
That’s what this business is about – people share information, and they’re admired. That’s why on Twitch [a streaming service] people will be watching more e-games than Olympic sports. That’s the sound bite that got everyone’s attention in August, that more people were on Twitch watching people play e-games than they were watching Olympians on NBC.
AP: As someone who’s pretty upfront about his fandom for his teams, have you thrown yourself into Team Liquid? Are you watching gamers streaming? Tournaments? Where’s your level of interest for e-sports itself?
TL: I’m already reading the blogs. You get sucked into it. Today I had breakfast with Kevin Plank from Under Armour. And we talked about the NBA and the AFL and e-gaming. I was explaining to Kevin about the houses and training, and Protect This House, and he needs to get these kids outfitted in Under Armour wear. I was talking to him about AFL and Team Liquid and the Wizards, and he joked and laughed and said, ‘You’re sounding like an evangelist and you’re all excited about the team.’ Of course! We’re owners of the team and we’ve fallen in love with the players and coaches and the people we’re meeting in the industry.
I’m going to be authentic. I’m just not going to be a phony. I’m not going to tell you that I’m an accomplished player when I’m not, right? But I’m not a former hockey player and I love the game. At some point, after 20 years and 100 games per year, and all the reading you do and film you get exposed to, at some point someone will say, ‘Yeah, I guess he knows a little bit about hockey.’
AP: Last question: What’s your favorite Green Day song?
TL: I loved the entire concert. I was concerned they were going to jump the shark. They went from really authentic to playing big, big stadiums and they were getting away from their roots. That they did this small club tour, I thought, was very important and very meaningful to them. I think they played their first time at the 9:30 Club in 1984, opening for Bad Brains. So they’ve been around.
“Boulevard of Broken Dreams,” I like. “American Idiot,” I like. I just think the band connects in that new-poppy way, in that they can sing a ballad and then turn that ballad into a really loud anthem theme song quicker and faster than any band around. I was really impressed with how tight the band was. The energy in the room was high. The crowd-surfing was going on, so I really enjoyed it. I was probably the oldest person in the room. But it keeps me young. Between e-sports and Green Day, I’ll be forever young.