Laurene Powell Jobs is buying a big stake in Wizards, Capitals sports empire
Laurene Powell Jobs, a billionaire philanthropist, entrepreneur and president of the Emerson Collective, is buying a significant stake in Monumental Sports & Entertainment, a sprawling $2.5 billion complex that includes the NBA Wizards, NHL Capitals and Capital One Arena, people familiar with the deal said.
Powell Jobs’s investment, estimated to be hundreds of millions of dollars, will give her the second-largest stake — about 20 percent — in Monumental, the 19-member, Ted Leonsis-led holding company that is one of Washington’s highest-profile enterprises, the people said, speaking on condition of anonymity because the deal has not been approved by the NBA and NHL
Through her sizable investment, Powell Jobs instantly commands an influential position in the male-dominated ownership circles of the “Big Four” professional sports leagues. Very few women’s names stand atop the ownership list of the NBA’s 30 franchises: Jeanie Buss of the Los Angeles Lakers, Ann Walton Kroenke of the Denver Nuggets and Gail Miller of the Utah Jazz.
Leonsis will remain the chief executive and largest stakeholder. He will continue to run the teams and affiliated enterprises under the Monumental umbrella, the people said.
“We have an agreement with Laurene Powell Jobs, founder and president of Emerson Collective, to join the Monumental Sports & Entertainment ownership group,” according to a statement that Monumental issued to The Washington Post. “The process is underway and is pending league approvals.” Powell Jobs declined to comment for this story.
Powell Jobs, 53, is one of the wealthiest women in the world, estimated to be worth about $20 billion. Much of that comes from her stock in Apple, the iconic company co-founded by her late husband Steve Jobs, who died in 2011. She also owns 4 percent of the Walt Disney Company.
The investment by Powell Jobs increases her presence in the Washington community after her business and philanthropic arm, Emerson Collective, bought a majority interest in The Atlantic magazine from its owner David Bradley in July.
Powell Jobs has previously been linked romantically with former D.C. Mayor Adrian Fenty. The two are no longer dating but remain close friends, according to people familiar with the relationship, who spoke on the condition of anonymity because the matter is personal.
Powell’s brothers, Brad and Greg, have more than a 30-year friendship with Monumental vice chairman Raul Fernandez, dating to their days at the University of Maryland, College Park, one of the people close to the deal said. Fernandez and Greg Powell overlapped as students.
Powell Jobs was part of a group that unsuccessfully bid on the Los Angeles Clippers a few years ago. At that time, Brad Powell told Fernandez that the Powells had an interest in sports ownership. The two began talking about bringing Powell Jobs into the group.
Powell Jobs wants to use her ownership as a vehicle to accomplish some of her social goals, such as improving education.
“Laurene and Ted share the same commitment to a double bottom line, that the best companies are those that do good in their communities,“ according to one of the people familiar with the deal.
The deal would require the approval of both the NBA and NHL. That could come this week.
Powell Jobs’ investment is part of a trend in which deep-pocketed financiers and Silicon Valley billionaires are buying stakes in professional sports properties, helping drive franchise prices to even greater heights.
The average NBA franchise value is $1.36 billion, part of a dramatic rise over the past five years, according to Forbes. Monumental has grown, too, thanks also to a local television deal that gave the sports empire a one-third ownership in Comcast SportsNet Mid-Atlantic, the regional sports network.
Forbes earlier this year estimated the Wizards’ value at $1 billion, but after recent sales in the league — including the Houston Rockets for $2.2 billion — the team is worth much more than that. The value of the Capitals has climbed, too, with an estimated worth of $575 million, according to Forbes.
Monumental has expanded under Leonsis and now includes the WNBA Mystics, the Washington Valor and Baltimore Brigade Arena Football League teams, investments in a variety of e-sports ventures, a sports facility in Northern Virginia and a new, 5,000-seat Wizards practice facility planned to open in Southeast Washington in 2018.
Powell Jobs and her vast wealth will likely enhance stability to Monumental’s ownership group. If Leonsis, 60, retired, Powell Jobs has the resources to assume his shares. Leonsis has long been the lead shareholder, with around 40 percent. Most contracts with a stake of this size include language that allows the buyer, in this case Powell Jobs, the option of a path to ownership.
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“Leonsis retains the largest share, is majority owner and remains chief executive,” said a person close to the deal. “Laurene was brought in for the growth and the future of the clubs. Ted will take Laurene’s counsel, and he will work to use the teams to benefit the city and the causes we all hold dear.”
Because of the dramatic increase in sports franchise values, Powell Jobs is almost certainly paying a higher price for shares in Monumental than current investors who have held stakes dating back from four years to 18.
None of the current shareholders is expected to leave Monumental, but some may be selling shares to Powell Jobs, people familiar with the matter said.
Asked whether Monumental shares were being diluted and if any partners were selling some shares, one source close to the deal said “everyone is committed to the future of MSE and remaining as partners.”
Monumental’s investors include some of the most prominent business people in the Washington area: Fernandez heads his private investment company Fernandez Group, philanthropist and BET co-founder Sheila Johnson, investor Fredrick Schaufeld, real estate scion Mark Lerner, whose family also owns baseball’s Washington Nationals, investor and philanthropist Earl Stafford, Capital One founder Richard Fairbank and real estate investor Michelle DiFebo Freeman.
Billionaires have jacked up franchise values for professional sports teams across the board. A game-changer was Microsoft chief executive Steve Ballmer, who shelled out $2 billion — of his estimated $30 billion-plus net worth — to buy the NBA Los Angeles Clippers in 2014. The Ballmer deal made NBA teams hot properties, culminating in the recent sale of the Houston Rockets.
The past few years have seen financiers buy up various professional sports teams across the leagues. The Boston Celtics, one of the NBA’s iconic teams, has a list of partners that include some of the biggest names in private equity and venture capital. Financiers also bought Major League Baseball’s Los Angeles Dodgers for $2.15 billion in 2012.
Billionaire investor Tony Ressler bought the Atlanta Hawks in 2015 for $850 million. Los Angeles investor Mark Attanasio owns the Milwaukee Brewers. Across town, the Milwaukee’s NBA Bucks are co-owned by New York-based hedge fund manager Marc Lasry.
Powell Jobs is investing in a league that is flush with cash, thanks to a $24 billion television deal with ESPN and TNT. It also enjoys relative labor peace with its players.
While saddled with a $200 million mortgage on its privately built, 20-year-old arena in downtown DC, Monumental is close to breaking even financially, according to people familiar with Monumental, who spoke on condition of anonymity because it is not a public company.
Leonsis is chairman of the company, an endeavor that began with his purchase of the Capitals from sports entrepreneur Abe Pollin in 1999 for $85 million. He also bought just under one-half of the Wizards and the arena at the time with a path to assuming full ownership one day.
That day came in 2010, following Pollin’s death. Monumental bought the rest of the Wizards and the sports arena from Pollin’s estate. The entire value of the NBA team and the facility was put at $550 million then.
Both the Wizards and Capitals have been on an upswing under Leonsis, although neither franchise has been able to capitalize on their regular season success in the playoffs. The Capitals have had a long run of success during the regular season, but haven’t reached the Stanley Cup Finals in 20 years. The Wizards have made the NBA playoffs seven times since 2000, but have failed to get beyond the second round.