Ted Leonsis is the majority owner of the NHL's Washington Capitals, NBA's Washington Wizards, WNBA's Washington Mystics, Arena Football League's Washington Valor and the Verizon Center in Washington D.C. He is the man to know when it comes to sports in the capital of the United States. Twenty-three years ago, Leonsis was the king of another industry -- technology -- when he served as President of America Online (AOL).
Today,Leonsis has figured out a way to combine he passion for competition and technology by investing in an e-sports franchise, Team Liquid, alongside his friend and partner Peter Guber, co-owner of the NBA's Golden State Warriors. Leonsis bases his decision to invest in e-sports from business experience and family relations. He also wants to be among the first to have equity in an industry that is prime to explode.
"The real benefit was being at the birth of something real and new that's global," said Leonsis in a candid interview concerning his purchase of Team Liquid. "The first step was, let's get a seat at a table, be polite and learn about e-gaming and what it could hold. Could a league emerge, and what will that mean? Are there branded products and hardware we can be licensing? What intellectual property can we develop on our own?"
"It is just an exciting time to enter e-sports," added Leonsis, who is somewhat of a historian of the gaming industry.
He recounted AOL originally being founded as a company called Quantum Computer Corporation with a mission to create a community of power Atari game console users in 1987. Years later, when Leonsis was President of AOL, one the largest communities on on the platform was comprised of gamers. He notes that AOL even boughts a company from AT&T called Worldplay, which was one of the first multi-player gaming environments.
Leonsis is not just another entrepreneur getting into the world of e-sports. He has lived it for decades and is now surrounded by it through his family.
"My family went to London over the Summer," started Leonsis on a story. "We jump on the plane flying back in first class. My wife has five big magazines that she's combing through. I'm reading a book. My son's fiancée has a big stack of work papers. My son kind of kicks back, has his iPhone, and is basically shooting aliens for five hours. My son grew up playing video games and multi-user games."
That really resonates with Leonsis. He realizes that every person thirty years of age or younger has grown up with video games. He compares it to growing up and seeing his parents watch the Lawrence Welk Show, which debuted in 1955 and lasted until 1971.
"I would watch like five minutes of it and go downstairs and listen to my Rolling Stones and Beatles albums," said Leonsis. "I didn't get them and they didn't get me. My mom thought the Stones was noise. It was a generational divide. The e-gaming community is incredibly gifted and talented, and young kids get it, and our work here will be to make sure it develops the right way."
Leonsis' plan is to make sure e-sports competitors are treated well while creating a media industry around e-sports that has scale and meaning. He also believes that he will be able to use his resources to make merchandise and sponsorship in the industry more relevant and worthwhile.
"In the month of August, more people were on Twitch watching videogames than watching Olympics on all NBC channels," said Leonsis. "I liken it also to the early days of the Internet when we said, 'Hey, there might be something to email.' I remember the first time I demo'd instant messaging to somebody. They couldn't get it. Why would I type a message instead of picking up the phone?"
He thinks there are a lot of similarities between how people perceived instant messaging at its birth and what many make of the e-sports industry today. If Leonsis is correct, then he will not only make a handsome profit on his new holdings, but also benefit his existing businesses.
"We're launching Monumental Sports Network . . . covering e-gaming, blogging, and interviewing the players is a way to drive value to the league and team, but also value to the network," explained Leonsis. "I'm sure one day there will be big tournaments and tours. Where are they going to go? Big millennial cities and also cities with technical infrastructure with a need for very high speeds in the city and into your building. Washington D.C. is most wired fiber, broadband city in the country. It also has the most millennials per capita of any city in the country. I'm sure one day there will be tournaments here in the Verizon Center."
Importantly, Leonsis' entrance into e-sports is not something that was simply crafted overnight. Leonsis met Steve Arhancet, co-CEO of Team Liquid, eighteen months ago and even had him as a guest at a Washington Capitals game in February.
"I even put up a picture [on Twitter] to see how smart people were," joked Leonsis.
The discussions surrounding an investment in e-sports started many months ago. Unbeknownst to Leonsis, his friend Guber was speaking to Arhancet at the same time. Thus, a partnership between the friends was formed, with an initial target of Arhancet's team, but many more acquisitions to come in the future.
"The thing that attracted me most is that the world's best coders and graphic artists and storytellers and network managers, they're all being attracted to the e-sports business."
Leonsis thought about the early days at AOL and could not resist getting back into the world of competitive video gaming.