Monumental Sports’ Zach Leonsis: Reaching the Next Generation of Fans is More Important Than Ever

Washington fans placed bets at William Hill betting windows inside Monumental Sports & Entertainment's Capital One Arena in August. | AP PHOTO/ANDREW HARNIK

By Zach Leonsis 

While growing our core assets and best-known brands, like the Capitals, Wizards, Mystics and Capital One Arena, we at Monumental Sports & Entertainment have also laid the groundwork for reaching the next generation of sports fans. For years now, we have focused our personal and corporate investments on companies operating within three key growth sectors: streamingesports and gamification. Those were the three areas of focus during our recent Sports Capital Symposium, a two-day virtual event of industry leaders that drew more than 3,500 participant registrations globally—evidence of the great interest on these topics. These verticals presented significant upside pre-pandemic; now, I believe the pandemic will only accelerate their adoption.

Let’s start with streaming. We all know that streaming isn’t a trend that will eventually fizzle out. It’s here to stay, and the biggest companies in the world are competing for our attention. You might think that I would be quite pessimistic about the linear cable-verse’s prospects, but I’m actually not. The bundle has never delivered greater value to paying customers, and linear still provides sports leagues and teams with the overwhelming value. But I do believe that creating a symbiotic ecosystem between linear and digital distribution is more important to our future than ever before. The cord-cutting phenomenon is widely reported, and sadly the pandemic will only add fuel to this fire. Companies that previously launched sidecar OTT networks to build a secondary direct-to-consumer subscriber base, like ESPN with ESPN+ and NBC with Peacock, are going to be rewarded. Since mid-March, Twitch has reported a nearly 20% increase from its previous quarter in total hours watched, and Verizon reported that U.S. domestic peak-hour usage increased 75% during the first week of quarantine alone. We launched Monumental Sports Network four years ago as a digital barker channel to NBC Sports Washington here in the Mid-Atlantic, where we stream hundreds of games annually. When the pandemic hit and forced our leagues to pause their seasons or delay their starts, we turned to virtual experiences to fill the drought in live events. We worked with NBC Sports Washington to run video game simulations for Capitals and Wizards games using EA’s NHL 20 and Take Two Interactive’s NBA 2K20, respectively; we streamed NBA 2K League games; and even convinced Wayne Gretzky to play Alex Ovechkin in NHL 20 on the Capitals’ Twitch page to raise money for COVID-19 relief.

Next, let’s talk esports. Did you know that in 2020, gaming as a category surpassed television, home entertainment, box office and music, in terms of size of revenues? The video game industry is approaching $200B in global annual revenues, and Newzoo believes that there are now a total of 2 billion gamers worldwide. Video games are more than entertainment now. Today, they are as much of a social experience for kids and adults as physically hanging out with friends. To state the obvious, esports are particularly relevant among Gen Z. Morning Consult reports that 35% of Gen Z describe themselves as an ‘avid or casual fan’ of esports, surpassing college basketball (33%), Major League Baseball (32%), UFC (29%) and NASCAR (26%). We found our endemic esports team, Team Liquid, five years ago alongside fellow investors including Peter Guber. Team Liquid now competes in more than 15 competitive titles, won the NALCS in League of Legends four straight times and has won the most prize money of any esports organization during that timeframe. Team Liquid’s digital footprint rivals our own teams’ here in Washington, and after opening its second training facility in the EU, I don’t see that slowing down. The major leagues are also aggressively pursuing esports. The NBA-backed NBA 2K League quickly pivoted its in-studio competitive experience to a remote one with all teams competing from their own local markets. The league produced its entire season remotely in the cloud and blew past its previous records for Twitch viewership, while also producing more than 25 broadcasts nationally on ESPN2. I’m overjoyed to share that our team, Wizards District Gaming, ultimately brought home the championship live in front of a national audience. While our players won more than $420,000 for their victory, they also demoed esports as a viable live event for traditional sports fans, who had never been exposed to the world of esports prior to the pandemic.

With the rapid expansion of legal sports betting, casual fans are now also becoming quite invested in the outcome of live sports events. We were first enlightened about the prospects of a legal and regulated sports betting industry by Sportradar, the leading data provider to sportsbooks, fantasy platforms and media networks. Sportradar’s data integrity services are second-to-none and serve to protect the integrity of sports in the regulated European markets. So why couldn’t the same be true in the U.S.? For too long, we allowed a thriving black market to prosper without oversight or taxation. Now, sophisticated operators like William Hill carefully handle betting opportunities, lock out problem gamblers and drive engagement around our teams and leagues like never before. In August, William Hill converted our Capital One Arena box office into betting windows as a soft launch ahead of the formal opening of their new 25,000+ sq. ft. sportsbook, which is scheduled to open just a few months from now. The response has been overwhelming, with lines consistently stretching outside the building and around the corner. William Hill is offering sports fans competitive pricing, and fans are happy to now bet safely and legally. Sportsbooks are now considering betting opportunities on esports, and I have no doubt that we’re going to see more alternate betting feeds too, like the ones that NBC Sports Washington produced for select Wizards games. I believe it’s only a matter of time before you’re able to stream a game and place a bet, all within a one-window experience.

I certainly cannot wait for this pandemic to end so that we can all get back to regular business operations. I miss the thrill of a sold-out arena and know that we’ll get back there soon. The world will indeed look different, however, and teams and leagues that are aggressive in these categories will reap the greatest benefits. While these are brave new worlds, I believe that investing in all three of these trends can return significant value to our core teams, venues and networks as we prepare for the ‘new normal.’

Published as featured in Sportico on October 8, 2020.

Zach Leonsis is Senior Vice President of Strategic Initiatives for Monumental Sports & Entertainment and General Manager of Monumental Sports Network, a first-of-its-kind regional sports network for digital, mobile and over-the-top platforms. In 2016, Leonsis led the transformation of Monumental Sports Network–co-owned by Monumental Sports & Entertainment and NBC Sports Group–from an ad-based blogging platform into a direct-to-fan service content provider. 

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