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In the Big Leagues Now
Once a slow town for professional sports, Washington is now home to lots of people who make megadeals—and megamoney—on the games we love By Drew Lindsay
Comments () | Published January 1, 2010
“There’s money to be made for people who can figure it out,” says Jimmy Lynn. Photograph by Chris Leaman

You won’t find Jimmy Lynn on any list of Washington’s rich and famous. But his BlackBerry holds the phone numbers of people who are.

Lynn counts Ted Leonsis as a friend and mentor along with Mario Morino, godfather of Washington’s tech industry. He seized a chance encounter with Desirée Rogers to chat up the Obama confidante. He’s handsome, charming, and so earnestly ambitious as to be endearing.

In another era, Lynn—a graduate of Woodson High in Fairfax and American University—might have grown up to be a fixer, someone who sets the table for a politician’s success. That was the calling for generations of young people with his smarts and networking skills. But Lynn is something new in Washington. He’s a sports consultant, a dealmaker who helps turn the games we love into a million bucks or two.

Odd as it may seem, Washington, which has been abandoned twice by professional baseball, is a hub of sports business, with lots of people like Jimmy Lynn. The Redskins are one of the biggest profit centers in sports, thanks to owner Dan Snyder’s ingenious—some say ruthless—marketing. Octagon—the sports-marketing giant and stage manager behind the celebrity of Mia Hamm, Anna Kournikova, and Michael Phelps—is headquartered in the Tysons Corner area. More than a dozen high-profile agents are based here, including pioneers such as Donald Dell, David Falk, and Lon Babby.

Washington tech companies are blazing trails in fantasy sports, blogging, and Internet broadcasts of games. “They’re really at the forefront of new media,” says John Ourand, Washington-based media writer for SportsBusiness Journal.

When it comes to old media, Chevy Chase–based GEICO is one of the nation’s top sports advertisers, its gecko mascot ever present on TV broadcasts. Up the road in Baltimore is Under Armour, the sports-apparel company that’s a Nike juggernaut in the making.

Nothing by itself explains a robust sports industry in a town known mainly for politics. It’s in part a natural extension of the fact that Washington is growing into a world-class city. Since the early 1970s—the nadir of pro sports here after the Senators abandoned the city for the second time—the region’s population has nearly doubled to more than 6 million. It’s also become one of the nation’s wealthiest metro areas.

“As the region grew, along came more restaurants, more of the arts and theater, and more entertainment,” says Mark Tuohey, a lawyer and sports powerbroker who helped bring pro baseball back to Washington. “And don’t forget: Sports is all about entertainment.”

Of the more than 50 metropolitan areas with professional sports teams, only 11 have teams in all four major sports—football, basketball, baseball, and hockey. Of those, only Washington, Boston, Chicago, New York, and Los Angeles also field both men’s and women’s professional soccer teams.

If you throw in Baltimore, Washington is the rare metro area with five sports venues built since the early 1990s, when owners came to see stadiums as cash cows. Camden Yards, FedEx Field, Verizon Center, M&T Bank Stadium, and Nationals Park, besides being fine places to watch games, generate millions of dollars in revenues through naming rights, corporate suites, or gimmicks such as the “personal seat license,” a fee paid for the right to buy a season ticket.

Washington may never be a great sports town if the measure is fans who paint their chests in team colors. But with a full complement of pro teams and an affluent population, it’s one of the nation’s best markets for sports.

“After New York, Washington is right there,” says Steven Greenberg, a Manhattan investment banker with Allen & Company who specializes in sports business. “It’s squarely in the first tier.”

No one would have put Washington in the first tier on September 30, 1971. That night, the Senators played their last game here before bolting for Texas and a makeover as the Rangers. Grieving fans stormed the RFK field before the last out, and Washington was left with the Redskins as its only pro team.

At the time, sports across the globe was still a modest enterprise. Wimbledon and other premier tennis events had only recently agreed to let pros play for prize money. Billion-dollar television deals for the major sports were years away; owners still relied almost exclusively on ticket sales for revenues. Players could only dream of the free agency that ultimately would win them big salaries. And corporate America hadn’t begun showering cash on teams and players to promote their brands.

Yet the sports business was putting down roots in Washington. In the early 1960s, the National Football League hired DC’s Covington & Burling, a top antitrust firm, to fight a lawsuit filed by its new rival, the American Football League. Over the years, Covington’s NFL brief expanded exponentially; by 1969, when former Georgetown basketball star Paul Tagliabue joined the firm, he was assigned to help persuade Joe Namath to give up ownership in a nightclub with ties to professional gamblers. About the same time, the league was finishing off a merger with the AFL—a deal that required a congressional antitrust exemption that Covington, with its deep Capitol Hill connections, helped secure.

Covington & Burling’s value to the NFL became apparent in 1989 when team owners picked Tagliabue—over Jack Kemp, the former NFL quarterback who had just run for President—to become NFL commissioner. For the next 17 years, he skillfully led the league to a promised land of labor peace, unprecedented popularity, and lucrative TV deals.

Other Washington law firms followed the trail blazed by Covington. As money flowed into sports, deals became more complex, requiring greater legal expertise—particularly the kind offered by DC firms with political juice.

“So many things important to sports business intersect in Washington,” says Covington partner Bruce Wilson, including antitrust issues, communications regulation, and taxes. “The legal framework of the business means the issues will be taken up here.”

Consider Wilson’s résumé: He’s worked for the four major professional leagues and done several dozen stadium, TV, satellite-radio, and digital-media deals. He represented Major League Baseball in the Montreal Expos’ move to Washington and the NFL in the sale of the Redskins to Dan Snyder.

The importance of the Washington lawyer to sports business was on display last year in the selection of a new head of the NFL Players Association. The union unexpectedly chose DeMaurice Smith, a lawyer at Patton Boggs, snubbing two former NFL players and union insiders. Smith in turn raided his firm, as well as Latham & Watkins, to hire his lieutenants.

While Covington & Burling was putting Washington on the map for sports law, Bethesda native Donald Dell was building a powerhouse in sports marketing.

A top tennis player in the 1960s, Dell captained the American Davis Cup team in 1968 and 1969 and became friends with Arthur Ashe and Stan Smith, the reigning kings of the game. Ashe persuaded Dell, who was also a lawyer, to become their agent. Dell landed endorsement deals for the two that put them on a par with golfer Arnold Palmer, the first marketing sensation to come from the world of sports.

Dell went on to found ProServ, a sports-marketing firm that helped create the big-money era in sports. ProServ turned hundreds more athletes into corporate pitchmen. The firm also created, owned, and managed tennis events. These served to fill their clients’ schedules with prize-money tournaments, some of which even paid appearance fees—at first considered scandalous. ProServ turned the events into marketing bonanzas, selling sponsorships, advertising, and television rights, taking a cut from every deal.

Eventually, ProServ controlled so much of tennis that Dell was said to run the game. “Dell invented this industry,” says Matt Winkler, associate dean of the graduate program in sports management at Georgetown University.

Dell sold his firm in 1999, though he still handles clients and television-rights deals. His legacy here includes the tennis tournament he started in Rock Creek Park, now called the Legg Mason Tennis Classic. And many ProServ alumni still ply their trade in Washington.

Octagon, a Tysons Corner firm with more than 1,000 employees around the world, is the product of a divorce within the Dell corporate family. In 1983, a couple of dozen Dell employees—including two of his original partners—quit and launched Advantage International, with about 50 athlete clients.

The firm changed its nameplate in 1999 and continued its push into the global sports marketplace. Octagon’s client list includes athletes from all the major sports, tennis, and golf as well as Olympic stars such as Phelps, Natalie Coughlin, and Katie Hoff. The Sporting News named Phil de Picciotto, the head of its athlete-representation division, one of the most powerful people in sports. 


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Posted at 04:00 PM/ET, 01/01/2010 RSS | Print | Permalink | Comments () | Articles