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
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.
Today Octagon is also one of the biggest corporate sports-marketing consultants. Among its 500 clients are BMW and MasterCard. The job: build strategies for companies to reach their target audiences through sponsorships, athlete endorsements, Web and television advertising, and more.
“Sports sponsorship has become very well recognized as a way to deliver for companies and brands a unique audience,” says Picciotto. Whether Octagon’s client is an athlete or a Fortune 500 company, says Picciotto, “we’re all about brands.”
The media end of the sports business operates largely out of New York and Los Angeles. But Washington, thanks largely to AOL’s influence, is stepping up in new media.
Jimmy Lynn is at the heart of this. In the late 1990s, AOL execs hunting for new subscribers to its Internet service decided that sports programming would attract men from middle America and the South. “They said, ‘Let’s go do sports deals,’ ” Lynn says.
Lynn had come to AOL Sports in 1995 after stints in radio, cable-TV sports, and an apprenticeship with Charlie Brotman, the longtime Washington public-relations man. At AOL, Lynn headed a team that watched over the company’s deals with the professional leagues. He met regularly with league officials, television executives, team owners, agents, and athletes. And he made a point of introducing many of them to Ted Leonsis, an AOL exec with whom he’d bonded over a shared love of Georgetown basketball.
These deals helped AOL Sports become a rival to ESPN.com, the dominant sports Web site. But after its merger with Time Warner, AOL changed its focus, and many of the leagues pulled away to build their own Internet presences.
AOL alumni haven’t forgotten the power of sports on the Web. James Bankoff, a former AOL programming exec, has started SB Nation, a DC-based network of more than 200 blogs that cover professional teams. Carlos Silva—a tennis star at Potomac’s Churchill High School who ran programming for AOL’s broadband division—now is a Bethesda-based executive with Universal Sports, which delivers Olympics-related sports coverage via TV, the Internet, satellite radio, and mobile devices.
Lynn left AOL last year, cracked open his Rolodex, and set up shop as a consultant. Raised in Japan, he’s working with a couple of prominent Tokyo families to develop sports-related businesses, and he plans to introduce the families to Leonsis. One of them is interested in owning a sports team. Lynn is also working with American companies that want to reach Asian markets, particularly through fantasy sports on mobile devices. The possibilities: fantasy basketball in China, soccer in Europe, cricket in India.
“There’s a real business out there,” Lynn says. “And there’s money to be made for people who can figure it out.”
Here are other players in Washington’s sports-business industry:
Jeff Austin, Octagon agent. A former star tennis player at UCLA and a Donald Dell alum, Austin handles Chris Paul, David Robinson, and other NBA players. He’s married to fitness guru Denise Austin; his sister, Tracy, was a teen tennis sensation in the late 1970s.
Adisa Bakari, Dow Lohnes. Represents 14 NFL players, including Maurice Jones-Drew (third-highest-paid running back in the league) and Matt Forte.
Charlie Brotman, a legendary sports PR man who also handled public-announcing duties for the Senators.
Steve Disson, a ProServ alum who promotes and produces ice-skating events for television and traveling tours.
David Falk, a superagent who has negotiated some of the highest salaries in pro-basketball history. Once a protégé of Dell’s, Falk signed Michael Jordan in 1984 with a fledgling Oregon company called Nike. Falk split with ProServ in 1992, taking Jordan with him, and eventually sold his agency for $100 million. He still handles a few NBA players, having reopened his firm in 2007.
Sara Fornaciari, who runs her own event-management firm in Bethesda that specializes in charity sports events. The first female intern in the Washington Post sports department, she joined Donald Dell in 1973 and became a force in women’s tennis, representing Tracy Austin and Zina Garrison, among others. In the 1990s, Fornaciari served as a top executive with the Women’s Tennis Association.
Abe Frank, NCAA lobbyist. A former Citigroup lobbyist, Frank works Congress and federal agencies on issues relating to Internet gambling, drug testing of athletes, and more.
Jeff Fried, an agent who handles a few pro athletes (Steve Francis, Ty Lawson) but is chiefly known as a boxing promoter. He’s credited with behind-the-scenes work to pull off last year’s debut of the EagleBank Bowl college football game in Washington.
Meredith Geisler, former Advantage International and Fila USA executive, now a sports-marketing consultant.
Peter Hill and Bob Morris, founders of Billy Casper Golf, a Vienna company that manages and develops golf courses.
Karen Irish, lobbyist for the US Olympic Committee.
Gregg Levy, who heads Covington & Burling’s litigation practice and, with Bruce Wilson, its sports practice. NFL owners took a long look at Levy, the league’s outside counsel, to succeed Paul Tagliabue as commissioner before picking Roger Goodell, a league executive. Later this month, he argues for the NFL before the Supreme Court in a case that commentators say may inoculate the league against antitrust attacks.
Lamell McMorris, Perennial Sports & Entertainment. The longtime civil-rights advocate and lobbyist is also the lead negotiator for unions for NBA referees and Major League Baseball umpires.
David Osnos, elder statesman of the Arent Fox sports practice and consigliere to Wizards owner Abe Pollin. Arent Fox has more than a dozen partners who do stadium acquisition, development, and financing; naming-rights deals; player contracts; and more. The firm serves as counsel to several pro teams, including Bob Johnson’s Charlotte Bobcats, the Miami Dolphins, and DC United.
Kevin Plank, founder of Under Armour. While a football player at the University of Maryland, Plank created shirts that wicked away sweat. The company he founded in his grandmother’s Georgetown townhouse is now a $700-million giant in apparel.
Erik Rydholm, the DC-based producer behind Pardon the Interruption, ESPN’s hit talk show with Tony Kornheiser and Michael Wilbon.
Bill Schweitzer, Baker Hostetler. Major League Baseball lobbyist whose firm has been involved with professional baseball for nearly a century; its lawyers drew up the American League’s charter.
J.C. Watts, a former congressman and Oklahoma Sooners star who lobbies for the Bowl Championship Series.
Lyle Yorks, Proactive Sports Management USA. The Georgetown agency of this former University of Virginia soccer star handles top US soccer players here and abroad.
Peter Zern, a media and finance specialist at Covington & Burling, named by Sports Business Journal one of the most influential young people in sports business. He has represented NASCAR in media deals with ESPN, Fox, and Turner broadcast networks.
When Sports Stars Need a Smart Lawyer Who Can Make Big Deals
Lon Babby arrived at the Williams & Connolly law firm in 1977. Fresh out of Yale Law School, he handled important matters, including white-collar criminal defense and a First Amendment case or two.
But Edward Bennett Williams, one of the firm’s founders, owned the Washington Redskins and the Baltimore Orioles. Babby, a sports fanatic, soon found his briefcase filled with work for the two teams. Many nights he climbed into Williams’s town car and rode up I-95 with the legendary lawyer to take in an O’s game.
Today Babby is one of the most influential agents in sports, with a reputation for integrity in a business known for its Wild West ways. His roster of clients includes Grant Hill, Tim Duncan, and a couple of dozen others who together will make more than $109 million this year from contracts he’s negotiated.
Photos in his office show clients towering over Babby, who stands five-foot-eight. “I grew up on Long Island in a Jewish and Italian community,” he says. “If you were six feet tall, you played center. I didn’t even know I was short until I got to college.”
Hill was Babby’s first client. Heading into the 1994 NBA draft, the Duke star turned to Babby at the suggestion of his father, Calvin, the former NFL great and an executive with the Orioles. Calvin was impressed by Babby and Williams, and he wondered: Shouldn’t players hire the same topflight legal talent that owners did?
“I don’t want to indict all sports agents, but very few have the brainpower to be at Williams & Connolly,” Hill says.
Babby doesn’t represent Hill in the usual way. Most agents get a cut of contracts they negotiate—typically 4 percent of salary and as much as 20 percent of a marketing deal. Babby insisted on being paid like a lawyer, by the hour.
Babby helped Hill land a $45-million, eight-year deal with the Detroit Pistons and a $6-million-a-year endorsement deal with Fila (later renewed for $100 million over ten years). Hill, whose polish, professionalism, and play made him one of the NBA’s most popular players, became a hot brand, signing with General Motors, McDonald’s, Sprite, Kellogg’s, and Tag Heuer.
Soon Babby was devoting nearly all his time to NBA players in the Grant Hill mold—Shane Battier, Ray Allen, and other smart guys with integrity.
With his partner Jim Tanner, Babby now has 30 clients, including pro baseball players (Chris Young, Chris Ray) and WNBA talent (Alana Beard, Tamika Catchings). He has built within Williams & Connolly a full-service shop for his clients, establishing relationships that extend beyond their playing days. Paralegal Shana Martin handles travel and other concierge-like arrangements for the athletes. Terese Smallwood, former marketing director for the Atlanta Hawks, heads up players’ marketing efforts along with Meredith Geisler, a longtime sports-marketing and public-relations executive. Bob Barnett, the firm’s star literary agent, handles book deals.
Babby added Tanner, a corporate lawyer with experience in mergers and acquisitions, to the practice in 1997. Tanner is the primary agent for many of the athletes—including the NBA’s Marvin Williams, Josh Childress, and Thaddeus Young— and handles complex business ventures for clients. Among his work for Hill: negotiating real-estate deals and helping the player put together a traveling exhibition of African-American art.
Such smarts are expected in today’s sports world, Babby says: “In the 1970s, it was an anti-intellectual environment. That’s changed. If you look at teams in all the sports, you now have well-educated, Ivy League types running them.”