Thought Leadership Series: The Business of SportsDecember 24th, 2019
First Long Island Investors was honored to host Jon Ledecky, co-owner of the New York Islanders, for an exclusive event with clients and friends of the firm at the Garden City Hotel on November 7, 2019. Mr. Ledecky has a prestigious background as a businessman. He is a Harvard alumni who pursued a career in venture capital. He went on to start his own office supplies business, U.S. Office Products, which eventually completed an initial public offering in 1995. Following his departure from U.S. Office Products in 1998, Mr. Ledecky would go on to purchase ownership stakes in two professional Washington sports teams, the Capitals and the Wizards, from 1998 to 2001, before purchasing a stake in the New York Islanders in 2014. After a two-year transition period, Mr. Ledecky became co-owner in 2016.
The event was a fireside chat between FLI’s Chairman, CEO, and Chief Investment Officer, Robert D. Rosenthal (past co-Chief Executive Officer and a minority owner of the NY Islanders in the 1990s) and Jon Ledecky. The conversation began with accolades for the Islander’s 10-game winning streak they had at the time. Mr. Ledecky pointed out the team-brand of hockey the players were bringing every night and how special the streak was given 6 veteran players were injured during the streak. The conversation then switched gears to the community. Mr. Ledecky stated that owning a sports team is the next best service for the community outside of running for office. It provides a platform with free-branding (news, radio, Instagram, Twitter, etc.) and large brand value through players and alumni that fans are passionate about. This can be used to provide a great service to the community off the ice. Hockey with a Heart, a program where the Islander’s spotlight a non-profit each game, is in its third year raising money and awareness for local charities with causes that range from cancer fundraising, military appreciation, food and toy drives, mental health, to gender equality, and beyond. The Islanders Children’s Foundation was created in 2003 to support and provide opportunities to local youth. The foundation has raised over $13 million dollars since inception. Mr. Ledecky is extremely proud of the philanthropic efforts he is able to promote through the Islanders and their leadership in the community.
Mr. Ledecky spoke about his other investments as a businessman and the sectors and trends that currently pique his interest. Mr. Ledecky suggested “walking the mall”, a strategy consisting of observing which stores were busy or empty, what products were being sold and what was not. Great companies such as Sunglass Hut and Pharmapax have come from understanding markets that are not served or can be served differently. Mr. Ledecky also touched on the transformation of business in recent history and three notable trends. The first was the continual shift in advertising dollars towards digital platforms, such as Facebook, Instagram, and Twitter, where there are millions of eyeballs every day. The second was the rising popularity in online gaming/E-sports that can provide many unique business opportunities in the coming future. The final trend was 5G technology that in his mind will change the world that we live in.
The conversation shifted to Belmont, the site where the Islanders are building their new arena. Mr. Ledecky was extremely excited about the opportunity to have a dedicated arena for the Islanders. Part of the strategy for the new site was having a strong partnership with a concert and events promoter that can secure concerts during times the Islanders are either away or in off-season to continue to generate revenue. Seeking advice from ownership of other sports teams that had managed a relocation was also a key step Mr. Ledecky took during the process. Mr. Ledecky and the Islanders hope to further enhance the surrounding area and its visitation appeal by building a 250 room hotel across the street with a retail footprint that is close to JFK airport. The project carries numerous benefits such as $2.7 billion initial economic spend, $600 million ongoing spend, thousands of new jobs, and the first new Long Island Rail Road station in 50 years, all of which is beneficial to the economy of Long Island.
Finally, the conversation switched back to hockey and the great relationship between front office and bench. Barry Trotz, head coach of the Islanders, and Lou Lamoriello, President and general manager of the Islanders, have made great strides since their arrival in New York. Mr. Ledecky knew Barry from his previous ownership of the Washington Capitals (where Barry Trotz previously coached and won a Stanley Cup). Lou Lamoriello was brought in through connections from Toronto and since uniting the two have done a terrific job with the organization. Mr. Ledecky ended the conversation by saying “If you’re an owner of a sports team, the best thing you can do is realize you’re not a general manager or coach.”