Leonsis says Team Liquid worth more than Capitals when he bought them

Team Liquid's recent success includes a trip to the finals at the League of Legends Mid-Season Invitational. Provided by Riot Games

Washington Wizards and Capitals owner Ted Leonsis said Tuesday at the Wall Street Journal Future of Everything Festival that Team Liquid is worth more than what he acquired the Capitals for in 1999.

In October, Forbes valued the esports team at $200 million, with an estimated $17 million in annual revenue.

Sources familiar with Team Liquid's finances said the team is expected to be valued higher than that now, given both team and brand success in the past seven months, including making it to the finals of the Mid-Season Invitational. The team also signed a multiyear, exclusive sponsorship and sales representation deal with livestreaming platform Twitch, which is expected to increase its sponsorship revenue significantly.

Leonsis, a former senior executive at AOL, paid $85 million for the Capitals in 1999 when he acquired the team from Washington sports magnate Abe Pollin.

In 2016, Leonsis co-founded aXiomatic, an esports and gaming-focused investment group with Peter Guber, the Golden State Warriors' co-managing partner, and Bruce Stein, a former Sony and Mattel executive.

Since then, aXiomatic has acquired a majority stake in Team Liquid, made investments in developers Epic Games and Niantic and recruited new major investors, including Tampa Bay Lightning owner Jeff Vinik and Warriors minority owner Bruce Karsh.

In October, aXiomatic raised $26 million in a Series C investment round that included Michael Jordan and Declaration Capital. Disney, the parent company of ESPN, is an investor in aXiomatic.

In the past five years, successful esports teams have increased in value rapidly, with teams such as Cloud9 -- one of the most successful in the industry -- being valued at more than $300 million in recent raises, sources said. Part of those high valuations comes from a limited number of slots in franchise leagues, such as the League of Legends Championship Series and Overwatch League. Liquid is one of 10 franchises in the LCS but does not own an Overwatch team.

Leonsis and Guber were among the first few NBA owners who were outspoken about the potential of esports among their peers.

The NBA, more than any of the four major sports leagues in the United States, has invested significant time and financial resources into esports. In May 2018, the league launched the NBA 2K League, which now includes 21 franchises that are owned by their NBA counterparts. The Wizards were among that league's initial participants.