The Capitals announced the changes Saturday following a two-week organizational investigation. Leonsis and Patrick met with McPhee and Oates on Thursday before making their final decision late Friday.
"It came down honestly to, after all of the work that we did and the due diligence for Dick and I, to sit down and say, 'Do we think this team with this leadership can compete for and win a Stanley Cup going into next season?' And our answer was obviously no," Leonsis said Saturday. "That's why we made the change."
McPhee's contract was not renewed, ending his nearly 17-year tenure with the Capitals. He was the third-longest tenured general manager in the NHL behind Lou Lamoriello of the New Jersey Devils and Jim Rutherford of the Carolina Hurricanes.
During that time, McPhee oversaw a rebuild that revived a downtrodden franchise and established Washington as a regular-season juggernaut. From 2007-08 to 2012-13, the Capitals won the Southeast Division five times and the Presidents' Trophy in 2009-10.
Those regular-season results never translated into Stanley Cup Playoff success. Washington reached the 1998 Stanley Cup Final in McPhee's first season, but has yet to advance past the second round since.
The Capitals' postseason streak ended this season at six, which was enough for ownership to make a change.
"If you don't make the playoffs, you can't win the Stanley Cup," Leonsis said. "That was really the main issue for us. …You have to do something to pivot the team to be an ongoing strong team. I just felt that new leadership at this time was needed."
Oates, who had one year remaining on his contract, was fired after two seasons. This season, the Capitals' tenuous defensive depth, even-strength scoring struggles, and propensity for blowing two-goal leads led to their, and ultimately Oates', demise.
"It is a great franchise with a wonderful fan base that will always be close to my heart," Oates said in a statement released by the team. "I'm grateful for the opportunity they provided me and wish them nothing but the best in the future."
When a coach is hired, the Capitals will have employed four since the start of the 2011-12 season. The constant shift in on-ice identity has played an integral role in Washington's downward trajectory.
"I'm not very proud of that. I think that's a real issue," Leonsis said of the coaching turnover. "It's very hard for players to jell going from system to system to system. It concerns me greatly."
The Capitals have begun the process of finding replacements. An initial list has been formulated, with Patrick adding that the organization is not beholden to hiring a general manager before hiring a coach.
"It would be nice to have [a general manager] in place before the [NHL Draft (June 27)] and I think it's probably more likely than not that that timeline will work out, but it's not something we're a slave to," Patrick said.
He mentioned he is not anticipating any other changes within the organization at this time.
The Capitals find themselves at a crossroads, and the decisions Leonsis and Patrick make this offseason will prove pivotal in aligning the franchise in the right direction.
"We were left with the overall impression that the team wasn't trending towards being able to compete for a Stanley Cup," Leonsis said. "That was just a clear signal and why we felt it was time to make those changes."