March 15 (Bloomberg) -- Phil Anschutz said he’s focused on luring a National Football League team back to Los Angeles after taking his entertainment company off the market.
Anschutz ended the sales process for Anschutz Entertainment Group, the world’s second-biggest concert promoter and owner of the Staples Center in Los Angeles, because of what he said was “too much noise in the system,” including development of a billion-dollar stadium to lure the No. 1 U.S. sports league back to the No. 2 media market.
Anschutz, 73, is worth $10 billion, according to the Bloomberg Billionaire Index
“A lot of talk about the NFL, which, while an important project, had always been to me the tail on the dog, certainly not the dog,” Anschutz said yesterday during a conference call with reporters, adding that his decision to sell was influenced by a deteriorating and debilitating back condition.
Anschutz, who had successful back surgery several weeks ago, said the procedure has left him reinvigorated and determined to re-engage with the company, including AEG’s NFL ambitions.
“I started out, I admit, as a bit of a skeptic on this,” he said, referring to proposed construction of a stadium next to the Staples Center that is home to the National Basketball Association’s Lakers and Clippers, as well as the National Hockey League’s Kings.
“Over time I have come to the conclusion that the NFL probably would -- and could -- move to Los Angeles, that there was a great opportunity for the city but more importantly there was a business opportunity for myself if it happened on the right terms,” he said without being specific about the terms.
Anschutz said he’s already spent about $45 million on AEG’s attempt to lure an NFL team. “I don’t write those kinds of checks just for the fun of doing it,” he said.
An agreement to put an NFL team in Los Angeles would be an easy one to negotiate, he said. All that remains is for the NFL to decide what it wants.
“The parties have to be at the table,” said Anschutz, whose AEG unit includes London’s O2 Arena and ownership stakes in the Lakers, Kings and soccer’s Galaxy. “They have the best location in the world. They have somebody that understands programming, sports and venues. They have a company that could literally write a check for this stadium. Do they want to do this or not?”
AEG’s proposal to build $1.2 billion Farmers Field in downtown Los Angeles received city council approval last year.
AEG said yesterday in a statement that Tim Leiweke, president and chief executive officer since 1996, will leave the Los Angeles-based company. Dan Beckerman, the company’s chief financial officer who joined AEG more than 15 years ago, will replace Leiweke.
David Carter, executive director of the Sports Business Institute at the University of Southern California, said the departure of the “extremely plugged-in” Leiweke, as well as the uncertainty surrounding the company’s future, will hamper AEG’s effort to bring the NFL back to Los Angeles, which has been without a team since 1995 when the Raiders moved to Oakland and the Rams went to St. Louis.
“It’s very clear that this is going to delay any of their plans regarding Farmers Field and their ability to lure an NFL team,” Carter said via telephone. “Just because AEG is taken off the table for now -- the sale of AEG, en masse -- a single entity, doesn’t mean they won’t parcel off some of the other assets.”
Anschutz said he won’t break up the company because all of its units are meant to feed each other.
AEG’s downtown stadium proposal has competition from Majestic Realty Co. Chairman Ed Roski Jr., who proposed building a stadium in the City of Industry, 18 miles (30 kilometers) east of Los Angeles. The NFL also has contacted officials at Guggenheim Partners about the possibility of a football stadium at Chavez Ravine, where the Dodgers play.
NFL spokesman Brian McCarthy said in an e-mailed statement that league officials continue to monitor all stadium developments and “remain interested in multiple sites in the Los Angeles area.”
Among the bidders for AEG were Tom Barrack’s Colony Capital LLC, which was a partner with Qatar’s sovereign wealth fund; Los Angeles billionaire Patrick Soon-Shiong, and Guggenheim, which last year bought baseball’s Los Angeles Dodgers.
None of the bidders offered near the $8 billion sought by Anschutz, people familiar with the situation said earlier this month.
“Whether it’s too expensive is in the eye of the beholder,” Barrack, Colony’s founder and chief executive, said in an interview on Bloomberg Television’s “Street Smart” hosted by Trish Regan. “We just didn’t get this to his expectations.”
Anschutz wouldn’t disclose the offers, adding that had the process continued he would have been able to solicit satisfactory bids.
“Some very attractive numbers surfaced. There was room to negotiate something better if I had chosen to do that,” he said. “To tell you the truth, I was kind of surprised myself I put it on the market. You have in AEG what many individuals around the world would give their left arm -- and probably their right one -- to own, a unique set of assets that are fun. Oh, and by the way, they make money.”
Anschutz Co., AEG’s Denver-based parent, hired Blackstone Advisory Partners to assist with the sale. Anschutz said he will resume a more active role in the company, which is second in the concert business to Live Nation Entertainment Inc.
AEG owns and operates 100 venues on five continents. The company produces annual festivals that include the Coachella Music & Arts Festival, the Stagecoach Festival and the New Orleans Jazz & Heritage Festival.
Anschutz Corp. has been in the natural-resources business for more than 75 years, according to the website of one affiliate, Anschutz Exploration, which lists involvement in projects in Montana, Wyoming, Colorado, New York and Texas.
Through its Xanterra Parks & Resorts, the company is the largest operator of lodging, restaurants and retail outlets in U.S. national parks, including Grand Canyon and Yellowstone.
Anschutz Film Group made the movie “Ray” about Ray Charles, and his Clarity Media Group owns the Washington Examiner and The Weekly Standard.
Anschutz said he’d wait for the NFL to decide what it wants because he’s made his commitment known.
“Nobody else has spent anything other than me. We are committed to bringing the NFL back. We’re open for business,” he said. “It’s not rocket science. It’s a matter of sitting down and getting this deal down.”
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