Reuters dropped a fairly major bombshell last night, reporting that Philip Anschutz is considering selling his Anschutz Entertainment Group for a price of “several billion dollars,” a report later confirmed by Anschutz’s own execs. That’s the AEG that owns the Los Angeles Kings, Los Angeles Galaxy, the Houston Dynamo, a chunk of the Los Angeles Lakers, the Staples Center, and the nation’s second-largest concert promoter — and which, not incidentally, is currently trying to build a football stadium in downtown L.A. So, a slightly big deal.
Everyone concerned has rushed to insist that even if Anschutz is selling off his sports and entertainment business, nothing will change for the L.A. stadium plan: Los Angeles Mayor Antonio Villaraigosa said, “I have the commitment from both [Anschutz and AEG president Tim Leiweke] that this sale will not affect plans for an NFL team to return to Los Angeles in the near future and will not affect my support for moving ahead with Farmers Field and the Convention Center site.” And Leiweke released a statement that said in part that AEG’s “virtuous circle” of entertainment businesses “uniquely positions us to execute new, world-class projects that no other company can imagine or attempt.”
It’s certainly possible that this won’t affect the stadium plans, especially if Leiweke remains at the helm of AEG: If you read the New Yorker’s long profile on Anschutz’ empire earlier this year, you’ll recall that the whole downtown sports/entertainment zone concept is Leiweke’s puppy, and Anschutz is just signing the checks. L.A. Times sportswriter T.J. Simers actually takes this so far as to speculate that if biotech billionaire (and Lakers minority owner) Patrick Soon-Shiong is a potential buyer as rumored, he’ll immediately move to buy the San Diego Chargers and relocate them to a new downtown L.A. stadium.
Speculation aside, though, anything could happen in a sale, and there’s no guarantee Leiweke will remain in place, or if he does that he’ll still have a boss who’s willing to sign blank checks for his construction projects. This is a major, major wild card, not just for L.A.’s NFL hopes but for the arena world in general, where AEG is one of two concert superpowers (along with LiveNation). The landscape is about to shift, and it’s anyone’s guess where it’ll end up.
Question for Neil or whomever, how realistic is the speculation involving the Chargers in TJ Simers’ article? Is it wishful thinking of a Los Angeles football booster or are there really dots to connect there?
This calls for speculation, but I wonder if new owners would now more aggressively pursue a team in KC… I guess we can’t really know that until a potential buyer emerges. My guess is it won’t take long.
Seems to me it’s more Simers blowing it out his backside than anything else. He’s the only pundit I’ve read so far that sees this as a positive for the LA stadium push. Most seem to think this is the beginning of the end for the stadium plans.
That was my initial thought too Dan.
The certainty with which people were talking about the LA stadium had mostly to do with knowing AEG was going to handle the financing and it was just a matter of time before an interested NFL team was hooked. With AEG leaving, there is no guarantee whomever the new owner is is going to want to pay what AEG was going to pay to build it.
A new owner would have to buy AEG, which will cost billions, and then that person is going to finance most of the billion dollar stadium on top of that? Even if the new prospective owner was only interested in buying the rights to the stadium entitlements, I’m sure AEG isn’t going to give those away for cheap considering how hard they worked to secure them. And then this group is going buy the Chargers or find an NFL team willing to submit to AEGs revenue terms in a move (which wasn’t going to happen)? Are the Chargers even for sale?
A lot of things need to happen for Simers’ fantasy to come to fruition. But then I thought maybe there was a chance he knew something I didn’t know.
You’re on the right track sasha. Even AEG was not going to build the stadium, buy a team (or buy a discounted minority ownership) and have everyone make enough money.
I have a hard time seeing how this is bad for the stadium. It appeared from the beginning that the stadium was a bailout for the mistake of building the hotels and condos at L.A. Live. If someone is going to buy AEG, it seems to me that the person would have to be into the idea of getting that stadium up so that those hotels/condos stop being such losers.
I have a hard time seeing how a stadium that’s open ten days a year (twenty if you assume two teams) is going to bail out any hotels. It’s not like they can add rooms just on game weekends.
What are the chances of a committed LA investor buying AEG, selling off all of the non-LA products (ie, Houston Dynamo, infrastructure in KC and elsewhere, etc), and then using much of those liquidated assets to not only keep a stadium proposal in the works but also to build an LA sports empire? Is Patrick Soong-Shiong the person to do that?
No doubt that LA was a major hub for AEG in the industry. Surely there’s an appeal of having the Lakers, Kings, Galaxy, and its infrastructure all accessible. The only thing they need is a football team, and freeing up those assets may prove affordable.
The condos are obviously helped even if the stadium is only used 10 days/year.
And there is precedent for a few days a year being enough activity to keep a hotel in business. When I was in Augusta a couple of years ago the hospitality manager of the Hilton Garden in said they make their year on the week of the Masters alone. The rest if the year is just a loss leader.