Yesterday’s news that AEG is being put up for sale, by Phil Anschutz and the Anschutz Corporation, is certain to remain a huge story in the sports/entertainment world for months to come. There’s already published speculation that the sale could reach multiple billions of dollars, and that wouldn’t be stunning, given the wide-reaching arms of AEG. Somewhere, some time, there’s an amazing book to be written about the rise of AEG, and it all started with the Kings.
Anschutz’s purchase of the Kings out of bankruptcy (along with partner Ed Roski) in 1995 started the AEG ball rolling. A further part-ownership investment in the Lakers greased the wheels for the opening of Staples Center. The success of Staples Center led AEG to get into the concert-promotion business, as well as explore arena development and management in other cities. Now, AEG Live is a giant in the concert industry, and AEG owns/operates buildings in every corner of the world. Staples Center also led to the development of L.A. Live. AEG’s purchase of the Kings was its first step into the ownership of pro sports teams, which eventually led to the purchase of the Galaxy — and, by extension, the building of Home Depot Center — and several professional teams in Europe. AEG later branched out to own music festivals and into other areas.
It’s sort of fitting, then, that the Kings won the Stanley Cup in the same year that Anschutz chose to cut ties with AEG. It’s full-circle, in a way. The Kings, one could say, made the construction of the empire possible. Now, they are one piece of what figures to be a massive transaction. It’s impossible to predict what the future holds for AEG and, by extension, the Kings. As noted yesterday, there’s unlikely to be much short-term impact on the Kings. That said, there’s absolutely no sense in predicting what a new owner might do. He/she/they would theoretically be well within their rights to splinter AEG in any number of ways, but until a potential owner is identified, it’s relatively pointless to speculate. In general, though, it’s hard to imagine too much splintering. There’s so much planned synergy that it would be difficult, and perhaps unwise, for a new owner to change too much. The Kings, Staples Center, the Manchester Monarchs and Toyota Sports Center are all tied together by design — not to mention tied to AEG’s ticketing and merchandising wings — and of late there have also been increasing ties to the Galaxy.
Now, if anyone has approximately $4,999,998,000.00 they would be interested in investing in a partnership with me…
RICH…
can i put $20 down…and pay the other 2 billion in easy monthly installments to gain my fair share…????
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Dean Reply:
September 19th, 2012 at 5:23 pm
@variable,
If Bettman were running the sale, that may have worked!
For $40 you could probably get a piece of the Coyotes…
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* Reply:
September 20th, 2012 at 11:21 am
@variable, what if the fans bought the franchise? could we for 20 bucks a pop?
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puckbobb Reply:
September 20th, 2012 at 7:04 pm
I think I could afford some pucks
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Choralone Reply:
September 21st, 2012 at 5:23 pm
@*, If the Kings had 250 million fans, that would work. Since the population of the entire Unites States was estimated about one year ago to be a little more than 311 million, that may not work….
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AEG I believe owns the rights to the Cochella Valley Music Festival among others. Lilith Fair is their property I believe too.
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DesertKing Reply:
September 19th, 2012 at 6:21 pm
@Bonvivant,
The Coachella promoter, Goldenvoice, is owned AEG.
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“That said, there’s absolutely no sense in predicting what a new owner might do.”
Since when does making sense have anything to do with blogging?
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What if no one can afford it ?
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well Rich, what better year for you to write this AEG book than this year with what is looking to be a long NHL work stoppage?!
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$4,999,998,000.00 by this figure I am guessing that you can contribute $2,000 to the venture? As a final tribute to the Kings it would be nice if he just made the Kings a public company. I suppose with the lockout that would be a terrible finacial move, but I would love to buy stock in the Kings.
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Shakes Reply:
September 19th, 2012 at 9:00 pm
@luc20rules, As long as it’s not a leveraged buyout like people have done with Manchester United and saddled them with debt. I actually wouldn’t wanna see the Kings be a public company in the traditional sense- we would never be able to have a steady hand to oversee a 5 year rebuilding projector. Now if it were a co-op like the Green Bay Packers that would maybe be different.
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Hey Rich, will you take a raincheck? I’m good for it since the Kings are giving me 5% credit on my ticket package.
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It truely is amazing great story I’m sure many people did not know. I love aeg and all that it has done for LA and they made money and grew into this amazingly huge company. Very cool and now it goes on with the nfl. Question to anyone that can answer if the nfl doesn’t allow a owner to own a sports team, does that mean aeg must sell the galaxy also? Thank you and go kings! Hopefully this lockout ends soon because it really is a huge turn off and even though I WILL stay a loyal fan I think that the owners or players should return some money to the REAL fans of the NHL because this is a huge slap in the face to the sport, the fans, the players, the economy.. Players and owners MUST give way and this is why the NFL and MLB have so many fans. Not only the commercials, but in 2012 to do this shows why the NBA and NHL will never be the biggest sport ever. My opinion, I could be wrong, but canceling all preseason games doesn’t help “grow” the sport I love.
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luc20rules Reply:
September 19th, 2012 at 7:22 pm
@Ducksuck, You forgot the arena, team, & NHL employees. No jobs or additional pay cuts to those that probably work the arenas as a second or third job probably really cant afford to go without the paycheck.
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CB14 Reply:
September 19th, 2012 at 8:12 pm
@Ducksuck, Owners of NFL teams may own other sports teams as long as they are located in the same city as the NFL team, or in a city without an NFL team. For instance, Microsoft co-founder Paul Allen owns the Seattle Seahawks and the Portland TrailBlazers.
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If only I, we the fans had the funds
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I hear Frank McCourt wants in.
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Sandy Reply:
September 19th, 2012 at 6:18 pm
@Mel Powell, God help us.
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DesertKing Reply:
September 19th, 2012 at 6:23 pm
@Mel Powell,
Be is in the parking lot.
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Pay day is Friday. I’m good for $50.
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Who knows what’s really going on behind the scenes with regard to the WHY of this potential sale. Making a lot of money is obviously a huge factor. That said, it seems to me (in my vast ignorance of big corporate business) that AEG is just now starting to kick into high gear.
With everything going so well, doesn’t it make sense that the value of such an empire will only increase in the near future? One could say that is THE reason for selling now. One could also argue that it’s a terrible time to sell, which goes back to what is really going on behind the scenes. As a prospective buyer, I would want a very good reason on the WHY part.
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Jeff Reply:
September 19th, 2012 at 6:35 pm
@Paul Armbruster (KingsNewsDaily.com),
It’s also possible that Phil Anschutz is getting tired of running his empire. The guy is in his 70s (albeit early 70s) and he knows that he’s not going to live forever. As a result, maybe he’s figured that it’s time for him to sail off into the sunset with his billions and slow down.
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variable Reply:
September 19th, 2012 at 6:57 pm
@Jeff,
this is solely a pre-retirement cash grab by uncle phil…a savvy decision…imo…made at a time when AEG’s stock, viability, future commodities and committed investment value is at an all-time high…?
why not sell…?
sure…
in almost every way it a soft real estate market for the rest of us…buyer’s market and seller’s losing value…
but billionaires play on a different playing field – figuratively and literally – in their financial stratosphere…
this is a power move made by uncle phil and his organization for the long-term, guaranteed equity promised to them in real estate deals…you have to figure the city is relying a lot on AEG to produce a profitable economy downtown…this goes outside this business world and into politics…
the future….(????)…farmers field and it’s future tenant…st. louis, jacksonville, oakland, san diego, etc….have been promised going on decades now…i’ll believe it when i see it…(!)
…it’s exactly the right time to do this for AEG, uncle phil and cousin tim…
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swany Reply:
September 22nd, 2012 at 9:13 pm
@Jeff, Since when has someone so powerful ever rode off into the sunset. People like this have huge egos and drive. There is no slowing down for people like this. I say this is a political ploy for better negotiating terms with LA City and Farmers Field.
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Rich Hammond Reply:
September 19th, 2012 at 6:56 pm
I think three letters — NFL — play a big part in this. And I’m not even sure how, but that’s just how it smells to me.
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variable Reply:
September 19th, 2012 at 6:59 pm
@Rich Hammond,
yep…
so there’s a lot to be discovered as we, as usual, are on a need to know basis…
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Kingsfanone Reply:
September 19th, 2012 at 7:29 pm
@Rich Hammond,
That was my very first thought also. NFL. Think he can afford it now!
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KC23 Reply:
September 20th, 2012 at 7:05 am
@Rich Hammond, I totally agree. Reminds me of the Jack Kent Cooke situation when he wanted an NFL team. He sold the Kings and went off to Washington DC.
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Rainman Reply:
September 20th, 2012 at 2:45 pm
@Rich Hammond, Three words jump out at me…”Capital Gains Taxes.” It has been widely speculated that Capital Gains Taxes will be increasing substantially in 2013. If so, it would make economic sense for Uncle Phil to sell AEG before January 1st to save substantial taxes. I’m sure this has been in the planning process at AEG for several months and just became public this week. Do you think the NHL Lockout had any impact on AEG’s public announcement?
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Kingsfanone Reply:
September 19th, 2012 at 7:28 pm
@Paul Armbruster (KingsNewsDaily.com),
Theory of success, like the stock market or life itself, buy low and sell high. I agree with Jeff above also. Talk about a success story, eh? AEG is just that! A great time to sell!
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In lieu of cash I can contribute services. I will agree to be the GM for a 50.1% share.
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DesertKing Reply:
September 19th, 2012 at 6:42 pm
@Jeff,
I will do it for 50.08% and a nacho allowance equivalent to .01%
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All I that I can is that the KINGS Better stay in LA!!! Or there will be a lot of very upset fans including me!! Now lets get the hockey season started!
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So specifically what was the cost that Anschutz & Roski paid to get the AEG ball rolling?
gKg!
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flip this franchise
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I’ll throw in a couple hundred.
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Hello, you have reached the voicemail box for Dean Lombardi, general manager of the Stanley Cup Champion Los Angeles Kings Hockey Club. Sorry I can’t come to the phone right, since I am locked out of the building, but please follow the prompts or leave a message. If you feel like committing suicide due to the lock out, please hang up and dial 9-1-1. If you feel like going “postal” due to the lock out, please take your business to the Anaheim Pond or the Rogers Arena in Vancouver. If you are seeking information reference our players, uh, mmmm, please press “1″ to hear a precorded message from Commissioner Bettman. If you are calling to get information reference the best hockey team in the world, the LA Kings, uh, mmmm, please press “1″ again. If you are seeking information reference team ownership, uh, mmmm, please press “1″ again. If this is Uncle Phil, please press “2″ to be connected to Commissioner Bettman since you can’t seem to remember his number since you only talk to him once every other month. If this is Jeff Dunham, please press “3″ to reach my direct line so you explain to me how to remove Commissioner Bettman’s hand from up my backside. Everyone else, please leave a message and I will get back to you in September of 2013. Bye-Bye.
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Kingsfanone Reply:
September 19th, 2012 at 7:32 pm
@DesertKing,
Is this Peanut or the Skeleton?
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First rule of investing:
Buy low = Bankruptcy
Sell High = Stanley Cup Champs
Not unexpected really.
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mask0425x Reply:
September 19th, 2012 at 11:11 pm
@concussionman02,
yup… that/s exactly it!
now, just add a sign:
STANLEY CUP CHAMPS FOR SALE*
*cup not included
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At least you have the $2000 Rich. Where I come from, that’s called a positive balance sheet!
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My two cents based on nothing.
AEG has grown phenomenally fast. Rapid growth inevitably involves debt. Most sports teams while appreciating in value, struggle for years, if ever, to cash flow, particularly if acquisition debt is involved. Ditto development projects. Event promotion has heavy consistent labor costs and other fixed overhead with only occasional paybacks, while not all events actually make money.
AEG likely has large, non-cash equity but a mountain of debt acquired in a low interest rate environment and possibly little cash flow. If interest rates rise, it could put enormous pressure to service the debt and lower the market value of a highly leveraged entity. PA may see this as an opportune moment to cash in on the appreciated assets, eliminate a ton of debt and achieve a high price fueled by a low interest rate environment.
The prospect of higher corporate and individual taxes in the near future may also be a factor.
It would also free ownership of concern over the Loktionov situation.
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pautna Reply:
September 20th, 2012 at 9:41 am
@JackKentCooke, Very astute Mr. Cooke. Which is probably explains why you are (were) so successful! Plus, I love the last line. LOL!
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concussionman02 Reply:
September 20th, 2012 at 11:59 am
@JackKentCooke, bingo
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It has been cited before, but in an odd way, circuitous way Bruce McNall plays a part in AEG’s rise to fame & fortune.
His Kings ownership – through egregious spending & deception – became a house of cards…which collapsed, Sudikoff & Cohen (aka The Carpetbaggers) bought the team and then went into bankruptcy after a year or so. AEG & Roski bought in, shred the old Forum contract, then created Staples Center in 1999. AEG – armed with a sports franchise &, a venue & prime property – expanded through multiplication + addition from there.
Like Uncle Bruce or not, Uncle Phil has always had deeper pockets…and is a much smarter poker player.
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“Buy Low, Sell high”
Great timing for selling. Congratulations and thank you for building it, Mr Anschutz. I only hope you are somewhat selective on who takes over the reins to ensure the LA Kings have a chance to stay on top
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I hear Magic still has some $$$ to spend….what’s a few more billion to spend on few other LA teams!
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I’ll give you my $0.02
*crickets chirping*
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Guessing Rich is putting up 2K.
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