AEG and L.A. and Deflated Expectations | KCET
AEG and L.A. and Deflated Expectations
Questions. Questions. Did the reclusive Denver billionaire have a falling out with his ubiquitous L.A. fixer, leading to a break-up of the Anschutz Company? Did Phil Anschutz suddenly discover that AEG's sort-of-empire of sports and entertainment properties fit poorly with the oil and gas business from which his billions were made?
Or did the NFL, discover that no team owner would stomach the kind of financing/participation deal that Anschutz demanded?
And more to the point, what combination of willful deception and self-delusion allowed Mayor Villaraigosa and the city council to put so much trust in the NFL and a cranky billionaire and so little trust in us?
Predictably, more billionaires are already being rolled out - the elderly art patron, the biotech industrialist with a taste for sports - on whom the mayor and city council can graft new dreams of what the NFL may permit Los Angeles to have.
Meanwhile, regular Angeleños remain in the dark. At a news conference on Wednesday, a testy Villaraigosa admitted that he was the only city official who knew about the sale before it was announced late on Tuesday evening. The city's Chief Administrative Officer Miguel Santana and even Councilwoman Jan Perry, who is AEG's loudest cheerleader, were completely surprised.
Villaraigosa also admitted that he had known about the sale for weeks, raising questions about the legitimacy of the process that brought the planning commission's approval last week of the stadium's environmental report. With equal haste, the city council is supposed to approve the stadium plan next week, even though nothing can be known of AEG's buyer or what re-dealing the buyer and the NFL will require of the city.
Just trust me, the mayor seemed to say.
It's still possible that a stadium will be built and that one or two NFL teams will play in it sometime after 2014. But the prospects aren't good.
It will take several months to prepare bid packages for AEG, which controls or owns a mixed bag of sports teams, stadiums, and entertainment business with assets not only in Los Angeles but in London, Brazil, Malaysia, Australia, and Qatar. Despite the panting of sports columnists and politicians, the likely buyer of AEG will not be an L.A. billionaire but a hedge fund or real estate investment trust that will break down AEG's components into their profitable parts.
AEG's properties in Los Angeles are a relatively small part of that package. And a speculative stadium deal is just about worthless in that context.
In the months while AEG prepares itself for sale and its eventual buyer processes the company through "creative destruction," NFL Commissioner Roger Goodell has plenty of time to work the league's sure-fire L.A. card to extract new concessions from cities worried that their team will skip town. A quickie marriage of stadium and team isn't assured, even if the Chargers (San Diego) and the Rams (St. Louis) are said to be itching to get hitched.
The NFL has all the cards in this game and will play them only when team owners are certain to win a much better deal from the city than the one AEG President Tim Leiweke got.
The power of team owners and league officials may be the real reason why Anschutz threw in his hand - too many decisions about the future of his company were being made by other people, including Tim Leiweke.
Angeleños might learn from Anschutz's hardheaded reaction. Too many of the decisions about our future are being made by other people - self-interested billionaires, NFL team owners, clueless city council members, and a mayor who prefers dealing in the dark.
Tim Leiweke repeatedly told reporters that the sale of AEG isn't about us or even about Los Angeles. It's not personal; it's business. "(Phil Anschutz) was always going to have an exit strategy," he said. "Phil builds assets and sells them."
So, one more question. Why did we think that a stadium, an L.A. Live, a Staples arena, a hotel - any of it - was anything other than deals to be made, deals to profit Phil Anschutz, and deals to be walked away from when they proved insufficiently profitable?