In the summer of 1987, the reclusive Philip Anschutz, then a billionaire in the making, thrust himself into the public eye to pitch Denver officials on an entertainment destination anchored by a new convention center, amusement park and 1,450-room hotel.
“Am I crazy?” Anschutz said during an impassioned presentation. “My opponents say I am, but I disagree. I see here a tremendous opportunity for a fantastic place waiting to happen.”
Proposed for land in the Central Platte Valley, the project was the farthest from the downtown core of the three competing convention center bids, contributing to its defeat.
Anschutz would ultimately create a similar destination — along with one of the world’s largest sports and entertainment empires. But he took that vision to Los Angeles, where he’s trying to add a pro football stadium to Anschutz Entertainment Group, or AEG.
Now, more than 25 years after that dead-of-summer sales pitch in Denver, the still-notoriously private tycoon is once again raising his public profile to prove his commitment to bringing an NFL team back to L.A.
Last month, the 73-year-old removed the “for sale” sign from AEG and announced the departure of longtime right-hand man Tim Leiweke, whom he had lured from the Denver Nuggets in 1996 to run the company.
Those moves were more shocking than when Anschutz unexpectedly put AEG on the market six months earlier. The Los Angeles-based company’s assets include a variety of sports franchises, venues and services, including pro hockey’s L.A. Kings, the O2 Arena in London, concert promoter AEG Live and the Coachella music festival.
The centerpiece is the Staples Center sports arena and the adjacent L.A. Live, a glitzy project that includes a 54-story hotel and other attractions. Civic leaders hail the complex as an economic development gem that transformed a dilapidated neighborhood overrun by seedy bars and hotels catering to the marginally homeless into a downtown hot spot attracting tens of thousands of visitors on any given night.
With the abrupt departure of the operation’s frontman, Anschutz embarked on a Southern California publicity tour. Area sportswriters and business officials were taken aback not only by his decision to grant his first extensive media interview in decades, but by the sight of Anschutz sitting courtside at an L.A. Lakers game at Staples Center.
“It was a sudden shock to the system for the sports-business landscape, not only in Southern California, but nationally,” Los Angeles sports-business consultant Jeff Marks said of the events that unfolded in mid-March.
It clashed with Anschutz’s reputation as a dealmaker content with staying behind the scenes. In Denver, Joe Nacchio ran the show at Qwest, the fiber-optic communications company Anschutz founded in 1988. In Los Angeles, Leiweke was the man.
The recent media tour was a calculated move by Anschutz to spread the message that he is still interested in bringing an NFL team back to L.A. In a March 14 interview, Anschutz said he has personally invested $45 million into Farmers Field, a multibillion-dollar football stadium project with a naming-rights deal but no team.
“That is a substantial investment, and I will tell you I didn’t do it just for the fun of writing checks,” said Anschutz, who built his early fortune through oil fields and railroads.
Some observers say the question mark over the NFL stadium was a key reason Anschutz couldn’t sell AEG, which had been expected to fetch bids of up to $10 billion. Anschutz wants to control the stadium’s operations but not the team that plays in it, an unusual arrangement that the league and team owners apparently aren’t fond of.
“If that particular project wasn’t on the books, would people have looked at the success it already has instead of betting on the if-come of the NFL?” said Chris Lencheski, president of Front Row Marketing, a subsidiary of Comcast Spectacor, an AEG competitor.
Lencheski also said AEG is hard to value because of AEG Live, a concert-promotion business that relies on a “Justin Bieber” strategy.
“A great deal of their revenue is born through the concert-promotion business, which they are very successful on,” Lencheski said. “However, you have to have tours. Then you’re dealing with the fact that tours have to be insatiable. … How long can you run a Justin Bieber strategy?
“It doesn’t take very long for tours to become financially viable to then all of a sudden not necessarily catching the taste of the customer.”
AEG officials insisted from the get-go that the company would not be chopped into pieces for a sale. Spokesman Michael Roth didn’t respond to interview requests from The Denver Post.
Leiweke hasn’t spoken publicly about his departure, which came just months after he signed a five-year deal that sources said included a profit-sharing interest in AEG.
Between the failed Denver convention center bid and the opening of Staples Center in 1999, Anschutz amassed a multibillion-dollar fortune, thanks in large part to the sensational rise of Qwest, which started as a side project of his railroad business. Forbes pegged Anschutz’s net worth at $1.1 billion in 1988. After Qwest’s initial public offering in 1997, his fortune surged to $7 billion.
In 1995, Anschutz was entangled in a messy breakup with business partner Ascent Entertainment Group, then-owner of pro basketball’s Denver Nuggets. The disagreement centered on Anschutz’s effort to obtain a stake in pro hockey’s Colorado Avalanche and stalled the development of a new sports arena for the teams.
Ascent agreed to buy Anschutz’s interest in the Nuggets as well as more than 40 acres from Southern Pacific Transportation Co. in the Central Platte Valley, where Anschutz had wanted to build his entertainment and convention center complex. Anschutz held a sizable stake in Southern Pacific at the time. The Pepsi Center, which replaced McNichols Sports Arena, was ultimately built on the Platte Valley land.
After he couldn’t get a piece of the Avs and the new arena, Anschutz launched his foray into Los Angeles by purchasing the Kings with another business partner, Majestic Realty’s Ed Roski. Anschutz and Roski previously worked together on commercial developments along the Southern Pacific Railroad.
“Ed approached (Anschutz) about doing an arena for the Kings, who were looking to get out of (their former home),” said John Semcken, executive vice president at Majestic. “Then the Kings went into bankruptcy, and they bought the team.”
Several sites were under consideration for the new arena, when Steve Soboroff, a deputy mayor to former L.A. Mayor Richard Riordan, approached Roski and Anschutz about building an arena on the Los Angeles Convention Center land. The convention center was experiencing annual losses in the $19 million range — money coming out of the city’s general fund.
Roski and his team did the initial work in getting the project through the City Council — despite threats of a referendum opposing it and other pushback. Once construction started, however, it was Anschutz’s Leiweke-led team that took over the Staples Center development and all the other projects related to L.A. Live.
“Neither Phil nor Tim really understood the political landscape of Los Angeles at the time,” Semcken said. “Ed did, and we ended up negotiating the deal. But it was Phil’s money that paid for everything.”
Roski and Anschutz remain partners in the Kings, Staples Center and L.A. Live, Semcken said.
Construction on Staples Center was completed in 18 months. A jobs-training program was launched to provide work for those who lived in the immediate area. New restaurants catering to a higher-priced clientele opened, and there was a boom in condominium development throughout the previously dilapidated neighborhood known as South Park.
Soon thereafter, work began on the L.A. Live complex — with its theaters, shopping and restaurants. AEG, after several false starts, was able to persuade JW Marriott to build its 54-story hotel with more than 900 rooms connected to the convention center.
The complex now includes the Grammy Museum, the Nokia Theatre, a movie theater and other amenities.
“L.A. Live has been an amazing success,” said David Carter, executive director of the USC Marshall Sports Business Institute. “It may be transferring sports and entertainment, and related activities such as shopping and dining, from other regions throughout SoCal, but it has been the primary reason for the renaissance of downtown Los Angeles.”
Despite AEG’s success in Los Angeles, retired Denver City Councilwoman Cathy Reynolds, who staunchly opposed Anschutz’s convention center proposal, said she has no regrets.
“It was taking too much entertainment attention away from the performing arts area, which we were in the middle of really developing,” said Reynolds , who served on City Council for 28 years. “If we moved that synergism out of downtown, I think it would’ve been deadly for downtown Denver.”
Rick Orlov of the L.A. Daily News and Denver Post librarian Barbara Hudson contributed to this report.
Andy Vuong : 303-954-1209, avuong@denverpost.com or fb.com/byandyvuong
