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COMSAT DEALS LOOK TO MERGE SPORTS AND ENTERTAINMENT
Published October 28, 1994
The Nuggets "moved closer to a new arena yesterday when their parent company, COMSAT Video Enterprises, announced a tentative deal to make The Anschutz Corp. an equal partner in the facility." The deal will allow construction to begin as soon as the COMSAT-Anschutz partnership reaches a deal with the city of Denver. The arena will be built on 43 acres of land Anschutz owns, and the two companies will share equally in the $110M construction cost as well as in revenues. The deal "does not mean that Anschutz owns a part of the Nuggets." Also, the deal does not make Anschutz an equal partner in the TV production studios that COMSAT wants to build near the new arena. COMSAT and Anschutz both have a piece of the new Elitch Gardens, an amusement park across from the arena site (Christopher Lopez, DENVER POST, 10/28). STUMBLING BLOCKS: The Nuggets have a contract to play in McNichols Arena through the 2007-08 season, so the city must release them from that obligation before construction of an arena can begin. Denver Mayor Wellington Webb has "voiced strong support for the Nuggets proposal in recent weeks -- so much so that many people believe the team's plan is a 'done deal'" (Lopez, DENVER POST, 10/28). The city stands to lose about $28M over the 14 years remaining in the Nuggets' lease should the Nuggets move into a new arena. Webb has said that the city will not agree to any deal that involves a "reduction in the revenue generated at McNichols" (John Rebehook, ROCKY MOUNTAIN NEWS, 10/28). PLUSSES OF NEW ARENA: The new arena "would position COMSAT to acquire" an NHL team. COMSAT President Charlie Lyons has said an NHL team is necessary to make the proposed arena "financially viable" (ROCKY MOUNTAIN NEWS, 10/28). OTHER DEALS: COMSAT also announced the acquisition of Beacon Communications, a small L.A. production company that has made movies like, "The Commitments." COMSAT wants to "expand its programming beyond" showing Nuggets games. COMSAT's deal "comes on the heels" of Bell Atlantic Corp.'s reported deal to start a film production company with two other Baby Bells (Doug Abrahms, WASHINGTON TIMES, 10/28). With the acquisition of Beacon, "COMSAT joins the ranks of formerly staid telecommunications companies that have felt the lure of Tinseltown." Beacon's distribution agreement with Sony will carry over in the new deal. COMSAT CEO Bruce Crockett: "Telecommunications and entertainment are merging. These ventures put us on both sides of this convergence and give us greater control of content, positioning COMSAT as a major player in the sports and entertainment business" (Michael Dresser, Baltimore SUN, 10/28).