SBD/September 21, 2012/Facilities

AEG Sale Could Help Or Hinder Farmers Field Stadium Project In L.A.

Farmers Field could either be fast-tracked or scrapped amid AEG's planned sale
There are “two ways to interpret" the proposed sale of AEG as it relates to the NFL’s possible return to L.A. -- Farmers Field is “either going to be fast-tracked or wind up on the conceptual scrap heap with dozens of other failed stadium dreams,” according to Sam Farmer of the L.A. TIMES. If AEG President & CEO Tim Leiweke “can bring in a new billionaire who's more willing to do a deal that the NFL likes -- whether that's [Lakers investor] Patrick Soon-Shiong or someone else -- it greatly increases the chances that L.A. will have a team in the next few years.” Sources said that Soon-Shiong “already has met” with NFL Panthers Owner Jerry Richardson, the NFL Management Council Exec Committee Chair, and that it "wouldn't be a reach to suggest he's met with others in the league, maybe including Commissioner Roger Goodell.” Farmer writes, "Say Soon-Shiong takes the handoff from [AEG Chair Phil] Anschutz and carries the ball across the goal line. It could certainly happen, with the downtown proposal moving closer to getting its environmental approvals.” But there also is “a very different way to look at the AEG sale.” Anschutz “looked at the NFL deal and said it doesn't make sense for him." Farmer: "Is that the reason why he's selling the entire company? Probably not. But the NFL deal didn't work for him. That says something” (L.A. TIMES, 9/21). An L.A. TIMES editorial stated the proposed sale is an “unsettling turn of events, and before the City Council moves forward, it should demand a full explanation of the timing and ramifications of the sale, as well as assurances that the city's interests will be protected. ... Los Angeles needs to know what it's getting into” (L.A. TIMES, 9/20).

JUST ONE FACTOR: Former Dodgers Vice Chair Steve Soboroff, who was “instrumental in working with AEG to build Staples Center,” said that the Dodgers’ sale for $2.15B was not “the key factor in AEG’s decision, though certainly a factor.” Soboroff said, “They feel the stars are in alignment, that the timing was right for them.” He added, “I believe the new buyer probably will have more of a penchant, passion for football and less for soccer than Phil. From that perspective, depending on who the new owner is, it’s probably a positive" (L.A. TIMES, 9/21).

COMBINATION PLATTER: In N.Y., Michael De La Merced cited sources as saying that AEG’s “combination of real estate, entertainment and event promotion” is what has “so many would-be buyers salivating.” The sources “describe the model as a ‘virtuous circle’ that draws in income from rents, ticket sales, sponsorships and many other sources.” It also is “what makes valuing the company so daunting” (NYTIMES.com, 9/20). REUTERS’ Jeffrey Goldfarb wrote, "The privately held Anschutz portfolio is packed with trophy assets," which makes it “more like a blend” of MSG, which trades at "30 times expected earnings next year,” and EPL club Manchester United (REUTERS, 9/21).
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