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In the end, Tim Leiweke’s departure from AEG was as swift as it was sudden. Late last week, stunned colleagues at the company he had built through indefatigable energy were blindsided by the news that their leader would be leaving. But after a 17-year run developing AEG into one of the top global sports and entertainment companies, his exit was proof of a time-tested business proverb: He who owns the gold makes the rules.
Just the night before his departure was announced, Leiweke was talking bullishly about closing the AEG sale in April, sources said, and Rob Stone, a Fox studio host, posted on Twitter that evening that Leiweke had been at a game being played by the AEG-owned Los Angeles Galaxy.
Click here for profiles of the executives who will be
leading AEG after the departure of Tim Leiweke
After news of Leiweke’s departure spread on Thursday, one source who tried to reach AEG colleagues found all his calls going straight to voicemail, which he said was a first. Another insider used the word “stunning” to describe the changes in the company, adding that while AEG wasn’t quite in the same crisis mode that followed the death of Michael Jackson, when AEG had a role in organizing the singer’s memorial service, it was close.
“AEG is Tim,” said a former AEG executive who described himself as being shocked at Leiweke’s departure. “I didn’t see them losing the vision and the fight that Tim has. I saw Tim leading this company into the next decade. This leaves them without a visionary, sales-driven leader.”
Leiweke’s sports vision played a massive role in helping to build the company, but it may have also played a role in torpedoing its sale. He was repeatedly frustrated during the sale process, and multiple sources portrayed Leiweke as being engaged while making presentations to potential bidders, but after the presentations, he was on the outside, trying to get more involved but rebuffed by Anschutz’s Colorado financial team and the Blackstone financial group handling the sale. One thing is clear: In talking with potential bidders, Leiweke expressed his usual optimism about completing the Los Angeles football stadium, and built that into the rich valuation that Anschutz wanted for his company — more than $8 billion. But such bullishness may have concerned bidders.
Tension was said to be building between AEG Chairman Phil Anschutz (foreground) and now-departed President and CEO Tim Leiweke.
Photo by:GETTY IMAGES
In addition, it become more and more evident that the NFL never supported AEG’s concept of keeping ownership of the proposed stadium in the developer’s hands, and when news emerged last month that the league had moved on from downtown Los Angeles to review other sites, AEG tried to control the damage to the auction process.
While Leiweke stressed his NFL ties, it was clear that he ruffled feathers along the way.
“He is very impressive,” said a source close to the league. “Frustrating, perhaps, at times in this process, but that was his job. No doubt some owners may have tangled with him along the way.”
Some were not as kind, saying his overall relationship with the league and some owners was strained.
While talk surfaced in early February that AEG was engaged in serious sales negotiations with Colony Capital and its partner, Qatar’s sovereign-wealth fund, as well as on-again, off-again talks with Guggenheim Partners, Anschutz was still not getting the price he wanted. The deal eventually became too challenging because of uncertainty surrounding estimates of future earnings, including around the Los Angeles stadium, and valuations of company assets, sources said. The uncertainty that interested bidders found when examining the books reportedly scared off investors.
As experts scrambled late last week to sort through what was next for AEG, insiders stressed that the changes will likely lead to a lower profile for the company and a renewed focus on building asset equity. Even though Anschutz, 73, recently had back surgery, sources said he has the energy to lead AEG and believes strongly that he can improve company value. Many expect new CEO Dan Beckerman, 43, to take a more methodical approach to building AEG’s current holdings (see Page 9), but most remain skeptical of the future development of Farmers Field unless there is a major shift in the economic structure of AEG’s proposal.
As for Leiweke’s future, don’t expect him to be on the sidelines for long. Many people contacted for this story suggested that his name would be put back in the mix for the long-vacant CEO role at Maple Leaf Sports & Entertainment, for which his name had been floated before, and for other top jobs in the industry. All around sports, insiders rave at what the 55-year-old dealmaker built over the years and the mammoth will and ability to get big projects done.
Leiweke celebrates last year’s MLS Cup win with David Beckham.
Photo by:GETTY IMAGES
Others marveled at his vision in diversifying AEG.
“Getting into the live music business started the formation of the brand of AEG,” said Jeff Knapple, executive vice president of Van Wagner Sports and Entertainment, who has known Leiweke since 1989. “In 2001, it was just Staples Center, the Kings and MLS. The other things came about as Tim made a decision to get into the music business. He hired Randy Phillips, (president and CEO of AEG Live) and got deals done in Las Vegas with Celine Dion at Caesars Palace. Through sheer determination he made things happen. The live entertainment piece is not something most in the sports world did. Whatever happens, he created an empire.”
“Tim was a visionary,” said Tim Harris, senior vice president for the Los Angeles Lakers, of which AEG is a co-owner. “The words partner and partnerships are thrown around so easily these days, but Tim walked the walk.”
The words vision and passion were used repeatedly to describe AEG’s former leader.
“Tim is a very passionate guy, and it took passion to build what I believe is the premier sports and entertainment company in the world,” said Richard Schaefer, CEO of AEG-owned Golden Boy Promotions. “He will have many opportunities. I can’t wait to see what else Tim Leiweke has in store for us.”
Staff writers Daniel Kaplan, Bill King, John Lombardo and Don Muret contributed to this report.
■ Philip F. Anschutz, chairman
■ Dan Beckerman, president and CEO
■ Ted Fikre, vice chairman and chief legal and development officer
■ Jay Marciano, chief operating officer
■ Todd Goldstein, chief revenue officer
■ Steven Cohen, chief strategy officer
Who is Dan Beckerman?
A career snapshot of AEG’s new president and CEO
Dan Beckerman, 2009
Photo by:ALEX GORT SR. / GORT PRODUCTIONS
■ Education: B.A., economics, UCLA, 1992; MBA, Anderson School at UCLA, 1996
■ Accountant, Arthur Andersen, 1992-94
■ VP of finance, Los Angeles Clippers, 1995-97
■ VP and chief financial officer, Los Angeles Kings, 1997-2000
■ Executive vice president and chief financial officer, AEG, 2000-08
■ Chief operating officer and chief financial officer, AEG, 2008-13
■ Named AEG president and CEO on March 14
“Shoot straight.” Also, “I never ask anyone on my team to do something that I would not be willing to do myself.” — Beckerman, 2008 and 2009
On the ground
Beckerman was outgoing President and CEO Tim Leiweke’s point man for AEG’s rapidly expanding global empire during the past decade-plus, during which he worked with financial institutions to raise more than $5 billion. He also was principally involved in putting the finishing touches on L.A. Live, AEG’s $400 million mixed-use development across the street from Staples Center, and has worked across virtually every aspect of AEG’s business, from raising capital and venue strategy to team budgets and real estate.
Inside takes through the years
“He put all of the enthusiasm and vision from Tim into a balance sheet and made sure it made sense. He in many ways is as responsible as Tim is for what has happened with AEG. He’s highly respected, and I think AEG is in extremely capable hands with Dan. If I had the financial resources of a Phil Anschutz, I would certainly entrust my wallet to Dan. He is as capable an individual as I have ever met.” — Richard Schaefer, Golden Boy Promotions CEO
“He is my long-range thinker, and for a guy as young as he is, it’s amazing that he sees the world 20 years out and not two years out. That shows an amazing amount of patience and maturity for him as a business leader.” — Tim Leiweke, 2009
“Throughout AEG’s life span, it’s been all about development and growth, but as we look forward, we are taking a more measured approach to new capital projects.” — Beckerman, 2009
“I think for us it’s always been about our international expansion and the relation between venues and the content that fills them. The way people view and enjoy content is always changing, but the live experience will always be critical to us.” — Beckerman, 2008
“Dan is the most unique financial guy I’ve ever met. He knows how to sell, he knows branding and marketing, he knows how to make deals. It’s been amazing to watch his growth, and he is as responsible as anyone for what AEG is today.” — Leiweke, 2008
“I’m a pretty hands-on manager. I get involved in a lot of the details in the day-to-day operations for our various businesses.” — Beckerman, 2003
Who is Ted Fikre?
A career snapshot of AEG’s new vice chairman
■ Age: 45
Ted Fikre, 2005
Photo by:ANDY BERNSTEIN
■ Education: B.A., economics, Princeton University, 1989; J.D., Stanford University, 1994
■ Assistant economist with the Federal Reserve Bank of New York, 1989-1991
■ Associate, Latham & Watkins, 1994-97
■ Vice president and general counsel, Los Angeles Kings and Staples Center, 1997-99
■ Executive vice president and general counsel, Los Angeles Kings and Staples Center, 1999-2000
■ Executive vice president and general counsel, AEG, 2000-08
■ Chief legal and development officer, AEG, 2008-13
■ Named vice chairman and chief legal and development officer on March 14
“Some people excel at talking and some at listening; some are good thinkers and some are good leaders; some are proficient at numbers and some with words. Many people in the workplace have one or two of these attributes, but few individuals, if any, possess them all. Those who come close are the ones who succeed in business.” — Fikre, 2005
Inside takes through the years
“There’s an utter contrast between his superior intellect, work ethic and talent, and the fact that he has no ego.” — David Rogers, Latham & Watkins partner, 2005
“The combination of Phil’s willingness to put his money at risk and Tim’s ambition is a great recipe for growth, and I’m lucky to be along for the ride.” — Fikre, 2005
Who is Jay Marciano?
A career snapshot of AEG’s new chief operating officer
Jay Marciano, 2007
■ Chief strategy officer, AEG Live, 2003-05
■ President, Madison Square Garden Entertainment, 2005-11
■ President and CEO, AEG Europe, 2011-13
■ Named COO of AEG on March 14
Inside takes through the years
“There is no one in the world more qualified to lead AEG in Europe. His exceptional skills and experience with facilities and content for these facilities is recognized as being one of the most unique and extraordinary in the industry. It was critical for us to find a person of his stature that can manage our facilities division, our content division, our entry into the ticketing industry as well as our sports and development divisions across Europe. Jay was our first choice.” — Tim Leiweke, 2011
Who is Todd Goldstein?
A career snapshot of AEG’s chief revenue officer
Todd Goldstein, 2011
■ Education: B.A., communications, University of Colorado, 1993; MBA, University of Denver, 2009
■ Worked for years with the Denver Nuggets, Colorado Avalanche and Pepsi Center
■ Joined AEG as a sales executive in 2001
■ Promoted to senior vice president of global business partnerships and, in 2008, president of AEG Global Partnerships
■ Recently elevated to chief revenue officer of AEG
“Listen, learn and be passionate.” — Goldstein, 2011
Inside takes through the years
“A lot of people pay lip service to this, but Todd really approaches deals from a partnership standpoint.” — Chris Weil, Momentum Worldwide CEO, 2011
“Especially in the most complex deals, you’ve not only got to get clients to embrace your vision, but make them think that it’s their vision.” — Goldstein, 2011
“We call him the Tasmanian Devil. I’ve never seen anyone with so much energy, and he’s become the master of creating contractually obligated income.” — Tim Leiweke, 2008
Who is Steven Cohen?
A career snapshot of AEG’s new chief strategy officer
■ Education: Middlebury College, 1983; BSc, economics, London School of Economics and Political Science, 1985; J.D., Boston University, 1989
■ Partner, Hogan & Hartson, 1997-2001
■ Managing director, Anschutz Investment Co., 2001-10
■ Executive vice president, The Anschutz Corp., 2010-present
■ Named AEG chief strategy officer on March 14
— Compiled by SportsBusiness Journal staff
Editor's note: This story is revised from the print edition.
Early in Jimmy Haslam’s marriage, he’d often take his wife, Dee, on date nights in Knoxville, Tenn., their hometown and headquarters of his dad’s truck stop business.
Many of those outings began with detours to those stations, where Haslam mowed lawns, cleaned bathrooms and checked on stores before he and Dee left for the remainder of their evening.
Jimmy Haslam will continue to run the Pilot Flying J truck-stop company while he works to turn around the Browns.
Photo by:STEVEN BRIDGES
“There is enough capacity in Jimmy Haslam,” said Mike Edwards, who went to the University of Tennessee with Haslam and is president and CEO of the Knoxville Chamber of Commerce. “He would be less efficient if he tried to back away. What is counterintuitive but is absolutely true is [that] the Cleveland Browns are going to have a full-time owner, Pilot is going to have a full-time owner, and this community has a full-time leader.”
Haslam agreed to buy the Browns in August. Shortly thereafter, he said he would step down as Pilot CEO, hiring former PepsiCo President John Compton as his replacement. So news last month that he’d reversed course and would be returning as Pilot’s CEO sparked concern in northeastern Ohio.
The subject of absentee ownership is a raw one in Cleveland, Haslam having bought the team from Randy Lerner, who lives in New York and owns the Aston Villa franchise of the English Premier League.
“People might disagree with [the] decision,” Haslam said of his change of heart to run Knoxville-based Pilot, “but I don’t think anybody would question our passion, our commitment [to the Browns].”
Haslam’s father, Jim Haslam II, is a legend in Knoxville, where he captained Tennessee’s 1951 national championship football team. After graduating, he stayed in the small, mountain city, and started Pilot with one station in 1958. Today, his name all but bedecks what’s become a vibrant community of more than 300,000 — visible on university buildings and charity nameplates.
It’s his two sons, however, who have transformed the Haslams into eastern Tennessee royalty. Jimmy’s brother, Bill, at one time the president of Pilot and the mayor of Knoxville for eight years, is now the state’s governor. Jimmy, while athletic and fit, did not follow in his father’s fabled sportsman path, but he more than made up for it on the business side.
After Haslam became Pilot CEO in 1997, the company expanded from 100 stations to 600, as Haslam spotted emerging trends in the business, including fast-food franchising. He also doubled down on distinguishing Pilot’s truck stops from the competition, boasting what he called the cleanest showers in the business and amenities such as workout rooms.
Throughout his business success, he has remained focused on Knoxville, as he and Dee are seen as leaders in the city’s civic and charitable efforts.
“I don’t know where Knoxville would be without them,” said local United Way chapter head Ben Landers of the Haslams.
Haslam, who raised funds for his brother’s gubernatorial run, still holds the United Way Knoxville record for greatest percentage increase in giving when he ran the 1986 drive. The runner-up, coming in one percentage point behind? The 2000 edition, helmed by Dee, Haslam’s wife, who runs a local video-production business.
Haslam is known as a hands-on CEO at Pilot Flying J, and he’s doing the same for the Browns.
Photo by:STEVEN BRIDGES
“He doesn’t want to just give his money,” said Margie Nichols, UT’s vice chancellor of communications.
Landers recalled driving across Arizona’s Sonoran Desert and coming across a Pilot location. He tried to chat up a non-talkative cashier, so he mentioned he hailed from Knoxville and knew Jimmy Haslam.
“‘Look,’ she said to me,” Landers recalled laughing, “‘Jimmy Haslam was just here yesterday and underneath this cabinet.’”
When people ask Haslam why he visits stations so often — he’ll visit some as frequently as twice weekly — he said his response is always the same: “Because that’s our business.”
Haslam promises he will shower the Browns with his same hands-on philosophy of customer service.
“The most important job is to help the players and coaches win,” he said, seated in his spartan office at Pilot headquarters, tucked away in a leafy section of Knoxville. But after that, he added, “Everything we do should be around having the fans have a great experience.”
At one of his first games last year, Haslam sat for a half in the Dawg Pound to pick the minds of his team’s most ardent fans about what they would like to see changed for their franchise.
Back in his office, he reeled off parking, concession lines, restrooms (which presumably he will no longer be cleaning), scoreboards and security as areas he will improve in 2013. Haslam and his new team president, Alec Scheiner, and team CEO Joe Banner are meeting soon with architects to develop a renovation plan for what is now FirstEnergy Stadium. (One of his first moves as owner was to sell a corporate name to what had been Cleveland Browns Stadium.)
There are 15 years left on the 30-year lease, so Haslam is hesitant to commit a large sum to an overhaul. Already well aware of public reaction and passion for the Browns, he also declined to talk about whether a new stadium is needed in the not-so-distant future.
Haslam (left, with First Energy’s Tony Alexander and Browns CEO Joe Banner) quickly moved to sell stadium naming rights. Below: Haslam was in the Steelers ownership group with Art Rooney II and Dan Rooney before buying the Browns.
Photos:AP IMAGES (above); GETTY IMAGES (below)
“I have got to be a little careful because Randy Lerner and I have a great relationship, but we didn’t feel that the Browns were as aggressive on the business side as they needed to be,” he said.
Others have used the term “complacent,” happy to rely on the club’s famously passionate though well-disappointed fan base. Banner, for example, mentioned that the team’s website did not even have a chat area. It does now.
In addition, the Browns are centralizing all business functions at a renovated training complex, moving sales out of the stadium so all units can operate under one roof. The club recently dropped the PSL requirement for new season-ticket holders, and the team is keeping ticket prices flat for a fifth straight year. Haslam is investing team cash flow in capital improvements like the training facility, telling his family members who invested with him not to expect dividends any time soon.
If all goes well, Haslam believes his team can double in value within his first 10 years of ownership, reflecting the aggressive growth rates the league has established but also the opportunities he sees locally.
Haslam knows that to achieve that kind of success, he must motivate his team, get involved, but then back away at the right time.
Before joining the Browns, Banner said he thought it a contradiction for an owner to profess to want to hire great people for key functions but then also act hands on. There is a deep tradition in the NFL of owners who are too down in the weeds.
“He finds a balance, leaving people here aware that he is very involved, very informed — and at the same time, we feel we have space,” Banner said. “It is a very hard thing to do as a manager.”
The football business
Haslam joined the NFL in 2009, purchasing 15 percent of the Pittsburgh Steelers. He’d wanted to buy the Tennessee Titans, so he initially rebuffed the Steelers’ investment banker, Morgan Stanley’s Randy Campbell. But Campbell convinced Haslam to marry an upcoming Pilot station visit in Pittsburgh to a meeting with team owners Dan Rooney and Art Rooney II.
Haslam quizzed Dawg Pound fans on changes they’d like to see at the franchise.
Photo by:ICON SMI
“If I had my choice, I would not have had him buy a team in our division,” replied Art Rooney, when asked how he would feel if the Browns succeeded in part because the Steelers trained their owner. Haslam will formally unwind his Steelers stake this week, with owners scheduled to vote on the sale of his remaining shares to team insiders.
The NFL approached Haslam last June with the Browns opportunity, and having learned that Titans owner Bud Adams planned to keep the team in his family, the Pilot CEO jumped at the chance to become the Cleveland owner. He first met with Lerner July 2. They signed an agreement 31 days later. Haslam paid almost $1.1 billion for the team, far and away the most for an NFL team. (Stephen Ross’ nearly $1.1 billion purchase of the Dolphins also included a stadium.)
“We didn’t choose Cleveland; it was open and available,” Haslam said, asked why he bought the Browns. “But I will be honest: I take no credit. There is a lot of luck in life; it was a great selection.”
That informed decisiveness and quick action are Haslam hallmarks.
A rapid-fire speaker, Haslam answers questions in rushed, efficient succession with no digression, reflecting his tight schedule. His nondescript, non-corner office captures that style: nothing ostentatious; only what’s necessary.
Business stats are scrawled on his white office walls, made of what appears to be malleable wallboard. A TV is tuned to CNBC, informing him of the oil and coffee prices that are key indicators in his world. The only evidence betraying his NFL connection is a football on the windowsill Commissioner Roger Goodell sent Haslam after he bought the club, resting next to a Browns candy dispenser. Goodell received the ball after the reincarnated Browns’ first game in 1999.
“Jimmy doesn’t wear a coat and tie to work,” said Nichols, of the University of Tennessee, describing Haslam’s no-nonsense style. The Haslams, she continued, “are not braggadocious people. The governor wears a Timex plastic watch. They are not the Rolex kind of people.”
Browns Day, Pilot J Day
If Haslam seems in a hurry, that’s because he is. One of the first questions he asks potential employees is, Are they in a bigger hurry than their parents? The answer better be yes.
Besides Pilot and the Browns, Haslam is a major civic and charitable figure in Knoxville, and an emerging one in Cleveland. Pilot also recently expanded into selling diesel fuel to oil and fracking businesses, so he oversees that unit, which is based in Oklahoma.
And he has no plans to cede his common touch of visiting stores and meeting the people who work for him. The CBS show “Undercover Boss” approached Pilot, but Haslam turned them down because he said almost everyone at the company knows him, and well.
To cope with his many masters, he compartmentalizes his days and environment. There is no TV tuned to NFL Network in his Pilot office because he said he wants to keep his worlds separate.
“Yesterday, [with] our energy services business, we have a big operation in Oklahoma City, and I was there from 9:30 till 5:30, and I focused distinctly on that. Today is a Pilot Flying J day. Tuesday I will be in Cleveland, and we are going to focus on our free agency process,” he said.
For the Browns, he is relying on one of his key business philosophies: Find and hire the best people, manage them, but get out of their way. He is fond of saying he is not as smart as the people who work for him, though Banner was one to call Haslam the smartest man in the room. The former Philadelphia Eagles president, Banner was Haslam’s first hire with the Browns. Proskauer Chairman Joe Leccese introduced the two prior to the closing of the sale. The duo met in July at Banner’s vacation home in Martha’s Vineyard, Haslam and his wife traveling from their place in nearby Nantucket.
Banner then pointed the way to the next personnel moves: Scheiner, a former Dallas Cowboys in-house counsel who now is Browns president, and the team’s new chief revenue office, Brent Stehlik, from the San Diego Padres.
On the football side, Haslam and Banner quickly cut ties with the old regime, naming a new head coach, Rob Chudzinski, and a new general manager, Michael Lombardi. Haslam personally spends time in the interviews, spending more than 10 hours with the new head coach.
“I am highly impatient,” Haslam said of what he expects to occur on the football field. “If we don’t win, and win consistently, it will be my fault because I picked the wrong people.”
For those from Knoxville who know him intimately, that the Browns might not turn around their on- and off-field fortunes is unfathomable.
“He is not in business just to be in business. He is in it to be the best,” said Edwards, Haslam’s old college friend. “And that will translate to the Browns.”
Jimmy Haslam’s purchase of the Cleveland Browns included significant due diligence regarding one of the greatest challenges currently facing the game of football: the liability that concussions might pose to the sport.
Last year’s Browns sale was the first NFL franchise transaction since the issue of concussions has exploded so forcefully into the nation’s consciousness, and as more and more former NFL players sign on to litigation against the league regarding the matter.
“When we started doing our due diligence, this was a concern,” Haslam said. “I think we feel very good there is no smoking gun that is going to come back like there was in cigarettes. Everyone I have talked to, and I have talked to all kinds of people, feels very good there is no kind of suppressed evidence.”
The thousands of retirees suing the league contend the NFL hid evidence of the dangers posed by concussions. Many of those lawsuits have been consolidated into one case, filed in a Philadelphia court. The league is seeking dismissal of that complaint.
Haslam declined to identify the individuals with whom he spoke on the subject, but he said there were between 10 and 20 people ranging from other owners to people specifically versed in the medical matter.
“The challenge for the NFL is the proper balance,” Haslam said. “Face it: Football is a violent game, and every player who signs up for it understands that, and that is part of why it is so popular. And still, protecting the players from head injuries [is crucial].”
Haslam would not have valued the Browns, in the bottom-quarter of NFL teams by revenue, at his purchase price of $1.1 billion if he thought concussions could sock him and the league’s other owners with huge legal payouts. In fact, from his discussions with the NFL, and considering the aggressive growth rates the league has established, he feels the value of the Browns could double in the first 10 years of his ownership.