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Volume 23 No. 24
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Anschutz a rock for the MLS

As recently as 1999, Philip F. Anschutz was the fifth-richest person in the world, according to Forbes. His fortune is estimated at close to $10 billion.

His deep pockets haven't dissuaded sports business observers from questioning the wisdom of letting Anschutz serve as the investor-operator of five Major League Soccer franchises. If MLS contracts to 10 teams this off-season from 12, the Colorado magnate's Anschutz Entertainment Group would run half the league's teams.

"As he decides to spend or not spend money, it decides the viability of the league," said David Carter, principal of the Sports Business Group, a consulting firm in Los Angeles.

Anschutz's control could cause concern that the playing field is tilted, said David Moross, chairman and CEO of Sports Capital Partners, a private equity fund in New York.

"If the games become less competitive or fans feel an ownership group is controlling the outcome, people won't watch anymore, and Anschutz will have lost a fortune," Moross said.

When MLS started in April 1996, Anschutz served as the investor-operator of one team, the Colorado Rapids, for which he had plunked down $5 million. Since then, he's spent more than $70 million to pick up four other teams, including the New York/New Jersey MetroStars for a reported $25 million just before Thanksgiving. Three of his franchises (the MetroStars, Chicago Fire and Los Angeles Galaxy) are in the country's biggest markets. His other team, D.C. United, is in the nation's capital. In each year save one, an Anschutz-operated team has played in the MLS Cup game.

Since Lamar Hunt runs two teams (the Kansas City Wizards and Columbus Crew), the duo of Hunt and Anschutz in effect controls any majority vote on MLS matters.

Hunt said critics complained when his group started operating the two teams in 1996, but he emphasized that there's never been a problem. He sees Anschutz's extensive interest as a benefit.

"Thank goodness for Phil Anschutz that someone likes this sport and sees a great future for it," Hunt said.

Randy Vataha, a partner in Game Plan LLC, which brokers the sale of sports teams, said the number of teams Anschutz runs isn't the chief concern.

"The bigger concern is that the league do well and survive," he said. "The thing that kills leagues is instability."

Considering MLS hasn't recruited any new investors since 1997, and considering it already operates two contraction candidates (the Tampa Bay Mutiny and Dallas Burn) through the league, could the day arrive when Anschutz runs every MLS team?

"It's conceivable that one investor could own all 12 teams, though we find that highly unlikely," MLS Commissioner Don Garber said.

With the league's single-entity concept, the incentive for investors such as Anschutz is to see that all teams do well financially, since investors' stake is in the league rather than in any individual team.

Garber conceded that the league would be in serious trouble if Anschutz, by all accounts a soccer fanatic, withdrew his support. But he sees no problem when Anschutz expands his soccer holdings.

"I don't believe in any way that having a group like AEG having a greater interest in soccer could be anything but very, very good," Garber said. "This is a company with great soccer vision."

Anschutz also has a stake in the Los Angeles Kings and Los Angeles Lakers, among other sports holdings.