The AEG shocker: What happened
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.
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.
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.
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.”