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Bang! Los Angeles Hits the AEG Iceberg - Los Angeles Downtown News - For Everything Downtown L.A.!: News

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COLUMN: THE REGARDIE REPORT Bang! Los Angeles Hits the AEG Iceberg

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Posted: Monday, October 1, 2012 6:00 am | Updated: 1:55 pm, Tue Oct 2, 2012.

DOWNTOWN LOS ANGELES - The revelation that Anschutz Entertainment Group was being put up for sale so close to the City Council’s most important vote on Farmers Field can only be explained in three ways: 1) It was exactly like company President and CEO Tim Leiweke said, that Phil Anschutz just recently made the final decision to sell, and the timing was unfortunate but necessary; 2) a lot is going on below the surface, and the public is only getting a tiny bit of the information; or 3) Leiweke and other company brass decided to pull the mother of all jokes on Los Angeles, and sought to come up with the most preposterous proclamation possible, just to see if they could pull it off.

I have a hard time grasping the first concept, that this was intentional. Over the past 16 or so years, since they began working on Staples Center, Leiweke et al. have meticulously planned every step in their reinvention of the southern end of Downtown. AEG is the epitome of a well-oiled machine, and secured labor, business and community backing long before L.A. Live and, later, the Convention Center hotel began construction. The company’s press events and groundbreakings earn maximum exposure even when there is little real news. The fact that AEG is so adept at this kind of thing makes the surprise “announcement” of the sale feel like a mistake.

I’ll get to concept two, the below-the-surface idea, in a moment, but for now, I can’t resist the third approach.

I realize it’s about as unlikely as a sitting mayor dating two brunette TV news readers consecutively, but what if Leiweke and his team were sipping Dom Perignon in a Ritz-Carlton condo one evening and decided to come up with seemingly impossible things they could announce and still get the City Council to approve their project. Maybe one VP proffered saying that, oops, Staples Center was actually built with balsa wood, but AEG still wants the Council to back Farmers Field. Maybe someone upped the ante by proposing saying that raw sewage from the Convention Center hotel had been pumped since opening day into the Los Angeles River but, their bad, they’ll fix it and can you please green light Farmers Field?

Maybe that’s when Leiweke trumped them by saying, “What if we tell them that we’re selling the company? This would force the Council to approve a $1.4 billion project not with us, not with a specific new owner, but someone who at the time of the vote is completely unknown. There’s no way they’d go for it. This simply can’t happen, right?”

Right?

Aspects of the Empire

Things probably didn’t happen that way. Still, what verges on a bait-and-switch has engendered suspicion and discontent across the city. Indeed, what the past two weeks have taught me is that AEG is like an iceberg.

This isn’t intended to be a symbol, like the golden bowl in the 2001 film The Golden Bowl (I think I just lost 30 columnist points for referencing a Merchant Ivory movie). I’m not saying that AEG is akin to the destructive iceberg that sunk the Titanic.

Rather, the shock of a sale announcement so close to the council’s vote on approving the project’s environmental documents and development agreements proved that most people in Los Angeles, including the political elite, have no idea what is really happening inside the powerful company.

An iceberg is huge at first glance, but about 90% of the massive martini chiller lies below the water line. It’s probably the same thing with AEG. The company is enormous on the surface, but the public stances, operations and announcements only hint at what is really occurring.

Some of the initial reaction to the sale announcement was incredibly myopic. Local officials and observers have been quick to state that the transaction is being spurred by the effort to return football to Los Angeles, that the NFL and Phil Anschutz have been unable to come to terms (even though Anschutz’s business dealings with NFL owners were, in the past, touted as a plus). Having a new owner, the party line goes, will smooth the relationship.

However, the sale could have nothing to do with L.A. AEG is a complex, international conglomerate. The company has 25,000 worldwide employees and its fingers are in a gajillion pies, from stadiums here and abroad to ownership of sports teams to a lucrative concert and events business. Maybe the sale is being sparked by football, but it could also come from some other aspect of the empire. Maybe Anschutz, who hasn’t done a media interview in about a quarter century, is tired of the NFL. Maybe he thinks this is the time to cash in. Maybe he has health concerns. Maybe he wants to sell his businesses so he can build a rocket ship and live on Mars with three clones of Megan Fox.

The point is, I don’t know and neither do you. And, apparently, neither does anyone in the city family.

Los Angeles just hit the AEG iceberg, and we’re only beginning to fathom what happened, and what lies below the surface.

Still, City Support

AEG is viewed skeptically by some, but no company has done more to advance the evolution of Downtown. Its $3 billion-plus investment in the Central City has catalyzed development in South Park and spurred the creation of housing, restaurants, bars and businesses in other parts of the community.

Those accomplishments certainly earned the company some leeway in the current kerfuffle. Mayor Antonio Villaraigosa seemed to fall all over himself to support the deal, even though Leiweke last week told reporters that AnVil didn’t get confirmation that the company was on the market until the night before the Wall Street Journal broke the story.

While Ninth District Councilwoman Jan Perry, who has worked with Leiweke for about a dozen years, conceded that she was “a lot disappointed” with the late notice, it didn’t dampen her support for the football stadium and reinvention of the Convention Center. On Sept. 24, the council’s Ad Hoc Stadium Committee, which she chairs, voted to approve the environmental documents for the project. The full panel was expected to do the same on Friday (after Los Angeles Downtown News went to press), clearing the way for AEG to woo NFL owners next March.

The support is all the more curious considering that others were kept in the loop. After the stadium committee vote, Leiweke confirmed to reporters that National Football League brass know exactly what was transpiring. Apparently at some point, someone told local billionaire Patrick Soon-Shiong — he is reportedly readying a bid, as are others.

The only thing all this really tells us is, well, nothing. Leiweke said that dozens of people have already approached the company to express interest. While the world’s list of billionaires is short, there’s no guarantee Los Angeles will be familiar with the buyer. After all, relatively few people knew the name Mark Walter before he teamed up with Magic Johnson and others to buy the Dodgers.

Then there’s Leiweke himself. It seems unlikely that a new owner would fire him after everything he has done on the project, but things can go haywire quickly in business. Coke stumbled decades ago with New Coke. Mortgage giant Countrywide imploded. Facebook blew its sure-thing IPO. Anything can happen.

Maybe everything from here on out will be smooth and easy. Maybe not. There’s one thing we can be sure of though: Whatever happens, it’s being planned right now, far out of view of the public.

Contact Jon Regardie at regardie@downtownnews.com.

©Los Angeles Downtown News.

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3 comments:

  • loop kelly posted at 3:24 am on Sat, Mar 7, 2015.

    loop kelly Posts: 17

    In correlation to this topic, some companies or public institutions, like schools, kindergarten or hospitals can demand their employees to not smoke at work. There are some people who replaced the normal cigarettes with a vapor cigarette, bought from http://www.vaporpalace.com/ and they feel much better since they made this change.

     
  • B C Life posted at 11:13 am on Tue, Oct 2, 2012.

    bclfc10 Posts: 1

    I completely agree! Do they consider this reportage/journalism? Is this writer really surprised that a multi-national corporation doesn't disclose it's every move to the public? Really? I don't think this person even begins to understand how the financial, public and political realms work. Maybe some time to mature and lose the blossom of naivety should be considered before this person is ALLOWED to write again. Lastly, it's completely disingenious and utterly disappointing of a so-called objective publication to place this piece of speculative nonsense under the "News" category - shame on you, LADTN.

     
  • usc azn posted at 1:23 pm on Mon, Oct 1, 2012.

    uscazn Posts: 1

    crappy writing about absolutely nothing. Nothing newsworthy, speculation with no factual research, and just more sarcasm and attempt at dry wit and jokes in a writing style that makes me cringe.
    " fingers are in a gajillion pies", tying in Facebook IPO or commenting on business strategy of AEG? What does this journalist know about doing business at all to even comment on AEG's motivations or business reasons? You would hope that Downtown News has ability to write proper editorials and opinion pages after a over a decade in the business