Tim Leiweke Talks Potential AEG Sale
Calls Farmers Field and L.A. Convention Center rebuild “the best deal ever made”
- by Dave Brooks
- Published: September 20, 2012
Above: Rendering of Farmers Field, Los Angeles; Left: Tim Leiweke
AEG owner Phil Anschutz and CEO Tim Leiweke were thrust into the news Monday amid reports that the billionaire owner had decided to sell the sports and entertainment empire the pair have spent the last two decades building.
With its 100-plus venue management contracts and concert promotion firms AEG Live/Goldenvoice/Concerts West, ownership of music festivals like Coachella and stake in a half-dozen professional sports teams, the purchase of AEG would easily make any investor an overnight mega mogul. But what does that change in ownership mean for projects like Farmers Field, Leiweke’s ambitious plan to bring a football team to downtown Los Angeles?
Leiweke insists the deal changes nothing and said his company and management team are committed to the long-term viability of the project. Venues Today caught up with Leiweke to dissect the sale announcement and determine how it affects the Farmers Field project.
Let’s first talk about timing — why was the announcement made now and what does that mean for your own regulatory timeline before the L.A. City Council?
I’ve seen the controversy over the last two days, but let’s be honest — if we were trying to pull a quick one or do a bait and switch, why wouldn’t we have just waited two weeks (after the council has approved the environmental impact report). Farmers Field was never about the Anschutz Corporation — Farmers Field was always about AEG. It’s AEG that will own Farmers Field; it’s AEG that owns Staples Center, the JW Marriot and the rest of L.A. Live. We’re the same management team that has done four of these entitlement processes with the city of L.A. and we’re the same management team to cut the ribbon on Farmers Field when it opens. Much has been made about the timing, but it's much ado about nothing.
You’ve said there’s a long-term intent to keep the entire company together and the management team in place. What kind of requirements are you going to look for from the buyer to ensure that happens?
I believe that Mr. Anschutz, to his credit, has made it very clear that it’s not just the highest bid, but it has to be the highest and best owner. We’re going to be very aggressive to make sure that the vision we have for AEG is a vision shared by the new owners and we’re going to make sure the new owners are equally passionate about getting Farmers Field built. If that’s not part of their commitment, then Mr. Anschutz will have other people to choose from.
Besides yourself, who on the management team has made a long-term commitment to stay on with AEG after the company is sold?
The key management team has been here for 15-plus years. That’s Dan Beckerman (CFO), Ted Fikre (Chief Legal and Development Officer), Randy Phillips (President and CEO of AEG Live) and Bob Newman (CEO of AEG Facilities). We have had zero change here and we will have zero change (after the company is sold).
What type of time commitment did you make on your last contract?
I’m going to be here until people don’t want me anymore. I guarantee you, I’ll be here to cut the ribbon at Farmers Field in 2017.
How is Mr. Anschutz doing and how does this fit with his vision for his legacy?
Phil and I talk every day. Phil and I talked about a sale 20 years ago and he made it very clear when he got into this, it was an investment and there would be a point in time when he would want a return on his investment. This was always expected, it was always coming and I think as we look at the other priorities in his life, I always understood that I was the one who caused the most stress in his life, and I do not blame him for feeling like now is a good time to get out. I credit him with doing it in a way that allows us to get the (National Football League) deal done. Phil and I have never had a difference of opinion on vision, execution or timing.
How does this announcement affect your discussions with the National Football League?
If we have identified a buyer by the end of the year, then we’re in a situation to begin to integrate them into the NFL with the owners, the potential teams that would move to Los Angeles and the Commissioner’s office. All of this will take place before the next NFL meeting in March when they address L.A. We want to go into that meeting and tell them that we’re ready to push dirt, we’ve got the design drawings and we’re ready to begin on the construction of the convention center that allows us to replace the old facility and begin Farmers Field, and we have an owner who’s been fully vetted and we’ve had discussions with teams that want to move to L.A. That doesn’t mean a team will move to L.A. next year, but I do believe they will address L.A. at that March meeting.
Does purchasing AEG provide a clearer path for a billionaire to become an NFL owner, as opposed to shopping the market and buying a team?
I’ve always believed that a team moving to L.A. would always be (NFL Commissioner) Roger Goodell’s direction and lead. We’ve always followed his lead. There’s no way to move a team here unless Farmers Field is a reality. And there’s no way to move a team to L.A. without an owner who is willing to write a check for the right amount.
Does AEG need an equity position in an NFL team to make this deal work?
AEG as a corporation cannot own a team, so the new owner will have to be prepared to own a piece of a football team, and that piece is to be determined.
The L.A. Times had an editorial today that asked, “Why should the city approve an enormous and controversial project even if it doesn't know who will ultimately be in charge of the company undertaking it?”
Here’s my answer to that, because this one has my hair up: this is the same management team that negotiated that last three entitlement projects with the city of Los Angeles — nothing changed there. This is a project that is the best deal made in the history of the NFL for a city. This is a project that is the best deal ever made with a convention center from a private enterprise which, by the way, still has to go bid to run the convention center. These are singularly the two best deals ever made involving zero tax dolllars and zero risk to the General Fund. What are we debating here? The wherewithal of our company has been proved over 20 years, we have the same management team and we’re committed to get this project done. This changes nothing for the city — they get the right to not only approve a financing plan at a later date, but they also get a second right to approve the lease. We’re the same people who have honored every agreement we’ve ever made with the City of L.A. We‘re the same people who have given back $80 million to the community through our foundations. Nothing has changed.
What about the symbolic good will that Mr. Anschutz brings to the table? With a new owner, there’s a sense of unknown and it seems natural for the city to wonder if the next owner will have the same commitment.
Phil Anschutz has never sat down at the table, in the history of this company, for any of the four projects in L.A. It’s always our management team. This has never been a deal negotiated by Phil Anschutz or the Anschutz Company. This has been a deal negotiated by the president of the Anschutz Entertainment Group, and I’m still here.
Looking at the massive holders of AEG and thinking about a potential buyer, I wonder if this is the type of company that another company buys and tries to integrate into their business, or is this a company that a billionaire or private equity firm buys and runs as AEG?
I’ll tell you in three months. I’m very unconcerned about who is going to own this company in the future — we have plenty of choices, that is for sure. What I can tell you is that our best days are still ahead of us.
Contact: (213) 742-7155
- by Dave Brooks
- Published: September 20, 2012