http://www2.macleans.ca/2012/06/12/the- ... -anschutz/
The real king of the Los Angeles Kings: mystery billionaire Philip Anschutz
With his vast financial empire, the reclusive tycoon is the master of the Kings’ domain—and a whole lot more
by Alan Parker on Tuesday, June 12, 2012
Kevork Djansezian/AP Photo
When the Los Angeles Kings hoisted the Stanley Cup over their heads last night at the Staples Center, the biggest winner wasn’t wearing skates, or even among the suits behind the bench. Kings players had to drag him onto the ice and thrust the Stanley Cup into his hands.
His name is Philip Frederick Anschutz, and he’s a publicity-shy 72-year-old tycoon who is far more likely to jog to work (he used to run marathons) or buy a cruise line than tie on a pair of skates or seek the spotlight.
Anschutz, through his private Anschutz Entertainment Group, owns the L.A. Kings. More importantly, he owns the Staples Center, home of the NHL’s Kings and the NBA’s Lakers and Clippers and the WNBA’s Sparks.
The Staples Center is one of the most profitable showplaces in the world, hosting more than 250 events every year—from WrestleMania to trade shows to Michael Jackson’s memorial service as well as every professional hockey and basketball game and most major concerts in the city. And (again, more importantly) the Staples Center is the cornerstone of a 37-hectare sports, entertainment, convention, hotel and residential complex called L.A. Live that is unrivalled in the world—and about to become even more grandiose.
Phil Anschutz’s L.A. Live neighbourhood is soon to become home to a $1-billion NFL stadium called Farmers Field (for which Farmers Insurance is paying $700 million over 30 years in naming rights)—just as soon as Anschutz acquires a pro football team.
And he will. Because Phil Anschutz rarely fails. He came dangerously close to complete financial meltdown a few times during the past half century. But in the end Phil Anschutz wins. That’s why, when LA Kings hoisted the Cup at last, he was the biggest winner when his team—one of his many teams—celebrated winning its first NHL championship down on the ice.
The really scary thing is that ownership of the L.A. Kings and the Staples Center and the L.A. Live district is just a small part—a key part but a small part—of the Anschutz business empire that stretches around the world and touches most North Americans’ lives on a regular (if not daily) basis.
Phil Anschutz owns the Anschutz Company which, through a variety of subsidiaries, owns oil fields, mines, railways, hotels and resorts, cruise lines, arenas and stadiums, TV stations and newspapers, more professional sports teams than any other single entity in the world, and the largest chain of movie theatres in the world.
Subsidiaries of Anschutz Entertainment Group produced the Chronicles of Narnia movie series and Ray, the Ray Charles bio-pic (not to mention the Matthew McConaughey underachiever Sahara).
And that’s not even mentioning AEG Live, the performance arm of Anschutz Entertainment Group, which is the second largest (but more profitable) live-performance promoter in the world after Live Nation.
If you’ve recently seen or bought tickets for an upcoming live performance by Justin Bieber, Taylor Swift, Bon Jovi, the Black Eyed Peas, Leonard Cohen, Carrie Underwood, Usher, John Mellencamp, Kenny Chesney, Pink, George Strait, Paul McCartney or dozens of other top touring acts, you’ve put money in Phil Anschutz’s pocket.
Same goes for any one of a dozen summer music festivals produced by AEG from the famed Coachella Valley festival in California to Rockness in Scotland to Edgefest in Toronto.
And the Tutankhamun and the Golden Age of the Pharaohs touring museum exhibition. And the Grammy Museum in Los Angeles.
And the Grand Canyon Railway. And luxury lodges in U.S. National Parks from Yellowstone to Death Valley to Mount Rushmore.
And the list goes on and on. All controlled (either owned or operated) by Philip Frederick Anschutz, without the worry or bother of interfering shareholders or (usually) majority partners.
And if you put gas in your car, you’re probably putting money in Phil Anschutz’s pocket too.
In March, Forbes magazine estimated Anschutz’s wealth (conservatively) at $7 billion, ranking him 47th on Forbes’ annual list of the richest people in the U.S. In terms of real economic clout, Anschutz ranks far higher than 47th because most of his activities are private ventures, unencumbered by the shareholders attached to a publicly traded corporation.
Back in 2000, Forbes estimated Anschutz’s worth in the $18 billion range. A year earlier, CNN had surmised that Anschutz was the largest single private landowner in the United States. It’s uncertain if that remains the case, but Anschutz still owns enormous swathes of the U.S., much of it oil and gas fields and ranchland.
That fortune was cut in half by the collapse of the telecom bubble (and Anschutz’s Qwest telecom giant) shortly after the 2000 Forbes article, but he regrouped and turned his attention — and financial firepower — to the world of sports and entertainment.
The Anschutz empire is constantly shape-shifting, expanding in one direction while contracting (and reaping the sell-off benefits) in another. In 2010, for example, Anschutz received $3 billion from the sale of just some of his oil and gas holdings in North Dakota and Pennsylvania. About the same time, he was expanding his stable of arenas into China and working hard on the NFL stadium project in L.A.
The oil business is what made Anschutz a billionaire.
Anschutz was born in Kansas in 1939, the grandson of a German-speaking immigrant from Russia and the son of an oil wildcatter. Anschutz was born into the rough and tumble business of petroleum exploration but he was not born into wealth.
At age 21, just as he was about to enter law school, he was forced to drop out of university to take over the family business which was close to bankruptcy because of his father’s alcoholism and health problems.
Within four years, the younger Anschutz had turned the failing family business around, sold it for a substantial profit and started his own oil exploration company.
He made his first big strike as a wildcatter in 1968 but, almost immediately, disaster struck.
That oil well blew out, causing a raging, uncontrolled fire. Anschutz tried to hire famed oil-field firefighter Red Adair to douse it, but Adair would only work for upfront cash — of which the overstretched Anschutz, still in his 20s, had none.
But Anschutz did know that Universal Pictures was in production on a John Wayne movie calledHellfighters, based on Red Adair’s exploits. He negotiated a $100,000 fee for Universal to film the real raging fire on his property—and used the $100,000 to hire Adair to put out the fire (which Universal also filmed), get his oil field back in business, and buy new drilling rights.
Anschutz’s oil business grew aggressively in the 1970s and he began acquiring large parcels of land, some of which he consolidated into the 9-million-acre (3.6-million-hectare) Anschutz Ranch on the Utah-Wyoming border. A major oil discovery in the area in 1978— the largest in the U.S. since Alaska’s Prudhoe Bay discovery in 1969 — meant that Anschutz was able to sell a 50 per cent interest in the oil and mineral rights on his ranch to Mobil Corporation for $500 million in 1982.
By this time, Anschutz had moved his base of operations to Denver. Leveraging the $500 million from Mobil, Anschutz quickly became the first billionaire in Colorado history.
During the 1970s Anschutz had been active in oil, gas and mineral ventures in Canada through Anschutz (Canada) Exploration Ltd. and Anschutz (Canada) Mining Ltd. But the introduction of Pierre Trudeau’s National Energy Program in 1980 prompted Anschutz to abandon further direct Canadian ventures.
He returned to the Canadian oil business in the 1990s, but only as an investor through the Canadian arm of Forest Oil Corp., in which Anschutz is a principal shareholder. Last year Canadian Forest Oil Ltd. was spun off as a stand-alone public company called Lone Pine Resources Inc. Anschutz acquired a large amount of stock in the new company as a result, but it is unknown how much of that stock he has retained.
Through the 1980s, Anschutz began buying up failing U.S. railroad companies, turning them around and selling some of the massive real estate holdings attached to them. Spinning off a subsidiary of one of those railways, Southern Pacific, Anschutz entered the telecom business in 1991, creating the long-distance fibre-optic cable company Qwest just as Internet use was exploding and causing a surge in demand for new capacity.
That explosion pushed his fortune to new heights before the company collapsed a decade later when the telecom bubble burst and some Qwest executives were sent to jail for stock market manipulation. Anschutz was not dragged into the criminal proceedings but did lose more than half his amassed wealth in the debacle.
And once again he changed directions, now moving into sports and entertainment. In the mid-1990s, Anschutz teamed up with L.A. real estate developer Ed Roski Jr. (since pushed far into the background) to buy the NHL’s Los Angeles Kings. About the same time, Anschutz became a major investor and founder of Major League Soccer, owning three teams outright—including the Los Angeles Galaxy—and holding minority stakes in several others.
In 1997, Anschutz and Roski began developing the state-of-the-art sports complex which would become the Staples Center and the following year bought a 25% stake in the L.A. Lakers, one of the elite teams in the NBA. When the Staples Center opened in 1999, the NBA
Clippers joined the Lakers and Kings as tenants there.
While that combination creates enormous synergies — and profit — for the owners, it can also cause enormous problems.
Last month, with the Kings, Lakers and Clippers all in their respective league playoffs, the Staples Center hosted six playoff games in four days, a perfect storm that will probably never happen again—anywhere.
On Thursday, May 17, the Kings played Game 3 of their Western Conference final against the Phoenix Coyotes. After the ice was covered over, the Lakers NBA playoff game was held Friday evening, followed by Lakers and Clippers playoff games Saturday. Since the Lakers and Clippers use completely different wooden floors, those floors had to be changed between games. Then the boards were lifted and the Kings took to the ice Sunday afternoon for Game 4 against the Coyotes. And then the boards were relaid for the Clippers NBA playoff game Sunday night.
But filling the schedule is what arena and stadium ownership is all about. As Anschutz Entertainment Group built more arenas around the world—the company now owns and/or operates 41 arenas and about 60 other venues—AEG Live was formed to promote and produce (and profit from) entertainment content to fill those cavernous spaces.
When Justin Bieber begins the North American leg of his Believe world tour in September, he will be doing so as an employee of AEG Live. Anschutz has already guaranteed Bieber $80 million for 125 tour shows—many of them played in AEG facilities—with more money to come as merchandizing deals develop and more dates are added to the tour.
When Celine Dion wanted to settle in Las Vegas for an extended period of time to raise a family, Philip Anschutz built the Colosseum at Caesars Palace for her and paid her $150 million for a five-year residency. Starting in 2003, Dion’s “A New Day” show sold out 723 consecutive times before closing.
Since then, AEG Live has contracted Cher, Elton John and Rod Stewart to play extended gigs at the Colosseum. Starting in December, Shania Twain will fill the Colosseum for a two-year residency.
And then there’s the Regal Entertainment Group, a separate Anschutz holding, the largest movie theatre chain the world with close to 7,000 screens in multiplexes primarily located in the U.S.
So when the Kings were crowned Stanley Cup champions, Phil Anschutz duly smiled and applauded. He was barely seen on camera. He certainly did not hog the spotlight.
But everyone throughout the Kings organization and Anschutz’s entire empire knows who the real King is: Philip Anschutz