The wording of AEG’s release about the restructuring is bitter cold: The company “has ended its relationship with Randy Phillips, the CEO of AEG Live, and is restructuring the management of that live entertainment subsidiary” it said. There’s no word of thanks — or anything about what happened, or will happen, with Phillips, who joined AEG Live in 2002 and last year signed a five-year contract. The announcement says that Jay Marciano, who was COO, is now chairman and will oversee a team in LA of Paul Tollett, John Meglen, Shawn Trell and Rick Mueller. “I look forward to my greater involvement with the enormously talented AEG Live Team in continuing to invest and grow one of AEG’s most important divisions,” Marciano says. Billboard’s industry specialist Ray Waddell reports that AEG is the world’s No. 2 concert promoter, behind Live Nation, and has grossed $1.1B in ticket sales so far this year with tours including Bon Jovi, the Rolling Stones, Justin Bieber, Carrie Underwood, Taylor Swift and Kenny Chesney.
So much for Anschutz’s dream to make a $10B or so deal that could revamp the live entertainment business. The Anschutz Company just pulled the plug on the auction process that began in September to sell its sprawling sports and entertainment unit Anschutz Entertainment Group that has its hands in more than 100 global arenas and stadiums, numerous sports teams worldwide and is No. 2 in the world behind Live Nation in live concert promotions. Philip Anschutz “will resume a more active role” especially with its “world-wide strategy and operations,” the company says. And Tim Leiweke is leaving as CEO, the job he has held since 1996, to be replaced by Dan Beckerman, who was COO and CFO. The new chief says that “Priority projects going forward include the development of Farmers Field adjacent to our L.A. Live campus and the pursuit of our plan to bring the NFL back to Los Angeles, our recently announced initiative to collaborate with MGM to build a new arena in Las Vegas, the acquisition of ownership stakes and the associated refurbishment of several major global arenas in Europe and our ongoing investment in AXS.com, our ticketing and e-commerce platform, as we expand its capabilities for the benefit of our venues, partners, performers and consumer end-users.”
Anschutz says that “from the very beginning of the sales process” he had made it clear that “unless the right buyer came forward with a transaction on acceptable terms we would not sell the Company.” Signs that the sale was in jeopardy arose recently with reports indicating that the top bid from Tom Barrack’s Colony Capital in partnership with Qatar’s sovereign wealth fund was below Anschutz’ $8B asking price. Guggenheim Partners had dropped out, and Bloomberg reported that Los Angeles billionaire Patrick Soon-Shiong was unlikely to come near the amount Anschutz wanted. Negotiations were said to be on hold while Anschutz recovers from back surgery. In January, Leiweke told Billboard that the auction process had dragged out because “more people were interested than we ever imagined.” He added, though, that “We’re getting down to the final straws here.” All that was left was to “get Mr. Anschutz and [potential buyers] together on the right deal.”
Here’s the release:
It’s the beginning of the beginning of the auction process for billionaire Philip Anschutz’ live entertainment business. The company is circulating a 25-page information memorandum that describes the operations being offered but without financial data, Reuters reports. Those who sign non-disclosure agreements should be able to see more details, including confidential numbers, by the end of the month. Anschutz is thinking big: bidders will have to offer about $10B or more just to make it to a second round, the wire service says citing unnamed sources.
No matter what the consumer will still get screwed. Anschutz Entertainment Group will roll out its much-hyped challenge to chief rival Live Nation Entertainment’s Ticketmaster this Saturday. So the battle is on. AEG has partnered with start-up Outbox Technology to form AXS with a plan to sell tickets through more than 100 arenas and theaters by the end of 2012. AEG — which owns L.A.’s Staples Center and London’s 02 Arena — was Ticketmaster’s biggest client, so not only will the loss hurt Ticketmaster’s bottom line but the new entity could challenge Ticketmaster’s dominance in this cutthroat biz. Turns out that a primary architect of AEG’s Outbox strategy is none other than Fred Rosen, who was Ticketmaster’s CEO in the 1980s and masterminded the company’s rise by creating a centralized ticket sales system used by the venues. The revenues came from service fees which, as anyone who’s bought a ticket to a live event in the past 20 years knows, have spiraled higher and higher. The AEG plan instead has the venues selling the tickets themselves via Outbox software that can be customized. AEG’s expansion into the ticket-sales business was seen as inevitable after the U.S. Justice Department approved the Ticketmaster-Live Nation merger in 2010. But as a condition for that merger, the feds insisted that AEG have the opportunity to license Ticketmaster’s software. AEG ultimately chose …
The TV networks with NFL rights have been salivating at the thought of putting a pro football team back in the ultra-lucrative Los Angeles market. Today, the Los Angeles City Council has become their new best friend by voting to approve a memorandum of understanding that outlines the financial framework of a $1.2 billion stadium, Farmers Field, to be built in downtown LA to house the first NFL team here in 16 years. The deal between the city and Anschutz Entertainment Group, which would see a 68,000-seat stadium attached to a new wing of the LA Convention Center, still must pass environmental-impact hurdles, but the tentative plan is for AEG to begin construction in 2012 for an opening in September 2016. The Council vote was unanimous today, mostly thanks to amended bond agreements that reduces the amount the city would have to shell out for the convention center upgrade. Last week on ESPN Radio’s local Mason and Ireland Show, former stadium skeptic Councilman Bill Rosendahl said he was on board with the deal but that he didn’t want ground broken on a new stadium if a team hasn’t been lined up yet to play there. AEG president Tim Leiweke has previously said he’s had discussions with the Oakland Raiders, St. Louis Rams, Jacksonville Jaguars, Minnesota Vikings and the San Diego Chargers (always a top candidate to head north thanks to a shaky stadium deal of their own).