Anschutz Entertainment Group chief executive Tim Leiweke's departure from the sports and entertainment giant has created a major setback to the company's plans to lure an NFL franchise to Farmers Field, the proposed $1.8 billion downtown stadium project, sports business analysts and Los Angeles government officials said.
In announcing its decision to take AEG off the market Thursday, the Denver-based Anschutz Company emphasized its commitment to the Farmers Field project and returning the NFL to the Los Angeles-Orange County market.
"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," Dan Beckerman, who becomes AEG's new president and CEO, said in a statement.
But the resignation of Leiweke, the driving force behind AEG's NFL quest who deftly guided the Farmers Field project to approval by the Los Angeles City Council is a significant, if not insurmountable, setback to the NFL's return to the nation's second largest media market.
"It takes the NFL off the table for the foreseeable future," USC sports business professor David Carter said. "Whether that means months or years."
"We need to take a step back and talk and look at our options," said Los Angeles City councilwoman Jan Perry, one of the leading proponents of the Farmers Field project.
Colorado billionaire Philip F. Anschutz's decision to take AEG off the market blindsided Los Angeles government and NFL officials Thursday just as Anschutz's decision to put the company up for sale had in September, only days before a final Los Angeles City Council vote on the Farmers Field project. But adding a greater degree of uncertainty about the stadium project within City Hall was Leiweke's resignation after a growing divide between the executive and Anschutz finally became irreparable.
The Anschutz Company terminated the sale of AEG after a second round of bids for the company failed produce terms acceptable to Anschutz. Anschutz officials had expected AEG to attract bids between $8 billion and $10 billion.
Los Angeles billionaire Dr. Patrick Soon-Shiong, Guggenheim Partners LLC and Colony Capital LLC have made second bids for AEG. Guggenheim put together the group that purchased the Dodgers last year for a record $2.1 billion.
"As far as the city, we need to decide what our options are," Perry said. "We were rather taken aback when Mr. Anschutz decided to put the company up for sale and now we go back the other way. We need to see what our level of certainty is going forward."
The Leiweke departure also creates uncertainty with the NFL officials and league owners who had already expressed concerns about the economic feasibility of AEG building Farmers Field, Anschutz acquiring a significant share of an NFL franchise and the cost of relocating that team. NFL officials have consistently expressed those concerns to AEG and Los Angeles officials, including during a meeting Perry had with NFL officials in New York. Leiweke had been AEG's point man not only with NFL commissioner Roger Goodell but owners of league franchises potentially looking to relocate. Leiweke has told the Register that he had discussions with five NFL teams: San Diego, St. Louis, Minnesota, Jacksonville and Oakland.
"The longer it takes to make a deal, quite often there's the likelihood that the deal will not move forward," Perry said.
Even some of the Farmers Field project's sharpest critics acknowledged that Leiweke's salesmanship made it difficult to totally discount the AEG's plans. A former NFL executive and a sports consultant involved in previous relocation of NFL franchises both described Leiweke as AEG's greatest asset.
But Leiweke's tireless advocacy for Farmers Field and the NFL's return led to a split between Leiweke and Anschutz, who didn't always share his executive's enthusiasm for the project. At one point in December 2011, Los Angeles mayor Antonio Villaraigosa felt the need to fly to Denver to meet with Anschutz, Goodell and New England owner Robert Kraft to gauge Anschutz's interest in acquiring an NFL team and the Farmers Field plans.
"I think Tim has always been an incredibly successful salesman, cheerleader," Carter said. "But you have to wonder if he was getting too far out in front of Mr. Anschutz and what he had penciled out to what he wanted or needed (the NFL and stadium deals) to be."