Tuesday, November 16, 2010

AEG – the real player for the NFL in Los Angeles

When Los Angeles Times writer Sam Farmer talks about the NFL returning to Los Angeles and suggests AEG, one of the leading sports and entertainment presenters in the world, are very interested in looking at an NFL franchise (and stadium) for Lotus Land it is time to take notice. Farmer knows what he is talking about and for the last few weeks has been reporting that AEG are indeed looking at the NFL and Los Angeles. Just who is AEG and Farmer’s views aside, are they indeed legitimate NFL “players”?

AEG, a wholly owned subsidiary of the Anschutz Company, owns or controls a collection of companies including facilities such as STAPLES Center (Los Angeles, CA), Prudential Center (Newark, NJ), Sprint Center (Kansas City, MO), Citizen's Business Bank Arena (Ontario, CA), The Rose Garden (Portland, OR), WaMu Theatre (Seattle, WA), American Airlines Arena (Miami), Verizon Theatre (Grand Prairie, TX), Colosseum at Caesars Palace (Las Vegas, NV), Target Center (Minneapolis, MN), NOKIA Theatre Times Square, Acer Arena (Sydney, AU), Wukesong Arena (Beijing), Ahoy Arena (Rotterdam), Globe Arenas (Stockholm), Qatar National Convention Centre (Doha), O2 Hamburg arena (Hamburg), O2 World arena (Berlin) and The O2, a 28-acre development located in the eastern part of London along the Thames River which includes a 20,000-seat arena and over 650,000 (square feel) of leisure and entertainment use. Their sports franchises include the Los Angeles Kings (NHL), Manchester Monarchs (AHL), Reading Royals (ECHL), Houston Dynamo & Los Angeles Galaxy (MLS), two hockey franchises in Europe, the Hammarby (Sweden) Futbol Club and management of privately held shares of the Los Angeles Lakers; AEG Facilities include, a stand-alone affiliate that operates or consults with more than 90 of the industries preeminent venues worldwide; AEG Merchandising, a multi-faceted merchandising company; AEG Creative, a full-service marketing and advertising agency and AEG Global Partnerships, a division responsible for worldwide sales and servicing of sponsorships naming rights and other strategic partnerships.

In addition, AEG developed and operates The Home Depot Center, a $150 million national training center located on the campus of California State University, Dominguez Hills in Carson, California which is an Official U.S. Olympic Training Site. The Home Depot Center features elite facilities for soccer, tennis, track & field, track cycling, boxing, lacrosse, rugby, football and other sports, as well as concerts and family shows, and is home to Major League Soccer's Los Angeles Galaxy and Chivas USA.

Events such as the Amgen Tour of California cycling road race, the ING Bay to Breakers foot race as well as an ongoing schedule of soccer exhibitions in the United States featuring the most popular international teams are part of the portfolio of AEG Sports.

AEG Live is one of the world's leading concert promotion and touring companies with fifteen regional offices. It is comprised of stand-alone affiliate divisions devoted to all aspects of live entertainment including: AEG Live Events, creators and producers of special events of all sizes; AEG-TV, creators of live events for television, DVD, pay-per-view, cinema and other electronic media; and AEG Live Tours & Special Events, Concerts West, Goldenvoice, The Messina Group and AEG Exhibitions, the company's national entertainment promotion and touring divisions. AEG Live is currently overseeing two international museum tours of the artifacts of King Tut: Tutankhamun and the Golden Age of the Pharaohs" and "Tutankhamun: The Golden King and the Great Pharaohs," and recently promoted concert tours have included artists such as Taylor Swift, Justin Bieber, The Black Eyed Peas, Carrie Underwood, Leonard Cohen, Kelly Clarkson, Wisin & Yandel, Bon Jovi, Celine Dion, Miley Cyrus, Britney Spears, Kenny Chesney, Paul McCartney and American Idols Live. AEG Live co-produces the New Orleans Jazz & Heritage Festival and Goldenvoice, the company's southern California-based regional promotion division created and operates the award winning annual Coachella Valley Music & Arts Festival.

AEG is overseeing the development of L.A. LIVE, a 4 million square foot / $2.5 billion downtown Los Angeles sports, residential & entertainment district featuring Nokia Theatre L.A. LIVE (7,100-seat live theatre) and Club Nokia (2,300 capacity live music venue), a 54-story, 1001-room convention "headquarters" destination (featuring The Ritz-Carlton and JW Marriott hotels and 224 luxury condominiums – The Residences at The Ritz Carlton – all in a single tower), Regal Cinemas L.A. LIVE Stadium 14 movie theatre, "broadcast" facilities for ESPN, along with entertainment, restaurant and office space. The company is also developing 12 arenas in China and arenas in Stockholm and Las Vegas.

AEG are not just players, when it comes to stadium and arena management they indeed may be the biggest kids on the block.

Farmer reported on November 4, Tim Leiweke president and CEO of AEG the entertainment and sports conglomerate is looking at building a state-of-the art NFL stadium beside the Staples Center. The Staples Center located in downtown Los Angeles is the home to the Los Angeles Kings (owned by AEG), the Los Angeles Lakers and the Los Angeles Clippers. The Staples Center is the only North American arena home to three professional sports franchises playing during the same time period (October to April, longer if the teams make the playoffs).

Leiweke has plenty of chutzpah to go along with his bosses billions. Not only did Leiweke make it clear money was not an issue for AEG but as far as he is concerned, whether or not AEG manages to secure an NFL franchise for Los Angeles he wants a Super Bowl for the proposed stadium and he wants it to be the 50th Super Bowl set to be played in 2016 (labor issues not withstanding). The first Super Bowl was played at the Los Angeles Coliseum.

"We're asking [the NFL] to look at our track record, the uniqueness of that anniversary, and the place that this city has played in hosting Super Bowls," said Leiweke, AEG's president and chief executive, at a Biltmore Hotel luncheon organized by Town Hall Los Angeles and reported by Farmer.

What makes Leiweke (who is teaming with Cassey Wasserman) even more interesting is L.A. real estate magnate Ed Roski has most of his ducks in order when it comes to the NFL and the Los Angeles market.

Roski’s plan is to build a stadium in the City of Industry (at a cost of $800 million) -- about 22 miles east of L.A. -- remains ongoing and officials of Majestic Realty Co. contend they remain prepared to have a team in the L.A. area by 2011 (that depends on if there is football in 2011) and in their new facility by 2013. NFL insiders caution that in the current economic climate and with so much uncertainty regarding the CBA -- to say nothing of lingering questions regarding both efforts to bring a team to L.A. -- that timetable might prove to be overly ambitious.

"We've met with some owners and their lawyers and representatives at their place," John Semcken, vice president of Roski's company, Majestic Realty told NFL.com, "and some of them have come to us to see our presentation, and we've met some at a neutral location. The process is certainly moving along, and we've had some significant discussions.

"As soon as we get a team we can put a shovel in the ground," he said. "The upfront financing is already in place, and we could start construction while we wait for the final financing.

"We're meeting with teams, and we continue to move forward," Semcken said. "We are ahead of every other stadium project, including San Francisco's, in terms of design. We are ready to go. All we need is a team."

Either Leiweke does not care what and were Ed Roski is, or he believes the NFL is ready to award two franchises to Los Angeles (yes) and a region without a state-of-the art NFL stadium will see two built in the next five years (no).

The Los Angeles Times reported there was an environmental exemption similar to the one granted to the Industry proposal, one that still requires an environmental-impact report but protects it from various lawsuits.

"Despite the speculation I've seen out there that we would not go through an entitlement process and we're using Sacramento to avoid that — not true," Leiweke told The Times.

"We think this thing stands on its own two feet. So we will do an entitlement. What we won't do is allow unwarranted lawsuits to delay the process or complicate the process."

Nothing is going to happen quickly in terms of firming up Los Angeles and the National Football League, it could be a year before there is any news for either of the groups looking at Los Angeles and the NFL. Roger Goodell will not look at either group seriously until the NFL and the NFL Players Association reach a new collective bargaining agreement.

"We know that there's no team and no league that's going to vote and approve a transfer for at least a year, and probably longer," Leiweke told The Times.

"Roger Goodell is aware of what we're doing. We follow the lead of Roger and the league as to what we can and cannot say, and what we can and cannot do, and what we can and cannot expect."

AEG owns the NHL’s Los Angeles Kings; they are in the business of managing facilities not owning sports franchises. The best scenario for AEG is to build the stadium, and find an NFL team to move to Los Angeles (or have Wasserman become the lead investor in an ownership group).

AEG’s plan is to build a stadium that will cost $1 billion (far less than the Giants/Jets and new Dallas Cowboys stadiums cost to build), that will seat 72,000-seat featuring a retractable dome and 218 luxury suites.

A number of teams could attempt to buy their way about of their current stadiums and cities and move to Los Angeles. The San Diego Chargers are fed up with Qualcomm Stadium. If Chargers owner Alex Spanos wanted to move, a window exists in his current stadium lease that allows him to buy his way out of San Diego between February 1 and April 30 of every year from now through 2020. If Spanos wanted to wing his way out of San Diego, all Spanos need do is write a $26 million check to the city of San Diego. The Jacksonville Jaguars and Buffalo Bills have serious issues in their respective markets and could be mobile in the not too distant future.

The Times reported Stan Kroenke (owner of the St. Louis Rams) could exchange franchises with Bowlen, taking ownership of the Broncos and allowing Bowlen to move the Rams to L.A. Kroenke is from Denver. Under this suggestion St. Louis who saw the Cardinals move to Phoenix would lose an NFL franchise for the second time.

Whether it is gall or the gospel according to Tim Leiweke, at the end of the day as far as Leiweke is concerned, AEG will not be holding a tag sale to help finance the proposed $1 billion stadium.

"When we say a billion dollars, it's not contingent on financing. Phil (Anschutz) can do it if he wants to get it done tomorrow," Leiweke said.

One might suggest Anschutz is the type of person the NFL loves in their glee club, unlimited recourses and AEG brings a great deal to the NFL dance. Ed Roski brings dogged determination; Roski has been interested in the Los Angeles for years. But… as suggested earlier, if Sam Farmer is talking Los Angeles and AEG - maybe it is time to start paying attention to AEG’s NFL in Los Angeles interests.

For SportsBusinessNews.com this is Howard Bloom. Sources cited and used in this Insider Report: The Los Angeles Times

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