AEG on the market with multi-billion dollar price tag

Anschutz Entertainment Group (AEG), which owns the Los Angeles Kings, the Los Angeles Galaxy and owns and operates hundreds of sports and entertainment facilities across the world including London’s O2 Arena and the Staples Center in Los Angeles, has been put up for sale.

The surprising development came in an announcement by its parent Anschutz Co., helmed by Philip Anschutz, on Tuesday evening. A statement said the Anschutz Co. “will undertake the sale to the qualified party best able to reflect the full value of AEG and fully committed to working with AEG’s management team as it pursues its long-term business objectives.”

Anschutz’s president Cannon Y. Harvey added: “This is an appropriate time to transition AEG to a new qualified owner. The Anschutz Company has the highest confidence in AEG’s potential and its management, and will only undertake a transaction that reflects this confidence.”

The sale of AEG would likely be amongst the largest transactions in the history of the sports industry and would also have a significant impact on the current and future sports landscape in Los Angeles. AEG currently runs the Staples Center, the Stanley Cup winning LA Kings NHL franchise, David Beckham’s LA Galaxy and holds a minority share in the LA Lakers NBA team.

It is also working on a project to return the National Football League (NFL) to the city through the development of a new NFL-spec stadium, Farmers Field, adjacent to the Staples Center.

Outside Los Angeles, however, AEG’s tentacles spread far and wide. It operates major venue in Europe, notably the O2 Arena, which it helped resurrect and become one of the world’s leading entertainment venues, and Berlin’s O2 World. It also has a major infrastructural partnership in place with the NBA developing facilities in China and a multitude of other international assets.

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Tim Lieweke, AEF’s chief executive, said in a statement announcing AEG was on the market: “Our properties form a virtuous circle of AEG’s leading content, distribution, retail and service businesses, which constantly reinforces the value proposition of our platform and uniquely positions us to execute new, world-class projects that no other company can imagine or attempt.”

It remains unclear whether AEG will be sold as a whole or could be sold in parts – it also has a significant events and promotions division – but, taken as a whole, any sale price would likely run into several billions – early speculation suggested as much as US$7 billion.

There was an early indication of interest from billionaire Los Angeles businessman Patrick Soon-Shiong. In a statement, a Soon-Shiong representative said: "Dr. Patrick Soon-Shiong is keenly aware that AEG is in play,” adding of the proposed redevelopment of downtown LA that “we are clearly interested in furthering this legacy for Los Angeles”.

The Los Angeles Times also suggested that Madison Square Garden Co. might be another potential buyer.

Anschutz Co. has hired New York’s Blackstone Group to advise on the sales process. 

Philip F. Anschutz with the Los Angeles Kings following the AEG-owned team's 2011 Stanley Cup win.