Wednesday, August 17, 2011 / 4:40 PM
An effort to bring NFL football back to Los Angeles took a big step forward last week, with the L.A. City Council voting 12-0 to approve the framework of a $1.2 billion downtown stadium deal with Denver billionaire Philip Anschutz.
That step solidified the front-runner status of Anschutz and his giant sports-and-entertainment conglomerate, AEG Live. It also places the story in the category of much-too-close-for-comfort for fans of the St. Louis Rams.
Unreported in St. Louis—but painfully relevant—is this:
Anschutz not only is a good friend—but is a successful business partner—of fellow Denver billionaire Stan Kroenke, sole owner of the Rams. Just two years ago, the two moguls formed a joint venture in Colorado to run the 6,000-seat Broomfield Event Center (now the 1st Bank Center).
They’ve apparently been pretty successful, which isn’t shocking, seeing as how they’re two of the most prosperous businessmen on the planet (a fact that, tellingly, didn’t prevent them from receiving public assistance). And with Anschutz needing to lure an existing NFL franchise to L.A.—the NFL has made it clear that expansion is not on the table—why not throw in with an existing friend and partner?
Their association goes back to at least 2003, when Kroenke purchased the Colorado Rapids of Major League Soccer (MLS) from Anschutz, who at the time owned five of the other nine MLS franchises.
Anschutz has been mentioned before as a possible partner of Kroenke's in the Arsenal soccer club, and last year there was speculation that they would become friendly rivals. The London Guardian reported that “the pair have long been close, are both based in Denver and have intimate business links through shared sports-and-entertainment investment in Colorado.”
This is news to St. Louis. The Post-Dispatch is apparently unaware of any connection between the two men, having never referenced one. In June—when the story broke that Anschutz’s company had approached the Rams and four other NFL teams about moving to Los Angeles—one was left with the impression that Anschutz’s presence actually lessened the prospect of Kroenke heading for the Left Coast.
“If billionaire Philip Anschutz—the billionaire behind the L.A. project—wants a team, the Rams may be the wrong fit. He's apparently looking to purchase a team as part of moving it to L.A.,” wrote Post sports columnist Bernie Miklasz. “Why would Kroenke want to sell the Rams to Anschutz? Kroenke helped bring the Rams to St. Louis in 1995 by stepping forward to become Georgia Frontiere's ownership partner and buying 40 percent of the team.”
Why would Kroenke want to sell the Rams to Anschutz? Well, let’s see. They’re trusted old friends and partners, and together they would bring staggering economic power to an NFL franchise. Last year, Forbes ranked Anschutz as the 34th wealthiest American, with an estimated net worth of $7 billion (three spots ahead of St. Louis’ wealthiest citizen, Jack Taylor). On the same list, Kroenke and wife Ann Walton Kroenke were scraping along with her $3.2 billion (98th place) and his $2.7 billion (130th place).
Together, the two would share (in some fashion) ownership of a revived team in the nation’s second-largest media market playing in a state-of-the-art $1.2 billion stadium. They would be the toast of the NFL for returning football to Los Angeles and might even be forgiven for abandoning the stagnant city that was formerly best known in league circles for having sued the NFL.
Compare that with Kroenke having sole ownership of a team playing in an outdated dome that is hopelessly below NFL standards, in a market that has never embraced him personally, and one that is perceived nationally as old and declining at best. Just this week, American City Business Journals ranked St. Louis as the 7th “most overextended market” with regard to its ability to support its sports franchises, among 85 areas studied in the U.S. and Canada.
Kroenke, who doesn’t live here and never has, would have to be mad to leave all that behind, wouldn’t he?
Even if Kroenke’s goal is to have his very own team to himself, there’s another scenario that wouldn’t favor St. Louis. Kroenke and Anschutz might form their Los Angeles partnership for the relative short run, anticipating that one of them might someday have the opportunity to break off and acquire their hometown Denver Broncos, owned by Pat Bowlen, who is reportedly in poor health. (Kroenke’s family already owns the Denver Nuggets and Colorado Avalanche, among its many holdings in the region.)
That scenario is pure speculation, but this much isn’t: In Los Angeles (admittedly, no St. Louis), the two could hold court as part of Anschutz's amazing L.A. sports empire.
Anschutz is already an icon in Los Angeles for his key role in developing the $2.5 billion L.A. Live complex, adjacent to the famed Staples Center, which he owns, along with two of its primary tenants, the NHL's Kings and WNBA's Sparks, along with a stake in the NBA's Lakers. And so on.
Anschutz’s company, Anschutz Entertainment Group, “is the world's largest owner of sports teams and sports events, the owner of the world’s most profitable sports and entertainment venues, and under AEG Live the world's second largest presenter of live music and entertainment events,” claims its Wikipedia page.
For now, Kroenke’s St. Louis Rams continue to maintain the team's interest in staying in St. Louis and presumably is negotiating for some form of new public subsidy, either to upgrade the Edward Jones Dome sufficiently (likely an impossibility) or to provide them with an entirely new stadium (an improbability, given the region’s financial straits).
In the meantime, though, it might not be a bad idea for Rams’ fans to keep an eye on the proceedings in Los Angeles. The Anschutz stadium plan is far from a done deal: He still faces competition for a franchise in L.A., must clear some tough environmental hurdles, and—most importantly—has to find a team to buy or partner with.
Presumably, the four other NFL franchises contacted by Anschutz—San Diego, Minnesota, Jacksonville, and Oakland—are still in the mix. None of them, however, is known to be owned by a business partner of Anschuetz, so to assume that a return of the Los Angeles Rams isn’t an option would be the height of naivety.
You wouldn’t know this from the pathetic state of denial in St. Louis media. The Post reluctantly covered the news of the Los Angeles City Council’s unanimous pro-Anschutz vote with a wire story headlined, “L.A. stadium study appears to overstate tax benefits.”
Wow. Now that’s some spin.
With the exception of the Riverfront Times and St. Louis Public Radio, the movement toward a new NFL franchise—and its clear implications for St. Louis—received no coverage here at all. Maybe that’s a good strategy: If St. Louis closes its eyes and wishes real hard, perhaps all this will just go away.
Hopefully for St. Louis, Miklasz's June 12 advice is right that it’s “way too early to panic about Rams.”
Or if this comes down to a certain friendship, it may be too late.
SLM co-owner Ray Hartmann is a panelist on KETC Channel 9’s Donnybrook, which airs Thursdays at 7 p.m.
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