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Sports Mailbag: 7/22/05
I was deeply troubled when I read Bob Smizik's July 17 article (Reality for Montour's board is one thing: Money) about ESPN's new reality show featuring the Montour Spartans.
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He hasn't granted an interview in more than 25 years, but those who know him say the 63-year-old tycoon is a visionary. He has certainly developed a reputation for proving others wrong--a prerequisite for an American soccer investor.
Despite staying out of sight, the . soccer community has no qualms about spotlighting Anschutz's efforts. After the . upset Portugal in its opening-round game at the World Cup, defender Jeff Agoos praised Anschutz's commitment to the sport. "We were wearing the jerseys, but he was one of the guys out there as well," said Agoos.
American fans back in the States should also have been singing Anschutz's praises throughout June. Were it not for Anschutz, many of the World Cup games would not have been televised live in the States. In January 2002, Anschutz created Soccer United Marketing (which also includes MIS backer Lamar Hunt and Dentsu) and acquired the . English-language TV rights for the 2002 and 2006 World Cup, as well as the 2003 Women's World Cup.
The group then brokered a deal with ABC/ESPN to air the games, covering some production costs itself. The group also acquired MLS's telecast and sponsorship rights through 2006--essentially ensuring that Anschutz would remain committed to MLS for at least the next four years. AEG is also building a $130 million sports complex in Carson, Calif. ,that includes a 27,000-seat soccer-specific stadium for the Los Angeles Galaxy and a training center for the . team.
These investments earned Anschutz the nickname "Uncle Phil" from American soccer fans. But why does this avuncular figure fund . soccer? For starters, he's a sports nut. The Kansas-born entrepreneur regularly attends MLS games in Los Angeles and Denver, and he is also often spotted at the home games of the Lakers and Kings. On Anschutz's vast Denver ranch, he and his guests--who often include . United and Colorado Rapids players--enjoy horseback riding, fishing, and golf. He also regularly plays tennis and runs marathons, which he always finishes.
Anschutz commits himself to the long haul in the boardroom, as well. Even though MLS has lost more than $250 million since it kicked off in 1996, AEG has increased its investment in the league in recent years, and it now operates five of MLS's 10 teams (the Rapids, United, Chicago Fire, Los Angeles Galaxy, and MetroStars).
There is a worry that Anschutz virtually runs MLS, but league commissioner Don Garber insists that AEG doesn't solely dictate league decisions by means of controlling its board of governors. Some measures that affect the league can be passed with a simple majority, while others require a two-thirds margin. Though the league has never revealed how voting rights are distributed, Garber says Anschutz does not hold half of the voting power just bemuse he operates 50% of the league's franchises. "We have a wide variety of checks and balances in place, and we will continue to enforce them," says Garber.
Despite the perception that MLS's lack of investors is proof of its instability, Garber believes Anschutz's inflated investment provides MIS "economic credibility" as it seeks to expand to other markets and build soccer-specific venues. Indeed, multi-ownership in MLS is nothing new. The Hunt Sports Group operates two teams, the Columbus Crew and Kansas City Wizards. And the Kraft family, which runs the New England Revolution, also operated the San Jose Earthquakes for two years before dropping the team in 2000.
"Having a small group of committed investors is better for the long-term success of the sport than a large number of [backers] who are unwilling to reach our goals," says Garber. "I don't believe that allowing AEG--the most committed soccer group in the country, perhaps the world--to have a large interest in MLS is anything but very, very good for us. Anschutz, and his group have made a massive commitment to the sport. Soccer needed someone to tell the naysayers, `I'm right, and you're wrong. I've made bets on businesses that everyone said wouldn't work and I've proven to be right. My next bet is on soccer.' Anschutz is that person."
MLS isn't Anschutz's only investment to suffer in recent years, however. When shares of Anschutz's telecommunications company, Qwest, began to soar in 1999, Forbes magazine estimated his net worth at $ billion. Last year Qwest stock plummeted, and the company lost billions. It even became embroiled in an Enron-style accounting scandal, and a group of employees sued me telecommunications giant, claiming it mismanaged their 401(k) retirement benefits. Anschutz's personal worth greatly suffered. This year, Forbes listed him as the 54th wealthiest person in the world with $ billion, a personal loss of more than 810 billion. Despite the Qwest fiasco, the mogul had the foresight to maintain ownership of fiber-optic cable lines he built along the route.
Anschutz did not come from a wealthy family. He was born in Russell, Kan., in 1939 and graduated from the University of Kansas with a degree in finance in 1961. He had to cancel plans to attend law school when his father Fred, a cattle rancher with a failing oil and gas drilling business, became ill. In 1967, Anschutz discovered a major oil well in Wyoming, which soon caught fire. He hired firefighting pioneer Red Adair to put out the flames and sold the film rights, which were used as the basis of the John Wayne movie "Hellfighters." The idea paid off: Anschutz pocketed $100,000 from the deal, enough to keep the family business afloat.
During the 1970s, Anschutz and his father discovered one of the largest natural gas reserves in the country underneath a piece of land they owned in Utah. By 1982, Anschutz had already earned his first billion by selling his oil interests before worldwide petroleum prices collapsed. Always the opportunist, he took the profits and invested them in real estate and agriculture, becoming a billionaire many times over. "You don't have to be all that special to succeed," Anschutz told students in May when he was inducted into the Junior Achievement's National Business Hall of Fame in Colorado Springs. "Thank goodness in my high school they didn't have a Least Likely to Succeed Award. I probably would have won it."
Anschutz's dive into the sports world began in 1995 when he and real estate developer Edward Roski Jr., bought the Kings, who had filed for bankruptcy. The deal included an option to buy a stake in the Lakers as part of a plan that also included the construction of a new arena. That was the beginning of a project that became the $400 million Staples Center, which is today home to the Kings, Lakers, and the NBA's Los Angeles Clippers.
Anschutz is currently interested in bringing the NBA and NHL to Europe. The AEG purchased the debt-ridden Millennium Dome in London with plans to transform it into a 20,000-seat sports and concert venue. It also is looking to build an arena in Berlin.
Whatever Anschutz decides to get involved with, two things appear certain: He will never back down from a challenge, and he is loyal. "To me, it's not failure that stops people," Anschutz told students. "It's the fear of failure that stops people."
Anschutz--who is married with three kids--also advised students that "family is first and everything else is second." MLS hopes that devotion extends to his extended family: his millions of nieces and nephews in the American soccer community.
Philip Anschutz's Business Holdings
COMPANY NAME TYPE OF INDUSTRY
Anschutz Exploration Energy
Chicago Fire Professional sports (MLS)
Colorado Rapids Professional sports (MLS)
Concerts West Concert promotion
Crusader Entertainment TV/film
. United Professional sports (MLS)
Forest Oil Energy
Goldenvoice Concert promotion
Los Angeles Galaxy Professional sports (MLS)
Los Angeles Kings Professional sports (NHL)
Los Angeles Lakers Professional sports (NBA)
MetroStars Professional sports (MLS)
Pacific Energy Group Energy
Qwest Communications Telecommunications
Regal Entertainment Group Entertainment real estate
San Jose Earthquakes Professional sports (MLS)
Spring Communications TV/film
Staples Center Entertainment real estate
Union Pacific Railroad Transportation
Walden Media TV/film
RELATED ARTICLE: MLS's Other owner.
BEFORE PHILIP ANSCHUTZ BEGAN TO pump money into MLS, there was Lamar Hunt. One of the original organizers of the American Football League and the founder of the Dallas Texans in 1960 (who became the Kansas City Chiefs in 1963), Hunt was an integral part of the AFL/NFL merger that led to the popularity of the Super Bowl. Hunt's love of soccer began in 1967 when invested in the NASL's Dallas Tornado, winners of the 1971 Soccer Bowl.
Hunt, 70, who served as chairman of the Dallas World Cup Host Committee in 1994, became one of MLS's founding backers when he signed on as investor-operator of the Columbus Crew in 1996. He went on to build this country's first soccer-specific stadium in Columbus, Ohio and, along with his son Clark, Hunt Sports Group now also runs the Kansas City Wizards.
Hunt says MLS will someday make soccer a desired entree on this country's sporting menu. "It took [The NBA and NFL] a while to get going," says Hunt. "Soccer won't succeed at the expense of others, but it will be a big sport in America."
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