Explaining Southern California's economy

What Larry Ellison brings to the AEG sale — $41 billion

Oracle CEO Larry Ellison demonstrates Or

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Oracle CEO Larry Ellison. The third-richest man in the U.S. might be a buyer for AEG.

It looks like Larry Ellison, CEO of Oracle and number three on the latest Fortune 400 list of the richest Americans, may join the bidding for AEG, the entertainment and sports conglomerate that was recently put up for sale by multibillionaire owner Phil Anschutz.

Ellison's arrival on the bidding scene, when is being managed by the investment bank Blackstone, isn't exactly a surprise. He has shown and interest in sports teams in the past and has been involved with the America's Cup yacht race. In 2010, he bought a tennis professional tennis tournament held each year in Indian Wells.

If, as Reuters reports, his interest is legitimate, he joins a host of potential bidders, including Patrick Soon-Shiong, the richest man in Los Angeles, Guggenheim Partners (a subsidiary of which bought the Dodgers earlier this year for more than $2 billion), and private-equity firms, including Los Angeles' Colony Capital and Mitt Romney's old firm, Bain Capital.

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NFL refs lockout: A $10 billion league versus $16 million in labor demands

Detroit Lions v San Francisco 49ers

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Head coach Jim Harbaugh of the San Francisco 49ers argues with referees during their game against the Detroit Lions at Candlestick Park on September 16, 2012 in San Francisco, California. On Monday night, the replacement refs may have lost the Green Bay Packers a game against the Seattle Seahawks.

Had enough yet? NFL players, coaches, and fans seem pretty fed up, after a controversial conclusion to Monday night's game between the Seattle Seahawks and the Green Bay Packers. Touchdown? Interception? "Simultaneous catch?" 

The replacement referees brought in while the regular refs are locked out in a labor dispute were disoriented by it all, but it's not as if we haven't been warned and warned and warned some more that something like this was happening. The question is: Will the NFL budge on the lockout, now that the nightmare scenario — potentially botched call that costs a team the game in the final seconds — has come to pass?

The numbers on the refs' side are all...rather small, relatively speaking. True, average pay is about $150,000 a year. But there are less than 200 NFL refs, and in a league that's looking for $10 billion in annual revenues by next season, with $12-$14 billion in sight, you'd think that such a small group with such a large impact in the overall package could command more. Especially when you consider that in 2011 the NFL wrapped up a $3-billion-per-year extension to its TV deal.

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AEG sale: Guggenheim Partners and Soon-Shiong form bidding group

Government And Business Leaders Speak At Urban Economic Forum In Los Angeles

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Magic Johnson greets Patrick Soon-Shiong during a Urban Economic Forum co-hosted by White House Business Council and U.S. Small Business Administration. They could be partners (sort of) if Soon-Shiong and Guggenheim Partners buy AEG.

Patrick Soon-Shiong — the richest man in Los Angeles, minority owner of the Lakers, and recently thwarted suitor for the Dodgers — has reportedly hooked up with none other than the investors who did the thwarting on his billion-plus bid for the Boys in Blue: Guggenheim Partners.

Or at least the adventurous investing subset of Guggenheim — a relatively staid Chicago-based manager of insurance-fund investments and other assets totaling around $180 billion — made up of CEO Mark Walter and executive Tim Boehly. They formed Guggenheim Baseball Management with Magic Johnson as a front man to snatch the Dodgers away from Soon-Shiong and hedge-funder Steven Cohen at the eleventh hour, with a bid more than $500 million above what anyone had expected.

It was the biggest deal in U.S. sports up to that point. But if Soon-Shiong, Walter, Boehly and whoever else they yank onboard manages to buy all of AEG, the deal would blow the Dodgers' $2 billion away. It could go for anywhere from $4 billion to even as high as $7 or $8 billion.

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How much could LA sports and entertainment giant AEG be worth in a sale?

AEG

In this rendering released by AEG, the proposed football stadium to house a NFL team in Los Angeles, California is seen. Today, AEG's parent company announced that it's seeking buyers for the entertainment and sports group, but L.A. Mayor Antonio Villaraigosa said that the stadium plan will move forward.

Earlier today, the Anschutz Corporation announced that it's "exploring" or "planning" a sale of the Anschutz Entertainment Group (AEG) — various media outlets reported the announcement differently — and has hired the the mergers-and-acquistions arm of the Blackstone Group to manage the bids. From the company's statement, however, the objective seems to be to transition "AEG to a new qualified owner," which sounds very much like this is the real deal.

A substantial minority stake in AEG — 49 percent — was nearly sold to Ticketmaster and Cablevision in 2008. The transaction didn't ultimately happen, but it was thought to be worth $200 million, making AEG at the time worth around $400 million in total. [UPDATE: I misread the NYTimes DealBook report from 2008 — AEG wasn't thought to be worth $1 billion at the time.]

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Dodgers bidding war: Mark Cuban is out but Magic and the money guys are still in

Dodger Stadium Bleachers

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The bleachers stand empty at Dodger Stadium in Los Angeles, California.

Just a quick update on the sale of the Los Angeles Dodgers. The bids were submitted last week and already a few potential buyers have dropped out. Most prominent among these is Dallas Mavericks owner Mark Cuban, who tried to buy both the Chicago Cubs and the Texas Rangers when they available were (he failed in both cases). 

Magic Johnson, the Lakers superstar and successful regional businessman, is still in the running, however. As are two of the big money guys who've been discussed as prospective owners: East Coast hedge-fund king Steven Cohen; and LA-based private-equity duke Tom Barrack

Additionally, St. Louis Ram's owners Stan Kroenke — a player whom I hadn't written about — made the cut, which was managed by Dodgers owners Frank McCourt in concert with the investment back that's advising him on the sale, Blackstone Advisory Partners. Given that the Rams could be the new LA NFL franchise, depending on how things go with the AEG Downtown stadium project (the project is still in search of a team, and it seems to be down to the Rams and Raiders), I'm not sure how Kroenke could own two sports teams in town. But that's for the NFL and Major League Baseball to sort out.

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