Business Update with Mark Lacter

What does Leiweke's departure from AEG mean for an NFL stadium in Los Angeles?

KPCC's business analyst Mark Lacter says people interested in the NFL may well be wondering whether the league will provide any clarity on an L.A. team at an upcoming owners meeting.

Steve Julian: Mark, you're a business analyst, what do you think?

Mark Lacter: Are you serious, Steve?  Has the league ever provided clarity on bringing pro football back to L.A.?  And now that Tim Leiweke is no longer CEO of AEG – he, of course, had been the major dealmaker and cheerleader for getting an NFL team - the prospects are a lot less clear.  The big question is whether Leiweke's old boss, the Denver billionaire Philip Anschutz, is willing to cut a deal with the league by building a new downtown stadium?  Frankly, it's doubtful.  However things go, it seems to be time for city officials to move on.  They've been playing footsie with the NFL owners for years - and so far, it's amounted to a big fat zero.  Actually, it's been worse than zero, considering the time and energy that's been spent working on various development ideas.

Julian: There are some good reasons for having an NFL team here.

Lacter: No question, but the city has survived without a team for almost 20 years.  It'll have a much harder time surviving a seriously high jobless rate, a troubled education system, terrible traffic problems, and - of course - a chronic budget shortfall.  So, maybe the focus should be on those issues instead of whether Philip Anschutz likes pro football (apparently he doesn't, by the way).  They also might want to focus less on remaking the Convention Center, which AEG had agreed to finance as part of the stadium project.

Julian: Should LA even be in the convention business?

Lacter: That's a good question.  The City Council has been looking into the possibility of bringing in a private operator to run the operation.  As for a full blown makeover of the Convention Center, it might not be all that necessary, especially if it means the city having to pay instead of AEG.  L.A. is already drawing record amounts of visitor traffic without any big renovation, and the convention business, which is highly competitive, isn't likely to bring that much extra activity.  There is a lot of other more pressing business to deal with.

Julian: Wasn't the Leiweke/Anschutz relationship unusual from the start?

Lacter: Normally, you don't see a billionaire with such a publicly visible second in command.  That's perhaps a reflection of Anschutz wanting to stay in the background.  It was also unusual because Tim Leiweke is known for his bluster - in fact, he would openly talk about battling with Anschutz over business strategies, including the downtown stadium.  There's a cautionary tale here, Steve: no second-in-command is indispensable to the person or people who own or at least control the business - and when you’re dealing with two very independent personalities, the arrangement often ends unhappily.  That appears to have been the case here, with Leiweke being told at the last minute that his boss had decided not to sell Anschutz Entertainment Group - the company, by the way, that  Leiweke really helped build.

Julian: He didn’t get much of a sendoff.

Lacter: I’ll say.  Here's what AEG said in a press release: "We appreciate the role Tim played in the development of AEG and for the many contributions he has made to the company."  I've seen interns get bigger sendoffs.

Julian: He did, though, help remake the South Park section of downtown LA.

Lacter: That’s right – he’s not only responsible for the L.A. Live-Staples Center complex, but nearby development of hotels, condos, and restaurants, as well.  Now, Tim Leiweke won’t have to worry about finding another job - and I'm sure his time with Anschutz has made him quite comfortable financially.  But clearly, this thing did not go down as he had hoped: L.A. still doesn't have a football team, or a stadium, or a remade convention center - and it's questionable whether any of those things are going to happen, though Anschutz insists he’s still interested.  We’ll see about that.

Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.


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