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

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

However, with Anschutz seeking something like $10 billion for AEG in its entirety, Ellison has one very big thing going for him over the possible competition.


And lots of it. Forbes estimates his net worth at $41 billion. In theory, he could buy AEG and have plenty left over to pick up BlackBerry-maker Reseach in Motion and struggling Internet giant Yahoo.

It is difficult to overestimate the leverage that this brings Ellison, who is unique among AEG buyers in that he could conceivable go it alone, without having to join with other investors. His arrival could also tempt Anschutz to value the company he and his executives built up over 15 years at the high end of the bidding range. Say goodbye, single-digit billions sale price!

For the NFL, this could be very good news. In the debate over bringing a team to Los Angeles to get things moving on building a new stadium in Downtown L.A., the league has wrestled with Anschutz's seeming reluctance to simply buy a team outright. In April, Anschutz said he would do that — and write a check for the stadium, as well — but his decision to sell AEG may telegraph his true enthusiasm for that game plan.

Ellison, on the other hand, isn't really interested in owning half a team so that he can get a real-estate deal done. And buying an NFL team, for perhaps $1 billion, would barely cause him to break a financial sweat.

Obviously, when the asking price of something is $10 billion, it's good to be worth four times that.

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