Anschutz Pushes On in L.A. Despite Woes

In yet another weird episode in Southern California’s troubled affair with the National Football League, Anschutz Entertainment Group recently laid out--and then immediately withdrew--plans for a new stadium in Los Angeles at which two NFL teams would play.

The company says that any deal is off and that it won’t exercise options on land for a stadium near downtown Los Angeles.

Yet knowledgeable business-people in Los Angeles believe that Anschutz Entertainment ultimately will come back with another plan for a stadium near Staples Center.

They base that judgment on private statements by Anschutz Entertainment executives and most of all on the determination of Philip Anschutz, the billionaire principal owner of the Anschutz group of companies and a man whose name one day could be classed with those of Huntington, Chandler, Wilshire and others

who remade the Los Angeles landscape.

Anschutz’s fortune and reputation are under a cloud at the moment because of the steep decline in the stock of Qwest Communications International Inc., a telecommunications company he founded and continues to lead as chairman of the executive committee and the firm’s largest shareholder.

The Securities and Exchange Commission is investigating whether Qwest’s management artificially inflated earnings in 2001 to enable Anschutz and other executives to sell stock at high prices.

Anschutz also sold to Qwest a troubled digital video company owned by another of his companies, causing Qwest last year to take a $33-million write-off--and raising shareholders’ protests.

Qwest stock closed Friday at $4.59 a share on the New York Stock Exchange, compared with more than $30 a year ago and more than $60 two years ago. Anschutz’s wealth may total about $5 billion, rather than the $9.6 billion Forbes listed for him last year.

But Qwest’s troubles don’t seem to be slowing Anschutz’s building plans in Southern California.

Anschutz Entertainment Group is building a national soccer and tennis center at Cal State Dominguez Hills in Carson, where the NFL’s San Diego Chargers will train.

On acreage adjacent to Staples Center, Anschutz is starting work on construction of a retail, theater and hotel complex.

Regal Entertainment Group, majority-owned by Anschutz, has become the country’s largest theater owner, combining three chains including Orange County-based Edwards Cinema Co. He has a long-term vision for re-adapting theaters for the digital age that goes beyond the industry’s current rebound from a slump lasting several years.

Anschutz Pacific Pipeline Co. owns an oil pipeline running through Los Angeles from Sylmar in the San Fernando Valley to refineries in Wilmington in the harbor area.

Philip Anschutz remains relatively little known to the public because he chooses not to talk to the media.

But businesspeople don’t find him secretive.

Those who like him say he’s “a straight dealer, an excellent businessman who can spot the weaknesses or strengths in a project,” in the words of Joseph Alibrandi, retired chairman of North Hollywood aerospace components maker Whittaker Corp., who has had dealings with Anschutz for decades.

Those who dislike Anschutz say he is opportunistic and not civic-minded or generous with charitable contributions. But even leading businesspeople request anonymity before criticizing Anschutz. Among other reasons, many hope to do business with his companies.

Civic Involvement

An irony is that for all of Anschutz’s supposed lack of civic-

mindedness, his business has been intricately involved with politics and Los Angeles.

From 1983 to 1995, Anschutz owned Southern Pacific Railroad. So he owned the rights of way along Alameda Street in 1993, when Los Angeles needed them for the Alameda Corridor freight system, and the railroad transferred the rights of way to the corridor project.

At the time, Anschutz had a pending proposal for the Sylmar-Wilmington oil pipeline, recalls then-Deputy Los Angeles Mayor Steve Soboroff, now president of the Playa Vista real estate development.

“He was straightforward, not high-pressure, in his dealings,”

Soboroff says.

In any case, Anschutz did get a green light for his oil pipeline project, to which he added rights for a Qwest fiber-optic line into Los Angeles. He beat out a rival fiber-

optic proposal by Southern California Edison, the utility unit of Edison International. Simultaneously,

Anschutz received permits to build Staples Center and to acquire

adjacent land for future development.

Staples, built for $400 million, has proved a success, with the basketball teams Lakers and Clippers and hockey’s Kings, along with concerts, the Arena Football League and others using the stadium about 280 nights a year. Anschutz retains 50% ownership of Staples as well as fractional ownership of the Lakers and Kings.

The adjacent acreage that Anschutz acquired is worth more than $200 million, even before development of a proposed retail, dining and hotel complex.

Clearly, Anschutz is betting on the growth of Los Angeles and this region.

Investing in Technology

But Anschutz’s visions go beyond real estate.

For example, he founded Qwest by laying fiber-optic cables along the multi-state rights of way of Southern Pacific. (Then, in 1995, he sold the railroad to Union Pacific Corp., of which he still is vice chairman and the largest shareholder.)

Anschutz’s plan for Qwest was to build a nationwide fiber-optic network for Internet communi-

cations. And that was a good idea--so good that AT&T; Corp., WorldCom Inc., Sprint Corp., the regional Bell operating companies, Global Crossing Ltd. and several other firms built fiber-optic networks too.

The result, as everybody knows by now, was a massive overabundance of fiber-optic lines and under-abundance of customers.

That’s why Qwest has fallen in the last two years.

Anschutz has sold about 16% of his Qwest holdings, worth about

$2 billion. The SEC is investigating the timing and circumstances of early-2001 stock sales. Anschutz retains 301 million shares, or 18%, of the Denver-based company, and has hired a new chief executive who proposes to sell assets to pay down debt.

Staying the Course

But Anschutz continues to pursue a vision for the possibilities of fiber optics and digital distribution of entertainment. That is why he has acquired control of movie theater chains in recent years, why he owns five of the 10 teams in Major League Soccer and why he has been trying to make headway in the concert-management business.

“He sees the content of sports and entertainment providing real value to network possibilities,” says telecommunications consultant Peter Bernstein of Infonautics Consulting.

Anschutz looks ahead to the digital distribution of movies bringing a dramatic reduction in distribution costs for studios--cost savings his companies can share. He foresees digital distribution of sporting events and concerts in theaters or arenas such as Staples and others his companies own in Britain and Germany as attractions that transcend languages and borders.

He has invited the Mexican national soccer team to play in his soccer center, scheduled to open next year on the Cal State campus in Carson. The Los Angeles Galaxy, which Anschutz owns, also will play there.

Anschutz’s vision, as Qwest’s misfortunes demonstrate, may not work out immediately. But he perseveres. Whether the NFL ever comes back to Los Angeles, Anschutz, for better or worse, seems to be here to stay.

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Times staff writer James S. Granelli contributed to this column. James Flanigan can be reached at jim.flanigan@latimes.com.