Sale of AEG throws curve into quest to bring NFL back to L.A.
The plan to sell entertainment behemoth Anschutz Entertainment Group has thrown a new curve in the two-decade quest to bring professional football back to Los Angeles, leaving some allies at City Hall blindsided and forcing Mayor Antonio Villaraigosa to explain why he did not divulge the information sooner.
Villaraigosa and other city leaders insisted Wednesday that AEG’s plan to build a $1.2-billion football stadium in downtown L.A. is still on track, with the proposal expected to sail through the council next week.
The only potential hangup, officials said, is if new owners seek to change the complex and carefully negotiated financial agreements. The documents require AEG, owned by billionaire Philip Anschutz, to make up the difference if revenue from the stadium is not enough to cover the city’s debt payments for the project, which includes a $315-million renovation of the convention center.
Some in the community argued Wednesday that a key vote on the stadium deal should be delayed until taxpayers know who is going to run AEG. At a news conference, Villaraigosa sought to assure taxpayers that the sale of AEG would not alter its financial obligations.
“Whoever is buying this team is going to live by the deal that we negotiated,” he said.
Villaragosa appeared to be the only official who knew about the sale before it was announced late Tuesday. Councilman Bill Rosendahl said he was “stunned” by the news. Even Councilwoman Jan Perry, whose district includes the stadium site and who is considered AEG’s closest ally on the council, was in the dark until the day of the announcement.
A combative Villaraigosa defended his decision to keep the information secret and said AEG did not request he do so. He did not tell the high-level analysts as they were evaluating the deal, including $391 million in debt to be issued for the project. “I’m the mayor. I knew,” Villaraigosa said, declining to say how long he had been aware of AEG’s plans.
“I’m not going to tell everybody everything we’re doing because we want a football team, and a lot of what happens here has got to be negotiated quietly,” he said.
Perry voiced continued confidence in the stadium deal, but said she wished the mayor had mentioned AEG was being sold. “I do not like to be surprised,” she said. “We are all supposed to be working together.”
Even if the council acts next week, the stadium financing agreements won’t be executed until AEG shows that it has acquired a team for the proposed Farmers Field. That process could take at least until next spring, when NFL owners meet and could consider possible franchise moves.
If and when a team is signed, city officials would issue bonds to pay for the construction of a new wing of the convention center. An existing wing must be demolished to make way for the stadium.
Wednesday’s assurances did not satisfy mayoral candidate Kevin James, a former federal prosecutor who called on the council to postpone a stadium vote until the new owner is known. “It may be an entity with no real history or relationship with L.A., and that’s a real risk,” he said.
One potential stumbling block for the stadium project has been Philip Anschutz’s apparent reluctance to pay the price some NFL owners want for part or all of their teams.
Former city commissioner Steve Soboroff, who was pivotal in the deal to build Staples Center, said new AEG ownership would not hurt the chances of L.A. getting a team, and could help.
“You may get a buyer that’s so passionate about football, that they may be willing to do additional things,” he said.
Andrew Zimbalist, a sports economist at Smith College, said the NFL is wary of the financial deal AEG has worked out with city officials calling for AEG to cover any shortfall in taxes and lease revenue needed to pay off the convention center bonds.
“A new owner may think that the deal is too rich for the city,” he said.
An AEG representative had no comment.
Since opening Staples Center 13 years ago, AEG has emerged as an influential force in city politics, putting its financial weight behind candidates and causes. The company was the single largest donor to a measure that rolled back term limits for council members in 2006. And it provided a six-figure contribution two years later to a tax measure championed by Villaraigosa.
Villaraigosa and the council gave AEG a taxpayer subsidy worth up to $270 million to build L.A. Live, the entertainment complex next to Staples Center that featured downtown’s first new skyscraper in 20 years. In 2008 the council voted to sell AEG signage rights for the convention center — a plan that is on hold until the stadium project is completed.
The prospect of new AEG ownership is unsettling for Victor Citrin, who lives in the Pico-Union neighborhood just west of the stadium site. He wondered how a new owner would address traffic and air pollution created by the 72,000-seat stadium — and argued that the council should hold off until the sale of the company is completed.
“The new owner is going to be the partner we’re going to have to deal with,” he said.
Times staff writer Sam Farmer contributed to this report.
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