A company controlled by Denver billionaire Philip Anschutz has purchased Fox Entertainment Group's 40% interest in Staples Center, paving the way for work to begin on a massive $1-billion addition to the area surrounding the arena.
The deal, estimated at about $200 million, gives Anschutz's entertainment and development company, AEG, greater control of the downtown arena and surrounding 28 acres. It plans to build a 4-million-square-foot development called L.A. Live, which could house a 7,000-seat theater, a 1,200-room hotel, other smaller hotels, restaurants, stores, offices and residential units.
Buying out Fox was one of the final steps necessary to get the long-anticipated project off the ground, said Timothy J. Leiweke, president of AEG. "Otherwise we wouldn't have taken a happy relationship with a good partner and bought them out."
AEG hopes to unveil its plans -- expected to include radio and television facilities for broadcasters that would compete with Fox -- in coming weeks, Leiweke said. Construction could begin by the end of this year.
Under the agreement with AEG, Fox will keep its ownership share of the Fox Sports Sky Box restaurant at the arena. And Fox's Southern California Sports Report and other sports-oriented shows will continue to be broadcast from Fox's studio located in Staples Center and operated by AEG Teleworks. Fox will continue to be a paid sponsor of the arena.
After Fox parent News Corp. sold the Dodgers this year, owning a stake in Staples Center no longer made sense, a Fox source said. When the media giant originally struck the deal with AEG, Fox envisioned building a regional sports behemoth in Los Angeles that would include teams, stadiums and cable channels.
News Corp. bought the Dodgers in 1998 and started a second cable channel in Los Angeles to carry Dodger, Clipper and Mighty Duck games. Its primary sports channel airs Laker, Anaheim Angel and King games. As part of the Staples agreement, News Corp. bought options for minority stakes in both the Lakers and the Kings. The idea was to eventually consolidate its sports assets into a single entity that Walt Disney Co. could not match.
Disney, which owns ESPN and the Ducks, later sold the Angels and abandoned its plans for building a regional sports broadcast empire.
