AEG chief Tim Leiweke characterizes the proposed $1.35-billion football… (Arkasha Stevenson, Los…)
When AEG executives signed the final documents to take over the Millennium Dome in London, giggles could be heard in the adjacent room.
The 860,000-square-foot entertainment dome was regarded as something of a national joke that had soaked up $1 billion in British taxpayers' money and was mothballed before the Los Angeles-based venue operator showed up with an offer.
"It was like they couldn't believe these silly Americans were dumb enough to do this," Anschutz Entertainment Group chief Tim Leiweke recalled.
Ten years later, it's AEG that's laughing.
After a half-billion-dollar makeover that included an 11-screen cinema, a museum and two concert halls, plus a new name — The O2, thanks to a sponsorship deal with the British telecommunications giant — the London venue became the world's most popular concert stage in 2009 and 2010, by number of tickets sold.
The O2 metamorphosis, AEG boosters say, is just one example of the global firm's aptitude for spotting, shaping and selling risky projects. The company is leaning on that record to pull off what Leiweke characterizes as AEG's riskiest project yet: a $1.35-billion football stadium in downtown Los Angeles.
That proposal is fraught with uncertainty. Assuming early City Hall political support holds through talks on a development deal, AEG would have to win over an NFL franchise, probably by persuading an existing team to move here.
It would build "Farmers Field" on public land by moving the west wing of the Los Angeles Convention Center, using nearly $300 million borrowed by the city. Knowing the city is financially strapped, the company has promised to pay for all stadium work and any shortfall in tax revenue needed to pay for rebuilding the Convention Center.
Mayor Antonio Villaraigosa backs the idea, and city analysts have spent weeks negotiating a detailed deal framework, which is expected to be released next week. Leiweke recently warned that he might call off the stadium project if the City Council does not pass a preliminary deal before members take August vacations.
One skeptic is Greg Nelson, who was chief of staff to then-Los Angeles Councilman Joel Wachs when AEG was negotiating to build downtown's Staples Center. He said stadium proposals often overstate their economic value to a city and understate the cost to taxpayers — yet developers are able to tap the "incredible emotional appeal" of sports.
AEG, Nelson said, is especially good at that. "They are master co-opters. They understand how to push the buttons of elected officials — and what it takes to get their support.... They hire the best political consultants and lobbyists who can tell them what it's going to take. It doesn't make them [different] than anyone else, except they seem to be doing it much better and much more."
Since AEG was formed to build Staples Center in 1995, the company has undergone a world-encompassing transformation. By repeatedly finding underappreciated properties, rallying public subsidies and gaining corporate sponsorships to minimize its own exposure, it has ballooned into a $10-billion entertainment and real estate powerhouse.
Privately financed by Philip Anschutz, a reclusive Denver billionaire, the company now owns or manages 100 venues around the globe. There are arenas from Charlotte, N.C., to Sydney, Australia, to Shanghai, and theaters and clubs on the Las Vegas strip and in Times Square. Six convention centers stand in Australia, Malaysia, Oman and Qatar. And four stadiums host soccer, football and rugby in Carson; East Hartford, Conn.; Stockholm; and Brisbane, Australia.
Like an oil driller that discovers crude and then ships, refines and pumps it from affiliated stations, AEG has achieved part of its success by offering a vertically integrated menu unique to its industry. It can develop and operate an arena like Staples, then assure it has something to present by booking the acts and owning the teams that play inside. In Los Angeles alone, AEG holds all or part of the Kings, the Galaxy and the Lakers.
Its concert wing produced 4,500 performances last year, including tours by Bon Jovi, Taylor Swift and the Black Eyed Peas, making it the nation's second-largest promoter, after Live Nation Entertainment Inc. And 49 other divisions combine to push merchandise, stream videos and stage Hollywood galas.
The company's front man has always been Leiweke, 54, a charismatic rainmaker who doesn't have a business degree or even a college diploma — he left school after a year in a Denver junior college. What he does have, admirers say, is a salesman's touch with key stakeholders.
From the day it launched its $350-million Staples construction — with a $71-million boost from City Hall — the company has been skilled at figuring out what public officials care about and then tailoring projects to meet those needs.