Selling AEG to one buyer was a long shot

When Philip Anschutz announced that he was selling AEG, the wheels started turning. Was this the perfect time for Los Angeles sports? Was it possible that one group would emerge to own sports in a city like no one ever had?

Anschutz's Kings had just won the Stanley Cup. The Clippers, for the first time ever, were matching the buzz of the Lakers, both tenants in the AEG-owned Staples Center. Even soccer was in the conversation, thanks to David Beckham and back-to-back championships by the AEG-owned Los Angeles Galaxy, who won both titles in the AEG-owned Home Depot Center.

And then there was the big kahuna. AEG had an NFL stadium in Los Angeles already conceptualized, complete with a ready-to-go $700 million naming rights deal and ready to break ground at NFL commissioner Roger Goodell's will.

Anschutz is rich and smart, gathering an incredible group of assets not only in Los Angeles but around the world. But he never fit Los Angeles. Despite virtually owning the town's sports landscape, you'd be hard-pressed to find many Angelenos who could pick him out in the crowd. The number of times he had spoken to the media over the years was few and far between, and he certainly wasn't freely spending his $10 billion in the city's hotspots.

So when Anschutz announced in September that he was selling his company, there were many in the area who allowed themselves to dream. Imagine a big player coming into the marketplace, striking a deal with an NFL team, buying the rest of the assets and virtually controlling the sports scene in the nation's second-biggest city.

But there were many problems with this line of thinking. It started with the NFL. No NFL owner would move the team to Los Angeles if that owner wasn't getting all the revenue generators that Los Angeles provided. If AEG didn't own the team, the company wouldn't be able to give the sweetheart deal that other cities have given their team. Although the plans for Farmers Field were artificially moved along to simulate momentum, the truth was in order for everything to work, AEG, and its new owner, would have to have a stake in that team.

Then there was the problem of a single sale and the valuation. Anschutz insisted that it was an all-or-nothing proposition. Take all of AEG or forget about it. It's easy to understand that Anschutz didn't want to cut up his baby, but it narrowed the potential bidders significantly. Guggenheim Partners, which had just bought the Dodgers for an astounding $2.15 billion, flirted. So did Patrick Soon-Shiong, the man who bought a share of the Lakers from Magic Johnson, and private equity firm Colony Capital with Qatar's sovereign wealth fund. Anschutz was looking for $8 billion, which didn't work because arena ownership and operation don't fit into the class of normal businesses no matter how much you look at the balance sheet, especially since none of these bidders were experienced stadium operators.

In the end, this sale was for one man and one man only, and that was Larry Ellison. The Oracle CEO, who is the third-richest man in America and the fifth-richest man in the world (Forbes estimates he's worth $43 billion), might have taken a shot at instantly becoming the sports titan of Los Angeles. We know he loves sports, given his investment in sailing and his failed attempt at buying the Golden State Warriors. We know he has a huge ego and would love to be the toast of the town. And we know that he hasn't accumulated the wealth he has by being risk-averse.

When Ellison didn't bite, the market effectively wasn't there.

The pieces that Anschutz had to offer Los Angeles in an AEG sale came at a time that seemed too good to be true. Turned out it was.