Billionaire will leave boards of Qwest, Regal, Union Pacific
By Jeff Smith, David Milstead And Joyzelle Davis
Rocky Mountain News
Wednesday, March 1, 2006
Denver billionaire Philip Anschutz is dropping from the
boards of Qwest Communications, Regal Entertainment and
Union Pacific Railroad this spring to focus on his private
investments. Anschutz associate Cannon Harvey also is
resigning as a Qwest director, marking the third Anschutz
official to leave the Denver telco's board in the past
year. That means Anschutz, Qwest's founder and largest
stockholder with 300 million shares, will have no
representation on the company's board.
Anschutz officials have been targets of disgruntled
shareholders almost since Qwest's accounting problems
surfaced in 2002.
Jim Monaghan, a spokesman for Anschutz, declined to comment
on whether Anschutz simply got tired of the criticism and
said the timing was appropriate given the strong management
and boards of the three companies.
Monaghan denied the decision had anything to do with the
possibility that former Qwest Chief Executive Joe Nacchio,
who was recently indicted on insider-trading charges, will
point fingers at Anschutz at a potential trial.
"It had nothing to do with any legal issues or anything of
that," Monaghan said. "The timing is because we're entering
the proxy season and they have to get their proxy statements
Anschutz, 66, had served on the various boards for a
combined total of more than 30 years. Anschutz particularly
acknowledged Qwest CEO Dick Notebaert's leadership in
working with board members to bring Qwest through a
difficult period, Monaghan said.
Anschutz technically is declining to stand for re-election
to the Qwest and Union Pacific boards and is resigning from
the Regal board.
Anschutz owns nearly 5 percent of Union Pacific's stock,
dating back to when the Omaha-based railroad company bought
Anschutz's Southern Pacific. He has 56 percent of Regal
Entertainment, which he assembled through the purchase of
three troubled theater chains and a subsequent public
holding. Each holding is worth more than $1 billion at
current market prices.
"These moves will allow Mr. Anschutz to devote more time and
attention to his privately held investments -- something he
has desired to do for the past several years," said a
statement issued by Monaghan.
Anschutz's empire in the past decade has expanded to include
daily newspapers, Hollywood production studios, live
entertainment and sports franchises.
AEG, one of dozens of Anschutz's privately held companies,
says it owns more sports teams and events than any other
company. Among those are the Los Angeles Kings hockey team,
five Major League Soccer teams and a stake in the Los
Angeles Lakers basketball team. AEG also is spearheading a
$1.7 billion redevelopment project that intends to turn a
skid row-adjacent Los Angeles property into a Times
Square-like entertainment district. Another Anschutz
subsidiary, AEG Live, is the second-largest concert promoter
after Clear Channel.
Anschutz's Film Group in December released the first
installment of the C.S. Lewis series
The Chronicles of Narnia,
which has grossed more than $657 million in worldwide box
office receipts, as well as last year's biopic
Ray. The film
group has 16 films in active development or distribution.
It was Qwest, at its peak, that drove Anschutz's wealth to
all-time highs, roughly $18 billion in 2000.
Anschutz split the small telco from Southern Pacific in 1991
and acquired the Qwest name in 1995. In 1997, it went
public under new CEO Joe Nacchio and grew so big so fast it
was able to acquire Denver-based phone company U S West in
But the collapse of the telecom industry, coupled with the
revelation of improper accounting, led to the stock's
collapse. The Securities and Exchange Commission, in
alleging misdeeds at Qwest, called it "a $44 billion
fraud." Qwest has since settled the case for $250 million.
Notebaert thanked Anschutz and Harvey for "their years of
dedication, hard work and insight."
"As Qwest's founder, Phil Anschutz brought great vision and
leadership to the company," Notebaert said in a two-sentence
Tom Friedberg, a former telecommunications analyst who
closely followed the development of Qwest through the years,
noted that Qwest hasn't been Anschutz's company for a while
"Dick Notebaert has been successful turning the company back
into U S West in everything but name," said Friedberg, now a
management consultant. "He's loaded the board with
blue-ribbon CEOs instead of a group of directors who really
wanted to change the paradigm of American
telecommunications. . . . There's been a disconnect between
the Anschutz folks and the Qwest folks, and this is just
Donna Jaegers, a telecommunications analyst with Janco
Partners in Greenwood Village, said it's unusual for someone
with such a history with a company and large stock holdings
to leave a board. Anschutz still owns 16 percent of Qwest.
"It brings up the question: Are they going to try to sell
their holdings?" Jaegers said. "And maybe they're afraid
of what's going to come out in the Nacchio trial."
Said Monaghan: "I know of no plans to sell stock in any of
the three companies."
Nelson Phelps, executive director of the Association of U S
West Retirees, reacted to the news with elation.
"Oh, you're kidding me," Phelps said. "All I can say is
'Hooray' with a capital H. This is the best news I've heard
all year. I just hope he doesn't dump his shares."
The retirees, as well as major Wall Street proxy-advisory
firms, alleged that Anschutz and his associates on the Qwest
board lacked independence.
Proxy-advisory firm Glass Lewis said they should step down
for being present at the scandal. Lynn Turner, Glass Lewis'
managing director for research, said it's "a positive
development for investors when directors who oversaw a
company while it was cooking the books and misleading
investors, step down. Hopefully, any remaining directors
who served managment, and not investors, during this same
time period would follow in the footsteps of those who
stepped aside today."
Philip Anschutz's empire
spans many industries, from theaters to railroads, and
sports teams to oil. Among the holdings of Denver-based The
• A majority
stake in Regal Entertainment Group, which controls former
independent theater chains United Artists, Regal Cinemas and
• Nearly 5
percent of the Omaha-based Union Pacific railroad
San Francisco Examiner
and Washington Examiner
Center sports arena in Los Angeles
• Five pro
soccer teams, the NHL's Los Angeles Kings and a stake in the
Los Angeles Lakers
• A stake in
Denver-based Forest Oil