Billionaire's Invisible Hand Shapes L.A.
Industrialist Philip Anschutz, intensely private and
'focused beyond belief,' is quietly changing the face of
By Glenn F. Bunting, Staff Writer
Los Angeles Times
Sunday, July 23, 2006
On a warm summer evening in 2004, Philip Anschutz greeted
British Deputy Prime Minister John Prescott at the
$150-million soccer palace Anschutz had created in Carson.
After settling into a luxury suite to watch the Los Angeles
Galaxy battle the San Jose Earthquakes, Prescott asked
Anschutz which side he was rooting for.
"He said it didn't matter because he owned the two teams,"
Prescott recalled in an interview in London. At the time,
Anschutz controlled half of the 10 pro soccer franchises in
The moment captured Anschutz's trademark approach to
investments, which holds that they are to be dominated, not
merely owned. That philosophy has made Anschutz an economic
force in Los Angeles, as important to the region's future,
some say, as the William Mulhollands and Harry Chandlers of
Yet in a city known for its entertainment moguls and
industrialists who seek the limelight, Anschutz is intensely
private. He is a longtime Denver resident and doesn't even
maintain a Los Angeles address.
"Philip Anschutz is sort of like the Wizard of Oz," said Los
Angeles economist Jack Kyser. "He is the man behind the
curtain pulling the levers. Nobody sees him, yet he has a
huge impact on Los Angeles."
In addition to the Home Depot Center in Carson, Anschutz
built the $400-million Staples Center, dug a 130-mile oil
pipeline from Kern County to Wilmington and is pumping $1.8
billion into a sports and entertainment district in downtown
Los Angeles. He also has assembled the nation's largest
chain of movie theaters and operates a Hollywood production
company that is leading a revival of family-oriented films.
"There isn't a single person in the history of Los Angeles
that has put more of his own money into this city," said
developer Steve Soboroff, a onetime advisor to former Mayor
Richard Riordan. "My feeling is we should rename the Harbor
Freeway the Anschutz Freeway."
With an estimated net worth of $7.2 billion, Anschutz ranks
No. 28 on Forbes' list of the richest people in America.
Over the last four decades, he has amassed a global empire
of more than 100 companies, nearly all of them privately
held. In addition to oil and gas, real estate, movies and
sports, his enterprises are active in railroads,
telecommunications, agriculture, live entertainment, art and
Preeminent among the firms is Anschutz Entertainment Group,
which began operating in Los Angeles in 1995 as Anschutz
Properties Co. with the purchase of the bankrupt L.A. Kings
hockey team. AEG now has 50 subsidiaries worldwide, 3,000
employees and annual revenues approaching $1 billion. It
develops major sports and concert venues in the U.S. and
Europe and is the nation's second-largest promoter of live
entertainment, with recent tours starring Paul McCartney,
Kenny Chesney and Prince.
Acquaintances describe Anschutz, 66, as brilliant, stubborn
"He's deeply religious, a man of high integrity and great
character," said Los Angeles Unified schools Supt. Roy
Romer, a friend of Anschutz from his three terms as Colorado
Like many aggressive businessmen, Anschutz also has acquired
his share of adversaries. His litigation record reveals a
sharp-elbowed tycoon willing to pay to make disputes go away
and to keep his public image intact.
During the last three decades Anschutz has paid cash
settlements — all of them confidential — to companies that
claimed they were denied their fair share of profits or were
done in by deceptive business practices, according to
interviews and courthouse documents in California, Colorado
Among the settlements was a multimillion-dollar award to Mel
Gibson, who alleged that the theater chain Anschutz controls
cheated the actor's distribution company out of revenue from
the hit movie "The Passion of the Christ."
George Ablah, 77, a real estate magnate and fellow native
Kansan, prevailed in a legal tussle with Anschutz over a
failed oil and gas partnership.
"He is very tough," Ablah said of Anschutz. "He thinks he is
God. If you question him in any way, he will cut your legs
out from under you…. He is extremely lucky with those
tactics. It has worked out very, very well for him."
Anschutz's Denver-based spokesman, Jim Monaghan, declined to
discuss the litigation, saying only that the number of suits
against Anschutz and his companies is "remarkably small" for
such a large organization. He also said that a settlement is
not an admission of wrongdoing.
Anschutz shuns publicity and declined numerous requests to
be interviewed for this article. According to Monaghan,
Anschutz's last extensive on-the-record interview took place
Occasionally, Anschutz speaks to the media, but insists on
not being quoted. He chatted with this reporter in December
at a London movie premiere but insisted that the bland
exchange be off the record.
Despite his wealth and ambition, Anschutz is barely visible
in Southern California. He flies to Los Angeles about once a
month aboard his jet, stays in a Beverly Hills hotel and
spends weekends at a residence in the Palm Springs area.
With no entourage, no personal office and not even a
reserved parking space in Los Angeles, he goes out of his
way to remain anonymous. Friends say he enjoys jogging alone
or buying a hot dog at Staples Center without being
Perhaps not since Howard Hughes has a multibillionaire with
such a big stake in Hollywood been so secretive.
"Anschutz is an enigma," said Neil Westergaard, editor of
the Denver Business Journal. "He is a very, very private
man, which I think invites a lot of speculation about what
his motives are."
Philip Frederick Anschutz was born in 1939 in Great Bend,
Kan., attended high school in Wichita and studied economics
at the University of Kansas. After graduation in 1961 he
went to Denver to work for his father, wildcatter Fred B.
In the 1974 interview with the State Historical Society of
Colorado, Philip Anschutz described himself as "aggressive
and hard-working." He recalled logging 12-hour days at the
office and working evenings and weekends.
"It becomes almost like alcoholism," Anschutz said. "You
can't break the habit. You eat and drink this kind of work.
I don't think there is anything unusual about that."
What was unusual was Anschutz's knack for spotting bargains
and business trends.
"The guy is an alchemist when it comes to money," said Bob
Scanlan, a merchant banker who has worked with Anschutz.
"Phil would rank up there in my humorless Hall of Fame. He
is just focused beyond belief."
He and his wife of 38 years raised two daughters and a son
in Polo Club, a prestigious neighborhood in Denver. He
bought Eagles Nest Ranch, a 47,000-acre spread in eastern
Colorado where he keeps 2,500 head of cattle, built a golf
course and plays host to a dove-hunting retreat each year
for friends, chief executives and politicians.
Since 2000, Anschutz, his wife and his companies have made
more than $1 million in political donations, mostly to
Republican candidates and campaigns. He has spent millions
assembling one of the nation's finest collections of western
Yet Anschutz shuns many of the traditional trappings of
wealth. For years, he wore a Timex and drove an old Buick
before buying a used Lexus sedan. He has been spotted in a
tuxedo behind the wheel of a rented Ford Taurus en route to
a Hollywood premiere.
Admirers call Anschutz modest and soft-spoken. He rarely
cusses or consumes alcohol. His one known vice: chomping
Tim Leiweke, AEG's chief executive and Anschutz's point man
in Los Angeles, said: "He is to a fault extremely quiet
because seldom is he comfortable being in the limelight.
Phil has nothing to hide. This is a guy who at the end of
the day likes to be private and has no ego."
University of Denver Chairman Dan Ritchie has been a friend
for decades. He said Anschutz lives by "the code of the
West": Be tough but fair. Operate on a handshake. Talk less
and say more. Never quit. Don't promote yourself.
Anschutz's religious beliefs have been scrutinized,
especially within the movie business, because he is regarded
as a moral conservative who has invested heavily in films
that appeal to families and Christians.
Although Anschutz and his wife have worshiped at an
Evangelical Presbyterian church in suburban Denver, they no
longer do so, according to Monaghan. He said that Anschutz
considers himself "spiritual" and now attends services at
churches of various denominations. When in Southern
California, friends say, he prefers spending occasional
Sunday mornings on the golf course.
His Walden Media and Walt Disney Pictures produced "The
Chronicles of Narnia: The Lion, the Witch and the Wardrobe,"
a Christian allegory about the resurrection. "Narnia" is
Disney's highest-grossing live-action film, with nearly $1
billion in box-office and DVD revenues.
Douglas Gresham, a co-producer of the film and the stepson
of "Narnia" author C.S. Lewis, told The Times that he
selected Walden to make the movie because of his regard for
"I believe he's a man of faith, probably someone who's had
some realizations in his life and is trying to carry them
out," he said.
Anschutz has spent about $23 million over the last decade on
a pair of nonprofit groups to promote positive values. His
Random Acts of Kindness Foundation is dedicated to inspiring
generosity, and the Foundation for a Better Life was
established to "help make the world a better place for
According to an analysis of federal tax returns, the
Anschutz Foundation donated nearly $110 million from 1998 to
2004, with about 80% of the money going to nonprofit
organizations in Colorado.
In Los Angeles, Anschutz has rejected requests to support
museums, hospitals and universities in a meaningful way,
according to civic leaders. The tax records show that his
foundation has given $1.9 million — or less than 2% of total
grants — to charities in Los Angeles County.
"He has a great vision for the future of Los Angeles," said
Eli Broad, the philanthropist who is spearheading the
$1.8-billion Grand Avenue development on Bunker Hill. "I
give him credit for that. I wish he would become more
engaged in our various cultural institutions."
Leiweke says such criticism is unfair.
"He is very uninvolved in L.A.," Leiweke said. "He is a
substantial giver in Denver, as he should be."
Anschutz also contributes locally through several AEG
foundations, which report giving $11 million during the last
decade. With the exception of a $1-million gift to Walt
Disney Concert Hall, the bulk of the money went to
education, public safety and community programs.
These donations are focused on assisting immigrant
communities in the neighborhood surrounding Staples Center
as part of a campaign to support "the have-nots," Leiweke
"We understand people get mad at us because we're not a huge
giver to the opera or museums," Leiweke said from his
downtown office. "There are a lot of needs we have to try to
figure out down here. We're very prickly about people who
say we don't give to the community. We just don't give in
ways they want us to give…. Shame on them."
Oil and Gas
On Oct. 9, 1967, Anschutz encountered the first
of three business disasters that would ultimately define him
as a master of opportunity.
He was awakened at 2 a.m. after a well in which he owned a
one-eighth interest blew out near Gillette, Wyo. Anschutz,
then 27, and his chief geologist landed in Gillette in a
rented aircraft about 5 a.m.
Many details of Anschutz's account — taken from his taped
interview with the Colorado Historical Society — could not
be independently verified. Several participants are now dead
and others were unavailable.
As they got within a mile of the site, Anschutz and his
geologist could see oil spewing over the drilling rig. That
was a problem, but it also meant the well had hit pay dirt.
In the next several hours, Anschutz raced around town
contacting landowners and acquiring options on adjoining oil
"I had a lot of concern as to how I was going to pay for the
leases that I'd bought since I didn't have any money at that
time," Anschutz said.
While his crews labored through the night trying to cap the
well, Anschutz flew back to Denver. Upon returning to his
apartment, he watched a report on the evening news of an
explosion and fire at the scene of his rig. A spark from a
pump truck engine had ignited the oil.
The next morning, Anschutz talked the legendary Paul "Red"
Adair of Houston into sending a crew to extinguish the
blaze. He then flew to Casper, Wyo., to meet one of his oil
Anschutz wanted to buy out partner Jeff Hawks. It took seven
hours of haggling, lubricated with shots of whiskey, before
the two men cut a deal: Anschutz would pay all costs related
to the fire — potentially millions of dollars. In return,
Hawks would turn over his one-eighth interest in the well.
The terms were scrawled on a white tablecloth, which for
years hung on Anschutz's office wall.
After flying out of Casper in the middle of the night,
Anschutz spotted flames shooting hundreds of feet into the
red Wyoming sky.
"I thought, 'My God, this is the end. I'll never be able to
overcome all this.' "
While Adair's crew fought the fire for more than a week,
Anschutz recruited investors to purchase shares of the
rights he had acquired from Hawks as well as the lease
options. He then persuaded Universal Studios, which at the
time was preparing to film "Hellfighters" with John Wayne,
to pay about $100,000 for the rights to film Adair's crew
putting out the inferno.
"I subsequently made a lot of money off the oil," Anschutz
said. "There's always a point that if you go forward you
win, sometimes you win it all, and if you go back you lose
everything, and that was that point for me."
By the mid-1970s, Anschutz's company had expanded to about
500 employees and $100 million in annual sales.
In 1979, a massive oil and gas reservoir was discovered on
Anschutz Ranch East, a field straddling the Wyoming-Utah
border. Three years later, shortly before the collapse of
global petroleum prices, Anschutz sold a one-half interest
in his mineral rights to Mobil Corp. for $500 million. The
deal, combined with his existing assets, made Anschutz, at
43, the youngest billionaire on Forbes' list.
He went on to explore oil and gas around the world. One of
his oil companies also built the Pacific Pipeline after a
seven-year legal battle with the Los Angeles City Council.
The line, completed in 1999, carries up to 130,000 barrels
of heated crude oil per day from Kern County to refineries
in El Segundo and Wilmington.
Like many oilmen, Anschutz took on partners to spread the
risk of developing new fields. One of them was Ablah, the
Wichita real estate baron.
The Little George Oil Co. — named for Ablah's diminutive
stature — and the Anschutz Corp. entered into a partnership
in 1985 to explore undeveloped oil and gas leases in Idaho.
But after several deep holes turned up dry, the venture went
Ablah had paid $14.5 million upfront. Anschutz sued him in
1989, saying Ablah owed him an additional $2 million plus
$900,000 in interest.
Ablah countersued, contending in court papers that he had
"relied upon the truthfulness and integrity of Philip
Anschutz." Ablah claimed that Anschutz had withheld
information that the exploratory wells were extremely
"He had suckered me," Ablah said. "I'm a big boy. I didn't
deserve the $14 million back." But when Anschutz demanded
more, Ablah said, he lost respect for the Denver
"He didn't quite treat me fair, and he wasn't quite honest,"
The case went to trial July 24, 1990, in Denver District
Court. On the first day, Anschutz testified that he had
warned Ablah many times that the project was "a 1,000-to-1
The next morning, the Denver Post carried a front-page photo
of the rarely seen Anschutz rushing from the courtroom.
Before taking the stand that day, Anschutz made Ablah a
surprise settlement offer, and the case was dismissed. The
terms were confidential, but a copy of the settlement
obtained by The Times shows that Anschutz dropped his
demands and paid Ablah $750,000 for his drilling rights.
"Who was right and who was wrong meant less to him than his
loss of privacy," spokesman Monaghan said. He added that
several factors led Anschutz to settle, including disruption
to his business, the cost of litigation and unwanted media
The Ablah lawsuit was not the first or last time Anschutz
paid off claims brought by oil partners.
In 1975, a Denver-based petroleum firm that lent Anschutz
$540,000 as part of an exploration deal in Pakistan claimed
that he failed to repay the money. The company sued and, in
a settlement, recovered most of the funds.
In other cases, Anschutz was ordered to pay back a
$20-million loan to a pipeline company and $33.5 million in
royalties to Amoco Oil and other owners in 1994 as part of
the Anschutz Ranch East discovery.
Anschutz also tangled with Amoco over whether his firm owed
$625,695 to settle claims from a 1989 explosion and fire at
a gas processing plant that killed a contractor and injured
11 workers. Anschutz eventually paid, say sources familiar
with the outcome, but not before Amoco characterized their
dealings in a court complaint.
"Over the past eight years, Anschutz has employed a myriad
of stall tactics to delay certain substantial payments in
other settings," wrote Amoco attorney Timothy Beyer in June
1993. "Its position has been to baldly refuse to pay its
Anschutz amassed one of the largest fortunes in
the modern history of the railroad business.
He saw an opening when the U.S. government deregulated the
railroads in the 1980s. Anschutz believed that a
consolidation of transcontinental lines was inevitable, and
he wanted a piece of the action.
In 1984, he bought Rio Grande Industries, parent of the
ailing Denver & Rio Grande Western Railroad, for $500
million. Anschutz paid $90 million in cash and borrowed the
rest. Four years later, he merged it with San
Francisco-based Southern Pacific Transportation Co. for
about $1 billion, most of it borrowed. He also assumed $780
million in Southern Pacific debt.
Southern Pacific was nicknamed the "Sluggish Pacific"
because it was hemorrhaging cash and saddled with aging
locomotives. Shortly after the merger, the railroad giant
was losing $400,000 a day.
It marked the second crisis in Anschutz's business career.
"Everyone thought he would eventually bleed to death,"
Leiweke said. "He bled a lot … but he turned it into
To stave off bankruptcy, Anschutz sold a slice of the merged
railroad to a Japanese shipping line, invested in new
equipment and generated $2.2 billion by selling hundreds of
parcels of surplus real estate.
The properties included downtown L.A.'s Union Station and
177 miles of rail lines that now carry commuter trains to
Los Angeles from Orange County, San Bernardino, Simi Valley
and Santa Clarita.
One of the most sought-after assets was the Southern Pacific
line along Alameda Street. The cities of Long Beach and Los
Angeles needed the right-of-way to build the Alameda
Corridor, a high-speed 20-mile cargo expressway connecting
their ports to downtown rail yards.
Steve Dillenbeck, then the director of the Port of Long
Beach, recalled the first time that local officials met
Anschutz over lunch near Pershing Square. After everyone was
seated, Anschutz walked in sporting a large silver belt
"He didn't say a heck of a lot," Dillenbeck said. "It was
staged very much to show that he is a little extraordinary."
The officials at the table nearly choked on Anschutz's
initial demand: $500 million.
"It is incomprehensible that he would even think we would
pay that amount," Dillenbeck said. "For $500 million, we
could have bought the whole railroad."
The price tag eventually was whittled to $240 million. The
final cost of the Alameda Corridor was $2.4 billion, making
it the county's most expensive public works project.
In 1996, Anschutz negotiated a $5.4-billion merger with
Union Pacific that made him the largest shareholder of the
nation's biggest railroad. Anschutz had parlayed an initial
$90-million investment in the Rio Grande into a $1.2-billion
stake in the Union Pacific.
Before the merger, Anschutz took control of an obscure
Southern Pacific subsidiary that he thought had great
potential. Along with billions in new wealth, it would
create a third business crisis: one of the biggest corporate
accounting scandals in recent years.
The subsidiary was Southern Pacific Telecom, which provided
high-speed data transmission through a network of
fiber-optic cable lines installed alongside railroad tracks.
He assumed 100% ownership of the company, relocated it to
Denver and changed its name to Qwest.
Anschutz took the company public in 1997, and it became one
of the nation's largest telecommunications firms. At the
height of the telecom boom in March 2000, Qwest shares
traded at $64.80, and Anschutz's net worth rose to $18
billion — vaulting him to sixth on Forbes' list of richest
Qwest shares plunged to $1.11 in August 2002 amid an
industrywide collapse caused by excess broadband capacity
and reports that company executives had engaged in a massive
Four former Qwest executives have pleaded guilty to federal
charges, including wire fraud, falsifying documents and
insider trading. Anschutz's hand-picked chief executive,
Joseph Nacchio, was indicted in December on 42 counts of
insider trading after selling $101 million in stock.
Nacchio, who is awaiting trial, has insisted he did nothing
Qwest lost an estimated $94 billion in shareholder value and
slashed more than 23,000 jobs after its merger with
telephone giant US West.
Last year, Qwest agreed to pay $250 million to settle
Securities and Exchange Commission charges of booking $2.5
billion in phony revenues. It also agreed to pay $400
million to resolve a shareholders' lawsuit, leaving
investors to recover only a fraction of their losses.
Anschutz attracted special scrutiny from government
prosecutors and plaintiffs' lawyers because of his role as
Qwest's founder, largest shareholder and "non-executive"
chairman of the board.
According to SEC filings, Anschutz sold about $2 billion in
shares from 1998 to May 2001, a month before Morgan Stanley
analysts questioned Qwest's accounting methods. But, by
holding on to 301 million shares — or 80% of his stock —
Anschutz's portfolio lost an estimated $10 billion in market
The California State Teachers' Retirement System, the
third-largest pension fund in the nation, lost $150 million
investing in Qwest. The group alleges in a lawsuit that
Anschutz, Nacchio and others "engaged in a scheme to falsely
inflate Qwest's revenues and decrease its expenses so that
Qwest would appear more profitable than it actually was."
The case is expected to go to trial early next year in San
Anschutz has maintained that he was unaware of any
Nacchio testified under oath before Congress in 2002 that
Anschutz was "very involved" in Qwest's activities.
"Phil Anschutz and I were close friends for 5 1/2 years,"
Nacchio said. "I spoke to Phil two to three times a week.
Every major decision I made at this firm I sought his
But separate inquiries by the U.S. Department of Justice,
the SEC and Congress found no evidence that Anschutz
exercised day-to-day management authority or had insider
stock information. Attorneys representing Qwest shareholders
examined nearly 9 million pages of documents without finding
anything implicating Anschutz.
"We looked at him very hard because he sold billions of
dollars' worth of stock," said Patrick Coughlin, a partner
in the San Diego law firm that brought the major
shareholders' suit. "His initials aren't on anything. His
signatures aren't on anything."
According to court records in San Mateo County, Anschutz
does not have an office computer or e-mail account and
routinely destroys his appointment calendars. In addition,
all e-mail messages sent through Anschutz's secretary and
all electronic calendar entries are permanently destroyed.
His spokesman said Anschutz is not secretive but simply
old-school: He dictates memos to his secretary and does not
carry a cellphone.
Anschutz reached a settlement in May 2003 with New York
state Atty. Gen. Eliot Spitzer on charges that he had
improperly received "nearly risk-free" initial public
offering shares in exchange for steering investment banking
business to Salomon Smith Barney. Anschutz made $4.8 million
from the IPOs.
Spitzer also sought to recover $1.4 billion in Anschutz
profits from the sale of Qwest shares that allegedly were
inflated by overly optimistic research reports. Anschutz
settled the case for $4.4 million in contributions to New
York law schools and nonprofit groups.
Anschutz's company issued a statement saying the settlement
"very clearly reflects" no wrongdoing.
But Spitzer's office holds a different view.
"If Mr. Anschutz was as innocent in his business dealings as
he claims to be, then a trial would have been the perfect
venue to prove that," said spokesman Marc Violette. "The
fact that he settled this case for $4.4 million speaks
Since last fall, Qwest stock has rebounded to $7.85 a share,
increasing the value of Anschutz's investment to $2.3
billion. In recent weeks, Anschutz and his family trust have
entered into several complex stock trades that netted about
$380 million from
Such transactions continue to gall former employees who lost
their pensions and retirement savings.
Paula Smith, 56, a Denver mother of two teenagers, said she
faces the prospect of working "until the day I die" after
losing nearly $240,000 in retirement savings and $220,000 in
the value of her Qwest stock.
Smith was hired as a technical writer for Mountain Bell in
1980 and took a buy-out in June 2001 — exactly one year
after Qwest acquired the company.
It infuriates her that Anschutz has moved on to make
spiritual films laced with moral messages.
"The thing I resent most about Anschutz is that he never
steps up to the plate and holds himself accountable," Smith
said. "Funding 'The Chronicles of Narnia' is not going to
exonerate him in the eyes of the Lord."
Anschutz began building a Southern California
business empire by acquiring a bankrupt hockey franchise.
He viewed the cash-strapped L.A. Kings as the key to
unlocking a bigger prize, namely the building of a sports
arena that would anchor a sprawling downtown redevelopment
plan. And he already had a blueprint in hand -- one,
ironically, that had been rejected in his hometown.
In 1987, Anschutz proposed a stylish convention center on
about 35 acres of railroad property he owned near downtown
Denver, but lost out to a competing bid.
In 1995, Anschutz and Los Angeles real estate investor Ed
Roski Jr. paid $113 million for the Kings. The purchase
revived Anschutz's dream of rejuvenating a major downtown,
only this time in Los Angeles.
Two years later, Los Angeles city officials approved
locating Staples Center at 11th and Figueroa streets. By
then, Anschutz and Roski had become minority owners in the
Lakers basketball team, which made the new arena home when
it opened in 1999.
As part of the agreement with the city, Anschutz took
control of 30 nearby acres. He paid more than $18 million
for the land and obtained $58 million from city bonds -- to
be repaid with interest -- and $12 million in redevelopment
L.A. Live, Anschutz's sports-entertainment complex, is now
under construction across from Staples Center. The first
phase will open next year. Last month, AEG unveiled plans
for a 1,000-room hotel complex that includes a five-star
Ritz-Carlton and a four-star Marriott Marquis topped by 216
The $750-million project, rising 54 stories above downtown,
attracted controversy last year when the Los Angeles City
Council approved up to $290 million in rebates of hotel
taxes during the next 25 years.
Although the Kings have lost more than $125 million under
Anschutz, his Los Angeles-based sports and entertainment
juggernaut keeps rolling in profits.
Staples Center is widely regarded as the most successful
arena anywhere. Home to five professional sports franchises
-- basketball's Lakers, Clippers and Sparks; hockey's
Kings; and arena football's Avengers -- Staples books an
average of 240 events annually, sometimes two a day. About
4.5 million people pass through its turnstiles every year.
Anschutz aims to triple the number of visitors to his
downtown complex by 2010.
Anschutz owns a total of 14 sports franchises in the U.S.
and Europe. His company is pouring $1 billion into an
ambitious entertainment district on the banks of the Thames
River in London.
The development, which includes a 23,000-seat concert arena,
is similar to Anschutz's L.A. Live, with one notable
exception: Lacking a premier anchor tenantr, the project is
relying on a proposed casino resort.
Competition for the one available mega-casino license in
Britain has ensnared Anschutz in a political controversy.
The British media reported this month that Anschutz had met
Prescott, the deputy prime minister, on at least seven
occasions since August 2002, including the soccer match at
Home Depot Center.
An inquiry by a parliamentary committee concluded Friday
that Prescott violated ethics rules by not disclosing a
two-night stay last July at Anschutz's ranch until after it
was revealed by British newspapers nearly a year later. The
committee said no action should be taken against Prescott,
who has denied that Anschutz sought to influence him on the
Five of Anschutz's sports franchises are soccer teams. He
became attracted to the game in 1994 while watching a World
Cup match at the Rose Bowl. Two years later, he launched
the Colorado Rapids as part of the inaugural Major League
Ignoring the sport's many skeptics, Anschutz believed that
pro soccer could become a viable business in the U.S. By
2002, Anschutz controlled six of the league's 10 teams, with
franchises in Los Angeles, Chicago, Denver, New York, San
Jose and Washington, D.C.
Part of his strategy to make the league profitable is
building soccer-specific stadiums. Home Depot Center, which
opened in 2003, is the home of two MLS teams -- the Glaxy
and Chivas USA -- and is an official U.S. Olympic training
site for cycling, soccer and track and field. last month,
AEG opened Toyota Park in Bridgeview, Ill., for the Chicago
Last year, the Galaxy became the league's first team to turn
a profit. Anschutz recently sold his share of the New York
franchise to the Bed Bull energy drink company for a record
$100 million. He is looking to sell his D.C. United team.
In August, Anschutz will receive the National Soccer Medal
of Honor, the sport's highest award in this country, along
with a spot in the National Soccer Hall of Fame for creating
a foothold for the sport in the U.S.
"Two decades ago, people said this could never be done,"
said Don Garber, commissioner of Major League Soccer. "Two
decades from now, people will ask how it was done, and the
answer will be Phil Anschutz."
When Anschutz started making films in 2000, he joined a long
line of tycoons turned movie moguls -- William Randolph
Hearst, Howard Hughes, Marvin Davis, Ted Turner and Richard
Branson, to name a few. By doing so, he ignored the old saw
that the fastest way for a billionaire to become a
millionaire is to invest in the film business.
"Phil is different," said Ritchie, his friend. "He is
concerned the country is losing its compass. He wants to
express traditional American values in an appealing way for
According to an early mission statement drafted by Anschutz,
the focus of his Hollywood operation is on historical,
sports and adventure films for general audiences. "We
believe that gratuitous violence, use of drugs and smoking,
sex and profanity will obscure the positive message we wish
to impart and compromise the entertainment and commercial
value of our projects."
In a rare speech to a leadership seminar in February 2004,
Anschutz said he expects his films "to be life-affirming and
to carry moral messages." He also conceded that "no one
with any sense" would invest in movies.
"My friends think I'm a candidate for a lobotomy, and my
competitors think I'm naive or stupid or both. But you know
what? I don't care. If we can make some movies that have a
positive effect on people's lives and on our culture, that's
enough for me."
Still, Anschutz's movie company doesn't approve a project
"unless we believe it will be profitable," said David Weil,
chief executive of Anschutz Film Group. Riding the success
of "The Chronicles of Narnia," Anschutz's film operation
turned a profit last year, Weil said.
Anschutz "does get very excited about what we do on occasion
because it is exhilarating to reach people in a very
positive way that is much more direct than operating an oil
well or a railroad," Weil said.
In addition to his production company, Anschutz controls
81.5% of the voting shares of the nation's largest chain of
movie theaters. He created Regal Entertainment Group in
2002 by merging Edwards Theaters, Regal Cinemas and United
Anschutz and a Los Angeles investment firm, Oaktree Capital
Management, paid about $500 million to cover the loans of
the three bankrupt theater companies. Today, Regal operates
nearly 6,400 screens in 40 states. The company issued
extraordinary dividends to shareholder in 2003 and 2004 that
netted Anschutz a combined $741 million.
In 2003, Anschutz was sought out by Mel Gibson, who was
looking for an exhibitor for his controversial "The Passion
of the Christ." At Gibson's invitation, Anschutz saw an
advance private screening of the film in Santa Monica. He
was so moved by the drama depicting the Crucifixion that he
took the unusual step of urging Regal's chief executive to
see the film, according to court records.
"The Passion of the Christ" became the top-grossing R-rated
film. Strong first-quarter profits in 2004, aided by the
success of "The Passion of the Christ," enabled Regal to
issue the second extraordinary dividend.
Bur Regal allegedly reneged on a commitment to pay Gibson's
Icon Distribution Inc. "studio terms," or 55% of box-office
revenues, according to a lawsuit filed by Gibson's company
to recover more than $40 million.
"It was outrageous," said George Hedges, a Los Angeles
lawyer who represents Gibson. "These guys paid themselves
an extraordinary dividend, but they were unwilling to pay
Mel what he was owed."
In court papers, Regal argued that it had agreed to pay
Gibson's firm 34% of proceeds.
Testimony in the case disclosed that Anschutz's theater
group charged church groups a $500 "worship price" on top of
the normal admission to attend special screenings of "The
Passion of the Christ." Regal routinely levies an
administration fee to cover marketing and overhead costs for
Gibson became so upset that he ordered his company to issued
more the $500,000 in refunds to churches and Christian
"Icon was shocked and disappointed that this additional fee
(which was never reported to us) was being charged to
faith-based organization," Icon wrote in a letter
accompanying the refunds.
Anschutz was unaware that Regal tacked on a "worship price,"
said Mike Campbell, the company's chief executive. He added
that Anschutz played no role in negotiating the deal to
exhibit the film.
Regal and Icon reached a confidential settlement in March of
last year. Regal reported in an SEC filing that the
settlement "will reduce previously reported net income by
$8.3 million." That amount is far less than what Regal
actually paid, according to knowledgeable sources.
On April 4, Anschutz and Florence Fang were
honored by UC Berkeley Chancellor Robert Birgeneau and other
top university officials for donating the San Francisco
Examiner's archives to the school's Bancroft Library.
During the ceremony, speakers took turns praising Anschutz,
the new owner of the Examiner, for his generosity. But no
mention was made that the gift's origin stemmed from a
bitter lawsuit between Anschutz and the Fang family.
Anschutz bought the Examiner from the Fangs in 2004,
launching him into the newspaper business. He has since
begun new papers in Washington, D.C., and Baltimore, where
he competes with the Sun, a paper owned by the Tribune Co.,
parent of the Los Angeles Times. Further expansion appears
in the works: Anschutz owns rights to the Examiner name in
more than 65 cities, including Los Angeles, and has
registered the domain name losangelesexaminer.com.
His advisors say the small chain represents the kind of
underappreciated asset that fits Anschutz's portfolio. His
strategy is to grow circulation and attract advertisers by
concentrating on local news and providing free home delivery
to upper-income households.
The Fangs' lawsuit claimed that Anschutz and his advisors
conspired with an Examiner executive to acquire the paper at
a depressed price. The suit sought to overturn the sale,
along with $11 million in damages.
Once again, he found a way to turn a potential liability
into a financial gain.
Court records show that Anschutz hired former Denver Post
Publisher Ryan McKibben as a consultant in 2003 to help
acquire the Examiner. His brother, P. Scott McKibben, was
then the Examiner publisher and had been asked by the Fangs
to find a buyer for the money-losing newspaper.
The Fangs alleged in court papers that the McKibben brothers
tilted the sale in favor of Anschutz. They contended that
Scott McKibben leaked confidential information to the
Anschutz organization and failed to market the newspaper to
other potential buyers.
According to internal memos, Anschutz played an active role
in the transaction.
In one memo, two senior Anschutz executives were assigned
"to handle primary negotiation" with Scott McKibben "based
on PFA direction" Anschutz's initials are PFA.
PFA also was listed as receiving "regular updates" from the
two executives. A "timetable" memo lists a meeting between
Anschutz and Scott McKibben six weeks before the sale.
Two days before the deal closed, Anschutz's executives
demanded the family include the paper's archives at no
additional cost, said E. Robert Wallach, the Fangs'
After the sale, Anschutz retained Scott McKibben as
publisher of the Examiner, paying him a $420,000 salary with
a $180,000 bonus and a country club membership, court
records show. He also named Ryan McKibben chief executive of
Clarity Media Group, his newspaper holding company.
Both McKibbens said in separate interviews that the Fangs'
allegations were unfounded. Monaghan suggested that the
litigation stemmed from "a bad case of seller's remorse."
News organizations reported that Anschutz paid $20 million.
But a copy of the sale agreement obtained by The Times shows
that Anschutz paid $10.7 million for the Examiner, the
Independent newspapers, a printing business and other
Wallach said that, during a break in a sworn deposition in
August, he appealed to Anschutz to settle the case. The
lawyer said he told Anschutz that taking the archives was
"just not right" and that he risked losing a big jury
Anschutz agreed that day to a confidential settlement, which
included a provision to destroy his deposition testimony.
According to sources familiar with the deal, Anschutz
consented to several demands made by the Fang family,
including donating the archives in the name of Florence Fang
to UC Berkeley.
"If Anschutz had not been a man of integrity and a good
businessman, it would not have happened," Wallach said.
Still, Anschutz figures to cash in. By donating the
archives, his company is eligible for a substantial tax
deduction. The precise amount could not be confirmed, but a
copy of an independent appraisal obtained by the Examiner in
November 2004 offers a clue.
The archives were assessed at $18.4 million — more than what
Anschutz paid for the entire newspaper.
Researcher Maloy Moore
contributed to this report.
Bunting can be reached at firstname.lastname@example.org or (213)
L.A.: Denver billionaire Philip Anschutz has
become a major economic force in Southern California. He
owns sports teams and arenas, promotes concerts and art
exhibits, operates a Hollywood film company and is building
a sprawling sports and entertainment district in downtown
Los Angeles. An overview of his local business interests:
* STAPLES CENTER:
The arena, which Anschutz built in 1999, is home to five
professional sports teams, including the Lakers and Clippers
of the National Basketball Assn. About 4.5 million people
pass through its turnstiles every year. Anschutz envisioned
the $400-million arena as the centerpiece of a revitalized
* REGAL THEATERS:
In 2002, Anschutz created Regal Entertainment Group by
merging three bankrupt theater chains. Today, Regal is the
nation's largest chain, with nearly 6,400 screens in 40
* L.A. LIVE:
The sports-entertainment district is under construction
across from Staples Center. A live theater will open next
year, and restaurants and nightclubs in 2008.
* TOUR OF CALIFORNIA:
In February, Anschutz Entertainment Group inaugurated an
eight-day, 600-mile professional cycling race from San
Francisco to Redondo Beach.
* HOME DEPOT CENTER:
The complex, which opened in 2003, is home to two pro soccer
teams, the Galaxy and Chivas USA. It is also a U.S. Olympic
training site for cycling, soccer as well as track and
* ANSCHUTZ FILMS:
His film group's family-friendly movies include "The
Chronicles of Narnia: The Lion, the Witch and the Wardrobe"
(2005). The Christian allegory was Anschutz's first
(Part 2 of 2)