Why selling AEG will be difficult

In retrospect, the Dodger sale was a piece of cake: One major league baseball team, one stadium, and a bunch of land. Where do we sign? Selling Anschutz Entertainment Group is something else entirely. Sports stadiums, arenas, soccer teams, basketball and hockey franchises, theaters, entertainment districts (L.A. Live among them), music festivals, museums - it's a sports-and-entertainment colossus. And the beauty part of the business model is that AEG can make its money in each sector in all sorts of ways - selling tickets, renting out halls, arranging sponsorship deals, and even collecting for parking and t-shirts. They call it a "virtuous circle." But in a way, that's the problem. While potential bidders might be interested in the soccer teams and others might want the real estate and still others might go after the music side, it's hard to imagine single entity wanting the whole shebang. Here's another problem: It's very hard to determine the value of the whole shebang because no company does precisely what AEG does. And the Anschutz people insist that the company will not be sold in pieces - that it's all or nothing. "The sale involves the platform in its entirety," said Lyndsey Estin, a spokeswoman for AEG, a subsidiary of Anschutz Co. Of course the new owners could sell off the assets they don't want, but that would be a difficult, time-consuming process - and might not fetch the kind of money they had planned. From the Denver Post:

Dan Steinberg, the founder of Square Peg Concerts in the Pacific Northwest who started his concert-promoting career in Denver, doubts the deal will close at all. "The things that would have to happen for it to go through are insane," Steinberg said. "The sports teams involved, each of the leagues would have to approve the sale and the new ownership. It would have to be cleared by antitrust, depending on who the buyer is."

Frankly, that's the bet a number of folks are taking: That Anschutz won't find the buyer or the price he's looking for and take the property off the market. He's done that sort of thing before. I guess it's also possible that an investment group will swoop in - as was the case with the Dodgers - but remember this is a far more complicated company. Think of the toxic mix of egos that would be involved, especially as it relates to asset sales and acquisitions? It's a disaster waiting to happen. And what about AEG Chief Executive Tim Leiweke? However you might feel about the guy, there's little question that he built this company from basically nothing to what it is today. Leiweke is said to have a long-term contract with Anschutz - one that could probably be voided under certain circumstances, such as a sale - but no buyer in their right mind would want to see Leiweke go. Matter of fact, it wouldn't be a stretch if Leiweke himself tried to form his own investment group. Which brings up the most important point: Nobody on the outside has the slightest idea of what's really going on - strategies, motivations, alliances, politics, any of it. That's why the city of L.A. has no business cutting a deal on the downtown football stadium until there's clarity on the AEG ownership situation. The city does not have to do this deal right now. Life will go on quite nicely. That the vote is happening at all is more about political legacies (Villaraigosa and several members of the council) than good sense. Could you imagine any business owner cutting a complicated deal with someone who might not be around in a few months? Crazy. And yet that's what city officials are about to do.