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AEG and Oak View Group: Who is interested in KeyArena?

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Two groups show interest in renovating Seattle's KeyArena. Who are they?

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AEG Facilities & Oak View Group
AEG Facilities & Oak View Group

To paraphrase The Who, meet the new effort, same as the old effort.

Last week, Seattle mayor Ed Murray officially acknowledged that the city is entertaining ideas about renovating and/or repurposing KeyArena in efforts to revitalize Seattle Center on the whole. Murray's press release announced that the city will open up a Request for Proposal process in January 2017.

Murray further revealed that two groups have expressed interest: AEG and the Oak View Group.

Everyone wants to be careful not to impede upon the exclusive partnership between the city, King County, and Chris Hansen's investment group established by a Memorandum of Understanding in October 2012. The MOU, to explore a potential arena in the SoDo neighborhood, expires in late October next year. So, both Key-focused groups have approached the potential project as a new concert and conference venue with the possibility of supporting sporting events.

Prior to the KeyArena news, Hansen proposed a revised offer to the city to privately fund the SoDo arena in exchange for a necessary street vacation, tax breaks similar to the other stadia in town, and the money from the sale of the street to go to a vital roads project.

Have no doubt that the city now wants to consider multiple options on a new arena to entice both NBA and NHL franchises. The mayor even spoke with Hansen over the summer to let him know of the idea, and Hansen is said to have given approval to the exploration.

This begs two questions: Just who are these groups, and do they have the ability to get this done?

AEG

AEG, the Anschutz Entertainment Group, is a name many sports and music fans are familiar with worldwide. The umbrella for investment group Anschutz Corporation is the world's largest owner of sports teams and sporting events. They are number two in the world behind Live Nation for presenting live music and entertainment events under their AEG Live brand.

Oilman Philip Anschutz took over the family company from his father Fred in 1962, striking it big in 1968. In the 1980s, Anschutz purchased raillines, including Southern Pacific, which also had a telecommunications business. He separated the telecom and eventually merged it with Qwest Communications, which Anschutz acquired in 1995.

1995 is the year that Anschutz and real estate developer Edward Roski, Jr. bought the Los Angeles Kings NHL franchise. In 1997, they began plans for a new state of the art hockey arena, and following a 25 percent stake purchase of the Los Angeles Lakers (now 50%), they opened Staples Center in 1999 for both hockey and the NBA.

Anschutz was a big investor in a new major professional men's soccer league founded in 1993 as part of the effort to win the United States selection as host of the 1994 World Cup from FIFA. When Major League Soccer first took to the field in 1996, Anschutz was owner-operator of 2 of the 10 clubs, the Colorado Rapids and the Los Angeles Galaxy. They added a third club, the Chicago Fire, in 1998.

AEG was formed in 1996 to manage these sports investments, and Anschutz hired Tim Leiweke as President and CEO of the umbrella. Leiweke is a name to keep an eye on in all of this.

The corporation continued to make big gains in the petroleum, telecom, and rail industries throughout the '90s, earning billions in each. It became particularly influential in politically navigating mergers with Southern Pacific and Union Pacific railways, as well as Qwest's hostile takeover of US West Communications and eventual merger with CenturyLink.

Anschutz turned attention to mass media, film production, and movie theater chain ownership. In 2002, Anschutz became majority owner of Regal Cinemas, Edwards Cinemas, and United Artists Theatres, and merged them all under the Regal Entertainment Group banner.

AEG began to acquire additional sports and performance venues, as well as provide operation service to many others. They eventually formed AEG Facilities, a standalone division under AEG Live, to manage them. AEG Facilities currently owns and/or fully or jointly operates over 120 venues worldwide, including Staples Center, StubHub Center, Sprint Center, Target Center in Minneapolis, San Diego Sports Arena, Nokia Theatre Times Square, Manchester Arena, The O2 Arena and Wembley Arena in London, AmericanAirlines Arena in Miami, Turk Telekom Arena in Turkey, and many more.

Following the loss of the SuperSonics in 2008, AEG Facilities was hired by the City of Seattle to manage and operate KeyArena. That they would be interested in redeveloping the building (or property) doesn't come as a surprise.

This past August, the AEG Facilities Global Solutions division was formed to consult with sports teams or cities and municipalities on developing new venues.

In 2002, AEG had proposed building a new stadium in Downtown Los Angeles to attract an NFL team back to the city. The Los Angeles Raiders and Los Angeles Rams had both bolted from Southern California in 1995. That proposal fell through, but the group attempted a second proposal in 2010. Headed by Leiweke himself, plans for a stadium near Staples Center attracted enough interest to land a potential naming rights deal from Farmers Insurance. It didn't attract an NFL team, though, and Farmers Field fell by the wayside.

Rams owner Stan Kroenke got approval from the NFL to build a stadium in Inglewood's Hollywood Park, and was granted relocation to move his team from St. Louis back to Los Angeles ahead of the 2016 season.

In September 2012, AEG went on the market. However, the sale was called off in March 2013 as Philip Anschutz, now a known recluse, announced he was interested in "re-engaging" in the business. Anschutz fired Leiweke and installed another AEG exec, Dan Beckerman, as president and CEO. It's believed that the failure to garner any bidders for the $8-$10 billion asking price during the sale, as well as not being able to secure an NFL team for Farmers Field, is what led to Leiweke's dismissal.

Oak View Group

Following his departure from AEG, Tim Leiweke was hired by Maple Leafs Sports & Entertainment Ltd., owners of three major league franchises, the Toronto Raptors (NBA), Toronto FC (MLS), and of course, the NHL's Toronto Maple Leafs. The group also owns Toronto teams in developmental and lower divison leagues; owns and/or operates a handful of facilities, including Air Canada Centre; and owns the Leafs TV network and NBA TV Canada.

Hired in June 2013 to make a splash, by most accounts the relationship didn't work out well. There aren't too many demonstrable on-field accomplishments by Leiweke during his time helming MLSE.

It's said he was caught in the middle of a tumultuous association between majority owners Bell Canada and Rogers Communications. His relationship with Larry Tanenbaum, CEO of MLSE and head of minority owners Kilmer Sports, also inexplicably soured within months.

Yet, David Shoalts of The Globe and Mail argues that Leiweke had a bigger impact on Toronto sports than he's given credit. Quite a few would reason he was instrumental in setting the Raptors on their current path of success by hiring Masai Ujiri as GM. More important, Leiweke was key in securing the NBA All-Star Game, the World Cup of Hockey, and the world junior hockey tournament for Toronto in 2016. All of which, according to Shoalts, have made the Queen City of Canada "a much bigger noise on the North American sports scene than it’s ever been."

Leiweke left MLSE in June 2015, both to help his friend David Beckham explore bringing an MLS franchise back to Miami, and to form his own business. That business began to take shape in late 2014 as a potential partnership with Irving Azoff, chairman and CEO of Azoff MSG Entertainment, a joint venture with The Madison Square Garden Company owned by James Dolan.

Irving Azoff has had a long, illustrious career in entertainment. He originally made his bones as a music agent in the 1970s for acts like Dan Fogelberg, Boz Scaggs, Steely Dan, and is particularly noted for working with the band The Eagles for over 40 years. He eventually became chairman of MCA Records in 1983, where he had a successful run turning the label into the No. 2 pop music company in the late '80s. He left to join Warner Music Group with a deal that allowed him to create the Giant Records label, which he ran for the majority of the 1990s.

Azoff returned to artist management and in 2004 reformed his company Front Line Management Group with Dolan's MSG Company, representing musicians as varied as Bon Jovi, Christina Aguilera, Van Halen, Journey, Maroon 5, and comedian and TV host Chelsea Handler.

In 2008, majority ownership of Front Line was acquired by Ticketmaster, the entertainment ticketing and marketing company, and Azoff became CEO. Concert and event promoter Live Nation bought Ticketmaster in 2010. After a year of power struggles with Live Nation head Barry Diller, the company bought the remaining ownership of Front Line, removed Diller, and installed Azoff as chairman and CEO.

Azoff left Live Nation to form Azoff MSG Entertainment with Dolan in 2013. The artist management, music publishing, and live entertainment production company also helps MSG manage The Forum in Los Angeles. He's also on the boards of Clear Channel Communications, IMG, and Starz.

The Oak View Group was formally announced in November 2015 with Leiweke as founder and CEO and Azoff as senior board member. The key to the their offering is the "Arena Alliance."

The Alliance is a group of 22 top North American venues that will work in concert similar to a union. The invitation-only group includes Madison Square Garden and The Forum, as well as Pepsi Center in Denver, United Center in Chicago, the new Golden1 Center in Sacramento, MSG's planned music-only arena in Las Vegas, and others.

"Having an opportunity to build on the strengths of the best arenas in the business and align the 75 million fans that come through their doors is something unprecedented in our space," said co-chairman Peter Lukko. "We’re buying together, selling together and thinking together in a manner that’s never been seen in our industry." - Forbes

OVG will offer consultation on business management, ticketing, marketing, security, vendor and labor relations, and scheduling, as well as bringing the members together twice a year to share experience and work together on solutions.

The members will also have collective buying power for services; work to create content together, including artist residences in venues, special and regional tours, and TV and social media content; and will work to offer nationwide sponsorship opportunities rather than single venue deals.

Speaking at Venues Today's VT Rise Conference in August, per Amplify magazine, Leiweke pushed the idea that the alliance gives them leverage over promoters like AEG Live and Live Nation, as well as taking back the secondary ticket market from companies like StubHub. It's a means of bringing more control and money back to the member venues.

He also said the Oak View Group has money it’s looking to spend, telling the audience "we’ve got a fund and we’re out buying things," he said. "One’s a ticketing company, another is an app for ordering food in facilities. Another is a tech company that’s going to help us think outside the box, another is a security and terrorism and consulting firm. We’re looking at trade publications. We’re looking at conferences. We’re looking at a new league that we’re helping to start and create."

Two other key execs with OVG and the Arena Alliance are co-chairman Peter Luukko and vice president Ned Collett. Luukko currently serves as executive chairman of Sunrise Sports & Entertainment, owners of the Florida Panthers NHL club. He was president of the Philadelphia Flyers for nearly 20 seasons from 1994 through 2013, and was president and chief operating officer of Comcast Spectacor, another facility owning and management company.

Collett also comes from the venue development and management field. He was a managing director and executive vice president at BASE Entertainment, a live entertainment and theater management company out of Las Vegas and New York. He was CEO with Pure Management Group, a talent management company. He also served as executive vice president of North American venues for Live Nation.

As gravy to his and Azoff's own connections, Leiweke's brother, Tod Leiweke, was CEO of the Seattle Seahawks from 2003 to 2010 and of the Seattle Sounders FC from 2008 to 2010 through Paul Allen's Vulcan Sports & Entertainment. The younger Leiweke was a major force behind bringing Pete Carroll to Seattle. He was also acting president of the Portland Trail Blazers for a brief time in 2007. He's currently COO of the NFL, and also served as CEO of Tampa Bay Sports & Entertainment (NHL's Tampa Bay Lightning), president of the Minnesota Wild, and was an exec with the Vancouver Canucks and the Golden State Warriors.

It's fair to say Tod has local connections. And a few sports connections to boot.

A KeyArena project has a lot of challenges, particularly traffic and parking hurdles that appear to be insurmountable. Yet, the two groups showing interest are not only legit, but have the experience to potentially get something done in Lower Queen Anne. How they respond to the city's RFP will really tell the story.

The next question: Is either group actually interested in team ownership?