Sacramento Kings suitor Burkle also vying to buy arena operator AEG
02/02/2013 12:00 AM
04/08/2013 2:30 PM
The financier who wants to prevent the Sacramento Kings from leaving town has emerged as a possible buyer for AEG, the sports-entertainment conglomerate with extensive ties to the NBA.
Ron Burkle's interest in AEG, or Anschutz Entertainment Group, could strengthen Sacramento's hand as it fights with a Seattle investment group for control of the Kings.
AEG, which put itself up for sale last summer, operates arenas for eight NBA teams and is a partner with the league in an arena in Shanghai. The Los Angeles company also has committed to working on an arena project in Sacramento.
Billboard magazine reported that a group including Burkle, fellow Southern California billionaire Patrick Soon-Shiong and Goldman Sachs is one of three finalists in the bidding for AEG.
A longtime Burkle associate, Los Angeles investment banker Lloyd Greif, confirmed Burkle's involvement in the AEG bid.
As previously reported, Burkle is in serious discussions with Bay Area investor Mark Mastrov on a bid for the Kings. The group plans to submit its offer directly to the NBA in hopes that the league will reject the Maloof family's pending sale of the franchise to investors from Seattle.
If Burkle's group winds up buying AEG, it could bolster its argument to the NBA about the Kings.
"Advantage in this, I think, is clearly Sacramento's," said Bay Area sports consultant Andy Dolich, a former NBA team executive.
For Burkle, acquiring AEG would blend well with a bid for the Kings, Dolich said.
"What better way to build a network? You acquire the No. 1 company in the world at building venues and you add another jewel, an NBA team," he said.
Burkle already has ties to AEG. His hockey team, the Pittsburgh Penguins, just hired AEG to run its arena.
Greif said Burkle's bid for AEG doesn't interfere with his Kings proposal. "He can do two deals at once; he can do 10 deals at once," he said.
"It's further evidence that he likes sports and entertainment businesses," Greif said.
Burkle has spoken to NBA Commissioner David Stern about converting Sacramento's struggling Downtown Plaza into an arena for the Kings. The mall's owner, JMA Ventures, is open to the idea, and city officials this week said they will analyze the site if it becomes the investors' chosen location.
AEG pledged $59 million toward the construction of a Kings arena at the downtown railyard – a deal that was killed by the Maloofs last April.
At the NBA's urging, AEG President Tim Leiweke said last month the company is still committed to a Sacramento arena if the Kings stay in town. He said he would leave it to the city to pick a location.
AEG developed the Staples Center in Los Angeles and turned much of the surrounding real estate into a popular entertainment district. The company owns hockey's L.A. Kings and is part owner of the Lakers.
If Burkle's group buys AEG, and he succeeds in acquiring the Sacramento Kings, AEG might have to sell its share of the Lakers.
It's believed the company would sell for as much as $8 billion. Billboard said the other finalists are Guggenheim Partners, an investment firm that bought the L.A. Dodgers; and a partnership between Santa Monica investment firm Colony Capital and an investment fund run by the government of Qatar.
The Financial Times said Australia's Westfield Corp. – the former owner of Downtown Plaza – is also in the running for AEG.
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