Forbes just came out with their anual list of the 50 richest people in America. Phil Anschutz came in tied for 36th on the list with $4.3 billion. This compared to his ranking in 2001 of 16 with $9.6 billion. Those of you with a degree of mathmatical ability should notice the large ($5.3 billion) difference between the two. Anschutz's financial condition is frequently discussed on these boards so I thought it pertinent to post. If it needs to go to a better board, moderators, feel free to move. Also, don't freak-out, Anschutz has plenty of money and will not withdraw his support of MLS anytime soon. This was just an FYI, not an ominous warning. Please enjoy the remainer of your flight. Should you desire assistance please press your call button and a flight attendant will promptly see to your needs. Thank you.
For anyone who doesnt know about St. Phil's finances. Check out this link: www.anschutzinvestments.com I don't think we have to worry about his money much.
The trend's even worse if you include the year 2000: ...........Anschutz Year.....Net Worth....Ranking 2000......$18 bil...........6th 2001......$9.6 bil..........16th 2002......$4.3 bil..........36th Notice that the approximate 1/2 life of his wealth is 1 yr. Extrapolate that exponential decline into the future and we have: 2003......$2.1 bil..........80th 2004......$1.0 bil..........180th 2005......$0.5 bil..........400th ... 2014......$750,000 ... 2020......$10,000 ... 2025.....Medicaid eligible
Do the math. . . If MLS really has lost 250 million over the first 5 years, that is 50 million a year. At that rate, it will take 20 years to chew up 1 of those Billions that St. Pete has. The issue with MLS is not the money to back it. The issue is at what point does it start to make money. If it doesn't by the end of the five year TV deal, it never will. Then, they will shut down. I think, after the LA stadium goes up, and Chicago goes back to Soldier you will see attendence moving into the 17-20K range. Look for TV ratings hovering around 1, which will get it into black. At that point MLS is go for the long haul. This isn't rocket surgery.
I think the whole key for their longevity is if teams move into SSS. If many of these are built, this league will never fold. Because before they are built, the investors have figured what they need to be profitable, and they'll figure that it is worth it. Once you see more of these SSS go up, you don't have to worry about the league folding.
After looking at the array of companies that Anschutz is involved in, it looks like his particular diversification is in a lot of sectors that have had a hard time lately. Oil and natural gas prices have not risen in real terms in quite some time. Entertainment is a bit of a luxury good. The economic downturn has hit that sector very hard. Derugulation and innovation has made the telecommunications sector much more competitive, reducing the profits of a number of firms. An awful lot of "net worth" is the value of stock holdings. The same kind of drops that have affected eveyone's retirement accounts have affected the net worth of our aristocracy too. Anschutz just happens to participate in sectors where this volatitility makes for bigger swings. Lower lows often go along with higher highs. It might be the case that Anschutz's 6th place ranking in 2000 was artificially high. I'd be interested to see whether MLS has been affected more or less than other professional leagues in the US by the business cycle.
Hattrix is spot on with that analysis. Also, another few things to consider, Anschutz made his money on oil, railroad, and telecom. While VW's 2000 number is accurate, I'd be curious to see what Anschutz's 1995 number was that he felt strong enough to invest heavily into MLS as a startup. If I'm not mistaken, it was a lot lower than the 2000 figure, so any extrapolation should consider this as well. Additionally, telecommunications has gone through the single worst inustry implosion since the origination of the United States. It is hit MUCH harder than the internet industry, or the steel industry, or the other ones that have cried about their situation. Telecom makes sense, and the industry WILL survive, and the driving monetary forces (i.e. wireless and internet) are steadily rising in demand. The industry will recover, and when it does the companies still in existence will start making a hansome profit. IMHO, Anschutz is still strong enough to survive until that point. And, the decline is at or near the bottom. Now the feeding frenzy for the bankruptcies hits its full stride. After that growth will appear. Hopefully some of this happens by 2005 and Anschutz re-ups his committment, and I think it will. The attendance is fine, it's steadily rising, the World Cup is growing interest, now what we really need is more TV exposure. This will not happen until soccer fans start becoming NIELSEN HOMES and tuning the dials to soccer. Also, MLS needs to be in a few more big markets, like Philadelphia, Detroit, Seattle, etc. so our footprint of interest increases and TV will not require MLS to pay them to get onto TV. And through it all, St. Phil will still be one of the wealthiest men in the country, and still supporting MLS. Notice, he still dwarfs most NFL owners, and they're franchises require much bigger money for stadiums, payrolls, etc., so the danger is bigger there than in MLS. -Tron
Anschutz is getting out of hardware (QWest) and moving into content (sports, movies). It's a move he's been planning for a while. He wouldn't have lost as much if he had moved out a couple of years earlier.