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Discussion in 'D.C. United' started by dsheon, Jul 30, 2002.
Nah - we will get away with it as he was a board member and can say they were lied to by management.
At issue is that he sold mega shares before the stock tanked. If that's how you define being mislead than sign me up.
See - this is a simple thing.
Given that Anschultz originally owned all of Qwest (pretty sure he spun it off railroad he owned) he owned a large chunk. He just claims he was diversifying his portfolio at the time and needed the money to buy the Scum and United.
He says he was never made aware of the fact that the financial numbers were not what management was presenting them to the board as. It would take a smoking gun like a document saying Uncle Phil knew and condoned the accounting in 1999.
Even then - is it a misstatement based on what were thought to be proper accounting methods or an outright fraud? It will be hard to prove anything. That, and I would be willing to bet Uncle Phil has his assets protected from seizure.
I hope you're right. There is a grand jury investigating Qwest however. That will be interesting and I think we're hardly out of the woods on this.
I think as long as has has historically sold off chunks of it, then he is in the clear. If he wrote in his diary, "Need to sell today before we announce the bad financials" then he could be in trouble. I will guess he is in the OK area!!
Slightly OT but Geeez, every other thread on this forum is a total bummer. Reyes blowing out his knee, the worst offense in the league, Gazza and his problems, pre-game analysis on how bad we're gonna get whacked in Chicago, etc.....It just goes on and on. I'm either gonna need some serious counseling after the season or a liver transplant.
It all makes sense now. The MLS has just been a money laundering operation.
Welcome to the DC board Wheezy. You may get slammed for this debut post, but I think it is not too far from the truth. Though to be a laundering op, the money would need to come full circle. From everything that I understand, MLS certainly does spend all those dimes that Uncle Phil sends its way.
That being said, every businessman needs a good money losing venture for tax shelter. I'll reserve judgment on Phil due to the fact that this will all probably get played out big-time in the very near future, considering that he is a serious backer of Cheney...and that's the really juicy part of the story that will not go away.
Phil Anschutz is definitely in trouble. The question really is how much trouble is he in and how much of an effect it will have on MLS and DC United.
Anschutz was very closely involved in the day-to-day running of Qwest and he cannot credibly claim to be an ignorant board member as some earlier posters have claimed. He was co-chairman of the board until Joseph Nacchio quit as chief executive last month.
Nacchio, the main guy under scrutiny, was hired by Anschutz in 1997, so presumably Uncle Phil knows he had huge stock options coming.
A Bloomberg News article by Dana Cimilluca that ran in the Business Section (I never was able to find it online) of the Washington Post on July 11 reported the following:
"Nacchio's 2001 salary, bonus, long-term incentive pay and other compensation totaled $27.3 million. In addition, he got $74.6 million from exercising options, part of more than $300 million in sales of Qwest shares since he was hired by billionaire oilman Philip F. Anschutz in 1997. Options give a holder the right to buy stock at a preset price."
"Anschutz, who stepped down as Qwest co-chairman when Nacchio was replaced, couldn't be reached for comment. With an 18 percent stake at the end of March, he is Qwest's biggest shareholder."
"Qwest has $5.6 billion in debt due in the next year. The company had $1.38 billion in cash and equivalents in March."
"Qwest stock today (July 10) plunged 83 cents, or 32 percent, to $1.77 a share. The decline from $66 in March 2000 has wiped out more than $100 billion in stock market value."
A senior executive from Qwest (not Anschutz) was supposed to be testifying before the Senate Commerce Committee today. I assume it was planned as a fairly hostile hearing since other scheduled witnesses included execs from maligned companies such as WorldCom and Global Crossing.
Even if Qwest avoids bankruptcy and Uncle Phil isn't directly accused of anything, his credibility will be damaged and his pocketbook will be drastically lightened.
On the Chicago Fire's stadium construction thread you will find reference to a recent SoccerAmerica "MLS Confidential" report in which Tim Leiwecke, president of Anschutz Entertainment Group, infers that, because of increased costs, Anschutz nixed Leiwecke's approval of efforts to build a modular stadium at the Arlington, Illinois racetrack. This was not the only issue that killed the stadium deal, but it may indicate that Anschutz is starting to feel a serious financial pinch.
I don't expect AEG to be financing any new stadiums in the near future (not counting the one in LA, which is already under construction).
I don't know what proportion of Anschutz' diminishing wealth was tied up in Qwest but I'm pretty sure that it was many times more than the total value of AEG.
Garbaggio - I see what you are trying to say but the simple fact is that they have not even been able to nail CFOs directly responsible for these types of things so if you think they can get to Uncle Phil it is a little bit of a reach.
Like I said earlier - without a smoking gun there is no way to tie Phil to the decision to falsify revenues. He gave up day-to-day control in '97 when Nacchio was hired.
All Phil needs to do is prove that he had a credible reason to sell the stock - diversifying his portfolio, had a cash flow problem, anything that justifies it. He then can fall back on the fact that he is still the largest stock owner and if he had known the truth he would have dumped it all.
This is nothing more than politicians trying to act like they are accomplishing something before the elections. Both parties are trying to use corporate fraud as a campaign issue. There will be a few guilty parties, but Uncle Phil won't be one of them.
As for the percentage of his wealth in Qwest - the $ figure is large but as a percentage it is not that large from what other reports have said.
I guess if Anshutz get's called into court, they won't be showing it on Court TV because of his hatred towards cameras and being photographed? We will get pictures of him for once? You'd think if he wanted to launder money that badly then he would've built the Fire's stadium ESPECIALLY because it turned out to cost $10 million more than expected.
from the article we know that he had at least $1.5 billion in non-Qwest money as of his stock sale in May 1999. I'm sure he has a diversified portfolio but I suspect that his Qwest holdings made up the largest proportion of his wealth before the stock tanked.
Anschutz is closely tied to Joseph Nacchio, who may absorb the brunt of any Congressional outrage (staged or not) and would, I guess, be the most likely one to face legal repercussions. Anschutz' voluntary resignation as co-chairman of Qwest's board of directors last month coincided with Nacchio's forced resignation. That is probably not a coincidence.
You mentioned that no one has been nailed yet but this whole issue has only been at the forefront for a relatively brief time period. The Enron story did not come out until sometime after Sept 11 and it took several months to develop (actually it still is developing). Although no one has been legally nailed just yet, I'm pretty sure we will see it relatively soon.
I don't have reason to believe Phil Anschutz is in danger of going to jail, but it's bad for the league if MLS' #1 sugar daddy sees most of his wealth evaporate.
I like what Phil Anschutz has done for professional soccer in this country. I hope he comes through this in reasonably good financial shape and with his reputation unscathed so that MLS doesn't suffer. But I have no idea whether he was running his corporate empire responsibly.
thats a very good point - hard assets, especially illiquid assets such as a stadium - are much harder to take than cash
Most of his wealth in Qwest has already evaporated. Also, Qwest never made up more than half of his wealth - the man owns railroads, oil, movie theaters, the Lakers, the Staple Center, etc, etc.
Uncle Phil still has plenty of money.
Most of his wealth tied to Qwest has already evaporated. He diversified, and has already committed funding for MLS for at least 5 years. You are probably right that his tolerance for losing money in MLS is much smaller than it once was, and he is less likely to single handedly fund stadium building. However, I doubt he is going to walk away from his investment if he stills believes there is a long term future for the MLS. Having SSS is essential to that long term future, so I would imagine he is stilling will to build, given the right place and price, albeit on a lengthier time horizon than previously thought.