Valuing What Anschutz Entertainment Might Be Worth

News this week that the Anschutz Entertainment Group is being put up for sale was a surprise in the sports and entertainment segment.

But what exactly would any prospective buyer be getting for what will likely be a multibillion-dollar purchase?

Anschutz Entertainment is one of the biggest and most prominent parts - but still only a part - of billionaire Philip F. Anschutz's business empire, a panoply of businesses that has included oil and gas drilling, movie theaters and railroads.

But it is Anschutz Entertainment, a formidable collection of entertainment venues, sports teams and live event promotions that was formed in 1999, that has recently defined Mr. Anschutz's public image.

That combination of real estate, entertainment and event promotion, people close to the company and to potential bidders say, is what has so many would-be buyers salivating. They describe the model as a “virtuous circle” that draws in income from rents, ticket sales, sponsorships and many other sources.

It is also what makes valuing the company so daunting, since there are virtually no publicly traded peers that perfectly match up. Live Nation Entertainment, for instance, is the biggest seller of concert tickets in the country - but it doesn't own sports teams.

While the division has taken on global aspirations, nowhere are its goals so visibly defined as in downtown Los Angeles; an article in The New Yorker from January described Mr. Anschutz was headlined “The Man Who Owns L.A.”

There, the company operates the LA Live complex that houses the Staples Center; owns the Kings hockey team and a stake in the Los Angeles Lakers; and sells tickets through its AEG Live subsidiary.

In its most ambitious stroke yet, Anschutz Entertainment has been forging ahead on a football stadium, called Farmers Field, to try to lure in a National Football League franchise.

It is a business model that the company is seeking t o export elsewhere, including to London where the company owns the O2 complex.

The exploration of a sale comes as the demand for sports team franchises is heating up. The Los Angeles Dodgers were sold to Guggenheim Partners in May for more than $2 billion, in an eye-popping sum that nonetheless may be a fraction of what Anschutz Entertainment could fetch at auction. (A person close to one potential bidder provided an initial estimate of the company's value at about $2 billion to $4 billion. Mr. Anschutz and his advisers are likely to believe that amount is far too low.)

Anschutz Entertainment and its bankers at the Blackstone Group, which sold the Dodgers, are likely to argue that an ambitious buyer could use the company's business plan and bring it to yet more regions of the world, from Asia to South America.

Potential buyers who have shown interest include the investment firms Colony Capital and Guggenheim Partners, according to people briefed on the matt er. They also reportedly include Patrick Soon-Shiong, a biotechnology investor who unsuccessfully bid for the Dodgers, according to The Los Angeles Times.

The sales process is likely to take several months, with the goal of concluding early next year, according to a person close to Anschutz Entertainment.

The sales process follows the longstanding playbook of Mr. Anschutz, who has has become one of the country's richest men. This month, Forbes ranked him as the 44th wealthiest American, with an estimated net worth of about $7.6 billion.

He is extraordinarily quiet, having declined interviews for nearly 40 years. What little is known about him personally comes from the occasional loose-lipped confidant, like those quoted in a 2010 article in Forbes:

Those who know or have worked with him say Anschutz is a down-to-earth, hard-driving businessman with a fondness for chomping on little unlit cigars. “He's very shy, a normal fellow, a family person who leads his own life and feels it's none of the public's business,” says Jerry Seslowe, chairman of Resource Holdings, a private investment firm in Manhattan he started with Anschutz and the late billionaire Jay Pritzker. Anschutz, he recalls, “left it up to us to generate the deals, then got involved later.” Adds Robert Starzel, an attorney who served as a top lieutenant for 25 years and is now in private practice: “He values collaboration, likes to get several people's opinions on the same subject. He likes honest debate and listens to people. But he follows his own lead.”

A Kansas native, Mr. Anschutz initially dropped out of law school to help save his father's struggling oil drilling company. That has remained a part of the billionaire's business empire, though how much it contributes remains unknown.

But he has branched out into a number of other ventures as well - many of which have generated enormous windfalls. One of the m ore prominent examples is his foray into railroads, in which he acquired companies like the then-troubled Southern Pacific. He later merged that operator with Union Pacific.

Railroads also gave Mr. Anschutz entrée into the world of telecommunications, as he began building fiber-optic cable along routes and eventually formed Qwest Communications. The telecommunications company's 1997 initial public offering vastly inflated the entrepreneur's wealth - up to perhaps $18 billion by 2000, according to The New Yorker. But some of that paper wealth evaporated after allegations of fraud and insider trading against several top executives. (Mr. Anschutz himself was never accused of insider trading.)

A devout Christian, the billionaire has also taken an interest in producing family-friendly movies through subsidiaries like Walden Media. Those efforts have yielded only a few hits, notably an adaption of “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe” an d the Ray Charles biopic “Ray.”

The director of “Ray,” Taylor Hackford, told The New Yorker about his struggles with his employer's sole limit on artistry:

Hackford said he quit the project twice over Anschutz's profanity prohibition but ultimately was able to use “hip jargon that sounded authentic and profane.” About Anschutz, Hackford said, “Although he was very heavy-handed in this one area, he gave me total autonomy in every other creative facet of the film. Anschutz is a man of his word, a mensch.”

He has also plumbed the world of publishing, counting among his holdings The Washington Examiner, a conservative newspaper; the hyperlocal news network Examiner.com; and The Weekly Standard magazine.

The billionaire is also a major donor to the Republican Party. He and his wife have donated tens of thousands of dollars to G.O.P. candidates and related organizations in 2012 alone, according to OpenSecrets.org.

Yet while Mr. Anschutz appears to enjoy building up businesses, he also appears to have little compunction about selling them when the time - and price - are right. And while he has entertained unsolicited takeover offers for some or all of Anschutz Entertainment in the past, the person close to the company said, the decision was entirely on his own timetable.

“This is how he's operated in the past,” this person said. “He builds companies to get ready to go to the next level, and then sells them to someone who can take them there.”