AEG Expects $10B

Initial estimates of the sale price hovered around the $4 billion figure making the rounds when news broke of the potential sale. Reuters, citing unnamed sources, reported that bids would be expected to be in the “high single-digit, low double-digit” billions just to make it past the first round of consideration.

A 25-page informational packet was sent to potential buyers, including wealthy individuals, private equity firms, real estate companies, and friends and rivals alike, Reuters reports. A source with knowledge of the document told Pollstar the memorandum went out Oct. 8.

Among the names making the rounds as interested parties are Los Angeles billionaire Dr. Patrick Soon-Shiong and L.A. Dodgers owner Guggenheim Partners. Others receiving the memorandum are reported to include Thomas H. Lee Partners, Bain Capital, Colony Capital and Liberty Media – which owns 26 percent of AEG rival Live Nation Entertainment.

Financial details of the privately held AEG likely won’t become public during the process – they weren’t included in the initial memo and potential bidders will certainly be asked to ink confidentiality agreements before receiving that all-important information. That process is expected to begin by the end of October.

Blackstone Advisory Group – which also handled the Dodgers’ $2.15 billion sale in April – is managing the AEG auction. It’s going to take some expert managing, too, because the sheer number and variety of assets involved – and which Anschutz prefers be sold together – makes the auction a complicated one.

While AEG is thought of as a sports and entertainment entity, its primary business has long been real estate and development. With more than 100 global venues ranging from an arena network to soccer stadiums, that’s a lot of real estate.

And valuable real estate, too: it includes L.A.’s Staples Center and future Farmers Field football stadium, London’s O2 Arena and China’s Mercedes-Benz Arena, any of which would likely be valued separately at $1 billion or more.

Complicating matters further, AEG holds stakes in several sports teams, including the Los Angeles Lakers and Kings, that are also part of the auction. New owners will be subject to approval by respective leagues. And, if Liberty Media is a member of a winning consortium, it’s likely to be subjected to antitrust review.

Blackstone reportedly plans to keep a tight lid on how consortiums are formed and information is shared to prevent any lowballing, and will seek league approvals from the NHL and NBA for team ownership transfers once bidding reaches the second round.