- The Washington Times - Friday, February 16, 2001

D.C. United thinks the black cloud hovering over the team since the summer of 1998 is finally gone.

The soccer club yesterday concluded an arduous ownership search that lasted nearly three years by signing a deal with Colorado billionaire Philip Anschutz, who will take over the operating rights to United.

Anschutz's entry, first reported last month in The Washington Times, gives him total authority over all team operations, though Kevin Payne will remain as general manager.

Anschutz, also the operator of the Chicago Fire, Los Angeles Galaxy and Colorado Rapids, now controls a third of the 12-team MLS through his L.A.-based Anschutz Entertainment Group (AEG).

Operations were bare bones while the team searched for an owner. United now gains the ability to pursue a new soccer-specific stadium, likely adjacent to RFK Stadium; sign long-term marketing deals; and seek a new office and training complex. Fearing a new owner would seek a different direction, team officials have not done any of that since the previous ownership group, Washington Soccer L.P., announced its intent to sell.

"We're very excited this day has finally come," Payne said. "It's been a difficult path to solidify our ownership situation and map out our future. We can now look ahead."

The United deal resembles one MLS announced last month for the San Jose Earthquakes. After months of difficulty finding new investors for the club, the league transferred San Jose's operating rights to George and Gordon Gund, owners of the NHL's San Jose Sharks. If all goes well, the Gunds will at a later date buy equity in Major League Soccer. In the league's single-entity system, investors buy into the league as a whole and hold franchise operating rights on a local level.

Similarly, AEG now holds United's operating rights and an option to buy MLS shares formerly held by Washington Soccer L.P. The league took over those shares last year after growing impatient with the lagging sales effort and the group's refusal to inject more money into United.

AEG senior vice president Bill Peterson, to whom Payne now directly reports, said Anschutz plans to exercise the option within the next year.

MLS gave United's operating rights to Anschutz for free, but he now assumes financial responsibility for a team that has lost at least $1 million a year since its 1996 inception. United has won three MLS titles but sagged to the league's second-worst record in 2000.

MLS commissioner Don Garber acknowledged that the San Jose and D.C. operating rights transfers stem from the league's marked inability to find new investors. Aside from the Gunds, no investor has joined MLS since 1997, and franchises in Tampa and Dallas have never had local operators.

"We certainly would have preferred to have a new investor," Garber said. "But with nothing happening in the past 18 months or seemingly in the immediate future, this was an effective way to move these franchises forward. This is a half-step toward what we hope is a full step."

New York investment firm E.M. Warburg Pincus & Co. LLC came close to buying United in 1999 and several times last year. But Warburg Pincus' insistence on a long due diligence process slowed progress. When Douglas Karp, a Warburg Pincus partner and the firm's major proponent of the deal, left the company last summer, the proposed $25 million sale died.

Despite Anschutz's now massive involvement with nearly every facet of MLS, an estimated $18 billion net worth and ownership of the NHL's Los Angeles Kings, he remains a mystery to most soccer fans. Anschutz, chairman of telecom giant Qwest Communications, makes very few public appearances and has not spoken to the media in more than a quarter century. Garber insisted Anschutz's reclusiveness will not be a detriment to league marketing, even when compared to high-profile fellow investors Lamar Hunt and Robert Kraft.

"We tend to talk too much about the business of the sport, I think, and too little time talking about the competition," Garber said. "I believe our fans don't get hung up about the individual owners."

Garber yesterday was forced to fend off criticisms that one owner controlling a third of the league, as Anschutz now does, is not a healthy situation.

"To the soccer fan, I would say that there has not been one conflict over players among our teams. Our checks and balances are in place," Garber said. "To the general sports fan, I would say that each of our teams are in essence separate companies owned in some cases by one individual. Other single-entity leagues have similar setups, and we're quite frankly in a different stage in our life cycle than the more established leagues."

Payne and Bobby Goldwater, executive director of the D.C. Sports Commission, both said ongoing talks to build a soccer-only stadium on RFK land remain preliminary. But those discussions are expected to progress quickly in the next few weeks now that Anschutz's long-expected arrival is official. Both parties seek to have a new stadium in place by 2003.

"We intend to build no less than the best soccer facility in the country," said Goldwater, who formerly was general manager for Staples Center in Los Angeles, also co-owned by Anschutz.

Garber yesterday declared the book closed on Washington Soccer L.P., a group that never intended be a long-term investor in the league and beset by infighting from the start. Washington Soccer has been paid for its shares, Garber said, declining to specify the amount. But some bitterness lingers among the former owners.

"This deal is great for the team, for the city and for the league," said Neil Tyra, a minority investor with Washington Soccer. "Phil Anschutz is totally committed to soccer and is a very valuable person to have on your side. As for me personally, this is not exactly what I was looking for. It remains to be seen whether my contributions to the organization are recognized."

Tyra declined to elaborate, citing confidentiality provisions within MLS' takeover agreement.

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