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MLS News
QWEST COLLAPSE HITS MLS FINANCIER
07/07/02 by Jeff
Dieffenbach
The name of a company coupled with the
phrase “accounting irregularities” sends shivers up the spine of
CEOs and investors alike. The name Qwest, similarly associated, may
now be affecting a certain MLS financier in the same
way.
Philip Anschutz, owner of 5 of the 10 Major League
Soccer clubs—the Galaxy, Rapids, Fire, United, and MetroStars—a
founding investor in the league, and perhaps its most important
benefactor, also owns nearly 20% of Qwest Communications
International.
Even without Saturday morning’s AP report that
Qwest hotly denies being under investigation by the Justice
Department, the company finds its stock price at $1.82, down from
its 52 week high of $31.45 a year ago and over $60 two and a half
years ago.
Qwest, which provides broadband data, voice, and
image communications for businesses and consumers, rode the Internet
boom and then bust.
The AP story quotes Analyst Drake
Johnstone of Davenport & Co.: ''I think there is a potential
risk of bankruptcy.''
Johnstone goes on to note that top
executives and shareholders had been selling large quantities of
stock while at the same time talking up Qwest’s growth rate in the
telecommunications industry.
So, as Qwest goes, so goes Mr.
Anschutz, and maybe MLS? Probably not.
Despite a sizable $550
million stake in Qwest, Forbes.com puts Mr. Anschutz’s 2001 net
worth at nearly $10 billion (albeit down from $18 billion in 2000).
As a result, he dropped out of the list of the top ten richest
Americans, falling from 6th to 16th.
Nonetheless, his
holdings remain diversified. In addition to telecommunications
(Qwest), they include transportation (Union Pacific Corporation),
oil and gas (Forest Oil, Pacific Energy Group), sports and
entertainment (the four aforementioned MLS clubs, the NHL’s Los
Angeles Kings, the Staples Center in Los Angeles, Regal Cinemas,
United Artists Theatre Circuit), and agriculture.
In short,
Mr. Anschutz appears well poised to weather the Qwest storm. And a
sunny day for Mr. Anschutz is a sunny day for Major League Soccer.
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