United Is Back On the Market
Wednesday, January 18, 2006
Six months after announcing its operating rights had been sold for an MLS-record amount, D.C. United is going back on the market. Global Development Partners, a real estate firm founded by Northern Virginia executives Willi Lauterbach and Timothy Kissler, has withdrawn from an agreement that had been trumpeted as the most lucrative in league history, an estimated $26 million.
Anschutz Entertainment Group (AEG), which has operated United since 2001, will continue to run the club until a new buyer is found.
"It was a mutual decision," United President Kevin Payne said yesterday. "There were concerns on both sides that this probably was not ultimately going to be the right fit for anybody."
Global officials did not respond to interview requests, but the firm issued a statement yesterday afternoon:
"While we feel that D.C United represents an exciting investment opportunity, Global Development Partners LLC and AEG have amicably agreed to terminate the sales contract for the team. We look forward to continued dialogue with D.C. United, and with the neighborhoods of Ward 8, to serve the city's goal of a revitalized community east of the river."
Under terms of the sale, announced with much fanfare last July, AEG was to continue operating United until the deal was finalized early this year. The terms also made the purchase agreement "binding on both parties."
However, Payne said yesterday that Global's initial payments have been returned in full. "The entire deal has essentially been vacated," he said. From a financial standpoint, "it was basically unwound."
Despite losing interest in United's rights, Global apparently plans to continue pursuing a partnership with the team and the city on a mixed-use development project at Poplar Point in Anacostia that would include a 27,000-seat soccer stadium.
Mark H. Tuohey, head of the D.C. Sports and Entertainment Commission, said he doesn't believe Global's decision concerning the team will affect the stadium plans.
"I don't think it's going to impact our coalition," he said. "We're going to continue to work with the city and the D.C. United group under Kevin Payne's leadership."
Said Payne: "There is no question D.C. United will continue to aggressively pursue a stadium opportunity as a basis for a large, mixed-use development at Poplar Point, and we continue to talk to Global about that."
Besides the United stadium plan, Global has been aggressively pursuing other sports development projects around the country. A proposal involving the Richmond Braves minor league baseball team collapsed last month and a plan for Florida Atlantic University's athletic village in Boca Raton was turned down last week in favor of a competing firm's bid.
Baker Sadi, a high-ranking Global executive based in London, declined to discuss United or the District stadium plan, referring all questions to the company's Georgetown offices. Lauterbach didn't return an e-mail request for an interview and Kissler wasn't made available for comment.
AEG, owned by Colorado billionaire Philip Anschutz, stepped in on short notice to take over United's operations in 2001 when the team's previous investment team, Washington Soccer LP, broke up. A year earlier, Washington Soccer LP's proposed sale of United's rights to Warburg Pincus, a New York investment banking firm, collapsed unexpectedly.
In MLS, individuals or groups invest in the league as a whole and then are awarded operating rights to a team. AEG runs five of MLS's 12 clubs, while Kansas City Chiefs owner Lamar Hunt operates three. New England Patriots owner Robert Kraft, former NBA executive Dave Checketts, Denver Nuggets and Colorado Avalanche owner Stan Kroenke, and Mexican entrepreneur Jorge Vergara oversee the other MLS teams.
As for finding a new buyer for United, Payne said: "We have had, and are having, conversations with a number of entities. . . . We're confident we will find the right buyer, and at the right price, in a relatively short period of time."
AEG spokesman Michael Roth didn't respond to a phone message seeking comment. An MLS spokesman said Commissioner Don Garber would defer to Payne for comments on the matter.