Phil Anschutz

The Miracle Worker

Born in 1939 in the boomtown of Great Bend, Kansas, Anschutz grew up in a world where roughnecks in khaki shirts drilled for black gold and the Santa Fe Railway's streamlined Super Chief streaked past on the nearby mainline. And he carried a hardheaded yet oddly romantic image of American industry into adulthood: Even though he's so tight with a buck that he refuses to buy new cars--state records show the only vehicles registered in his name are a 1990 Chevy pickup and an accompanying trailer--he continues to run the Ski Train to Winter Park, preserving a popular local tradition despite the fact that the service loses money.

Anschutz learned the art of financial high-wire walking from his father, who was known for diving into deals no one else wanted to touch. Fred made and lost several fortunes before Phil came of age, but it was only with his son's help that he delivered his masterstroke. Working on a hunch, Fred and his boy purchased a large tract of land in Utah that turned out to be bursting with oil and gas reserves. Following a bit of prescient stubbornness on Phil's part, the deal hit the stratosphere. The younger Anschutz resisted a 1978 offer from Amoco for the Utah fields, holding out until 1982, when he was able to sell a half-interest in the property to Mobil for $500 million. At about the same time, he unloaded other interests for another $500 million. He picked up a cool billion almost overnight, and in the process insulated himself from the 1980s oil crash.

While many of Denver's high-rollers were propping up dubious condominium projects with handshake loans from savings and loans, Anschutz was perfecting a much more lucrative type of real estate deal. In 1984 he shocked the investment community by paying nearly half a billion for the Rio Grande, picking up the small but efficient line at a time when most analysts viewed railroads as dinosaurs on wheels. Four years later he made an even more unexpected gamble, forking over $1.8 billion--including $90 million of his own money--to gain control of the Southern Pacific, a cash-sucking octopus whose most tempting assets were its vast California land holdings.

The Southern Pacific had counted on bailing itself out by merging with the profitable Santa Fe. But the aborted red-and-yellow "SP-SF" paint schemes still occasionally seen on passing locomotives stand as a testament to the mild-mannered Anschutz's ability to play rough; as the owner of the Rio Grande, he helped derail the Santa Fe's purchase of the SP, only to later snag the storied Sunset Route for himself.

It wasn't the first time Anschutz had foiled the Santa Fe: At the age of 27, he talked his way into a meeting with the railroad's chairman and arranged to buy more than eighty of the Western paintings the railroad had commissioned for its travel posters. Railroad executives had stowed the works away in the basement to gather dust, oblivious to their growing value on the art market, and Anschutz got them for a song.

In keeping with his reputation as a modern master, Anschutz slowly brought the "Sufferin' Pacific" back to respectability. Eschewing the slash-and-burn management purges that so often follow leveraged buyouts, he left experienced SP executives at the controls while he propped up the company with cash infusions and concentrated on the big picture. In 1996, having timed the national mania for railroad mergers perfectly, Anschutz sold out to the Union Pacific, pocketing a $1.4 billion profit and retaining a 5.4 percent stake in the nation's largest railroad.

Of course, before he unloaded the SP, Anschutz played all the available angles. He realized the potential presented by the railroad's thousands of miles of right-of-way and put $55 million of his own money into a subsidiary called SP Telecom, which began laying fiber-optic cable along the railroad corridor. Since renamed Qwest, the communications company is shaping up as Anschutz's biggest deal yet. It will soon rival Sprint in size and has signed contracts worth more than $1 billion with clients eager to avoid traffic jams on the Internet.

Today Anschutz spends much of his time working on his latest megaprojects in California: a $300 million downtown arena for his Los Angeles Kings hockey team and the basketball Lakers, and a crude-oil pipeline he's building south from Santa Barbara on the old SP right-of-way. But Anschutz won't ever leave Denver for good. The latest reminder of his continued presence is the giant neon sign that now adorns his headquarters in the old Anaconda Tower building on 17th Street. Visible for miles on a clear night, the sign advertises Qwest's arrival as a force to be reckoned with on the local scene.

Anschutz can get a good look at the sign on his frequent flights in and out of Denver. Unlike the angry red glare he saw thirty years ago over Wyoming, this time his light in the sky is a cool blue glow.

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