Phil Anschutz

The Miracle Worker

One night in 1968, a 29-year-old Phil Anschutz sat in the bar of the Casper, Wyoming, airport cutting the biggest deal of his life with an oil wildcatter named Jeff Hawks. Outside, in the direction of Gillette, the sky was on fire, the result of an inferno that had erupted after a well being drilled by Anschutz's struggling company blew out, sending a gusher of oil arcing over the snow-covered fields. Inside, Hawks, who had a reputation for being able to drink like a fish with no visible effects, was ordering round after round of straight whiskey and dickering with the outwardly calm but inwardly desperate oilman across the table.

As Anschutz would recall in a rare interview with the Colorado Historical Society in 1974, his then-three-year-old company had almost no money and stood to be bankrupt within the week if he couldn't figure out a way to salvage something--anything--of value from the fire. The two drilling experts he'd taken along to back him up weren't much help. "Both of my experts by 10:30 were so drunk they could hardly say their names," he said.

But unlike his hard-living father, a maverick oilman who likely would have joined Hawks and the gang in knocking back a few shots, Phil was a fastidious young man who left little to chance. During his negotiations with Hawks, he displayed a coolness under pressure that would serve him well in the coming decades. By 1 a.m., Anschutz had agreed to assume all of Hawks's liability for the flaming well--which by then was a lawsuit waiting to happen. In return, Anschutz got an additional interest in whatever oil might be left if the fire could be put out.

Having completed the transaction by scrawling the terms of the contract on a tablecloth, Anschutz loaded his inebriated crewmen into his rented plane and headed back to Denver. As the plane took off, he looked toward Gillette and saw the eerie red light cast by flaming oil that was still shooting hundreds of feet into the air. "My God, this is the end," he recalled thinking. "I'll never be able to overcome all this."

Where others might have seen only doom in the night sky, however, Anschutz glimpsed opportunity. As soon as he got back to his apartment, he hired legendary oil-fire fighter Red Adair to fly in from Houston and put out the blaze, paying him with cash he raised by selling off the interest he'd just wrangled from Hawks. Then, remembering that Universal Studios was making a movie about Adair's exploits, he called Hollywood and convinced the studio to pay him $100,000 for the rights to film the blaze. As a result, the fire that could have ruined Anschutz was immortalized in the John Wayne epic Hellfighters. Anschutz went on to cap the well, put out the fire and make his first million.

Anschutz later described the Gillette fire as the defining moment in his business career. "There's always a point that if you go forward, you win--sometimes you win it all--and if you go back, you lose everything, and that was that point for me," he said in the 1974 interview. "You don't learn that in school. You have to have the initiative, be able to be pragmatic and tenacious, seeing all of the opportunity that could exist." And, he added, you have to "work like hell and not worry about what people think of you."

The soft-spoken Anschutz has since parlayed that philosophy into a net worth that now hovers near $7 billion. Along the way, he's developed a magician's sense of timing when it comes to buying and selling the pieces of a sprawling empire that ranges from oil and gas leases to agricultural interests and professional sports teams.

Anschutz has been the largest owner of Colorado real estate as well as the state's biggest farmer. He has dabbled with downtown skyscrapers--he picked up his latest, the Tabor Center, for $123 million in 1994--and bought and sold the capital city's hometown railroad, the beloved Denver & Rio Grande Western. For years he has used the spur tracks at Denver's magnificent Union Station as a personal parking lot for the luxury railcars in which he likes to entertain politicians and other guests.

Personally and politically, he's as conservative as his wildcatting father, Fred Anschutz, was colorful. Phil married his high-school sweetheart, got a business degree from the University of Kansas and by his late twenties was already showing up at the office at 6:30 a.m. and religiously putting in "at least two hours in the evenings and on weekends." His work ethic has only grown more severe over time. His days now begin at 4:30 a.m. and include ten-mile training runs in preparation for the marathons he likes to run with his three children. He lives in a mansion in the Polo Club, and his only known vice other than his abiding passion for Western art is an occasional beer over cracked ice. In 1993 he contributed $100,000 to Bob Dole's Republican think tank; a year earlier, he quietly gave $10,000 to the backers of anti-gay-rights Amendment 2.

"I certainly did not have the image of a playboy or something like that," he said in 1974, referring to his position as a young capitalist during the socially turbulent 1960s. Instead, having knocked around the Kansas and Wyoming oilfields with his father as a boy, he was already addicted to a different sort of adrenaline rush.

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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