Kroenke: Crazy enough to move Rams to L.A. over NFL’s dead body, or just crazy enough to make you think he is?

You know, maybe I’ve been looking at this whole Stan Kroenke moving the St. Louis Rams thing to Los Angeles the wrong way. I’ve been figuring that since building a billion-dollar-or-more stadium on his own dime in Inglewood seems crazy, when the benefits of playing in L.A. are limited by the NFL’s everybody-gets-an-equal-cut-regardless TV deal, Kroenke is more likely using this as leverage to try to extract a better stadium offer from St. Louis. But what if this is a sign that Kroenke is actually crazy, one of those billionaires who decides that he wants to own a team where he wants to own one, dad-gum it, and nobody is going to tell him he can’t, not even his own accountants?

We’ve seen it before, certainly. And as an additional data point in favor of the madman theory, we have yesterday’s report by NBC Sports’ Mike Florio that, according to “a source with knowledge of the current dynamics in Southern California,” Kroenke plans on moving to L.A. even if he can’t get the approval of the NFL:

According to the source, Kroenke has informed the mayor of Inglewood on multiple occasions that he’ll move the team with or without the approval of the other clubs.

That would be an aggressive, risky move. If Kroenke moves without approval, he’d be entitled to no financial assistance from the league, and his stadium would be blocked from hosting Super Bowls.  He also would avoid paying the relocation fee.

The matter could end up in court, as a sequel to the barrister’s brouhaha between the Raiders and the NFL in the 1980s, arising from the league’s efforts to keep the Raiders from moving to Los Angeles.  The Raiders eventually won a $34.6-million judgment, which reportedly was settled for a payment of $18 million in 1989.

Obviously, we need to consider the source: Florio has a bit of a record of passing along wild rumors, and by his own description this isn’t much more than hearsay — a guy who knows people says he heard that the mayor of Inglewood says Kroenke told him this. Still, it’s a scenario that we haven’t considered before, and just maybe the lure of getting out of paying the NFL a relocation fee would be enough to risk a lawsuit and having everyone else in the room hate him at owners meetings. If you’re, you know, crazy.

The counterargument is that all signs are that Kroenke isn’t actually a lone nut type of billionaire, but a pretty buttoned-down kind of guy who also owns the Denver Nuggets and a majority share of Arsenal. (Where he was interested enough in making money that he paid himself a $4.5 million dividend even when he knew it would anger fans.) And none other than Marc Ganis, the NFL consultant and consummate league insider, tells USA Today that Kroenke isn’t the kind of guy to go wildly into an L.A. stadium deal before he gets league approval of a team being allowed to play there:

“I’ve known Stan for years, and Stan is a measured, deliberate person who makes very good business decisions, often using patience to do so,” Ganis said. “If he says he’s just going to build it himself and take the league on in court, what have you done? You’ve built a stadium, and you possibly lose in court and you’re out a billion and a half dollars? That’s not a rational way to go about it, and Stan is very rational man.”

Of course, because Ganis is so tight with the league, it’s always possible this is a league talking point: No way Stan does this without asking us first, he’s always been a good boy. It’s a world of unreliable narrators right now, which is enough to drive you … crazy.


16 comments on “Kroenke: Crazy enough to move Rams to L.A. over NFL’s dead body, or just crazy enough to make you think he is?

  1. “That would be an aggressive, risky move. If Kroenke moves without approval, he’d be entitled to no financial assistance from the league, and his stadium would be blocked from hosting Super Bowls. He also would avoid paying the relocation fee.”

    Maybe I’m crazy (heh), but given that the relocation fee will cost a better part of his own personal fortune — on top of whatever money he’d be throwing in toward the stadium — I’d almost say forfeiting the right to financial aid, never mind the privilege of hosting Super Bowls, would be a reasonable trade-off for him.

  2. I doubt it Kroenke is crazy. As the saying goes like a fox. Kroenke’s move to build a new stadium in LA is a move with a calculated outcome. From a rational point of view, he removed the impediment to move to LA for all the team vying to get there. He also makes his threat to move credible to the STL community. Secondly, if he moves are not; he gets a new stadium. Lastly, if he stays in STL the downside of the new stadium in LA is to sale or lease it the Oakland or San Diego, Smart move to position his payoff for a new stadium regardless of the outcome.

  3. I have been wondering, since moving the Rams to L.A. would make the franchise somehow instantly worth $1 billion (or does it?), then spends $1 billion on a stadium, then down the line sells the team for $2B-$3B for a $1B-$2B profit.
    How much money does hosting the Super Bowl really generate for an owner (if any at all), and how much money (if moved to L.A. accordingly to the NFL wishes) would the NFL loan for a stadium? $200M? $300M?

  4. I wonder if Stan likes being an owner. He doesn’t seem crazy and he seems to love developing more than owning a team. Stan could see the NFL doesn’t want any one person to own L.A. The NFL wants a big chunk of L.A. Except the NFL can’t convince Spanos, Davis or even Kroenke to agree to NFL’s terms.

    I believe that Stan is going to build his stadium with or without the Rams in tow. It’s going to be a multi-use stadium with soccer (LAFC?), bowl games, concerts, festivals, Final-Four, and perhaps UCLA. Why not sell the Rams for $1.5 billion, use it to build his stadium and sit back and see if the NFL can build one. The cities of San Diego and Oakland are not going to spend one red dime for Spanos or Davis. The NFL’s Hall of Fame West or NFL Network expansion would have been perfect in Inglewood. Shame that the NFL could not see that Stan had the best plan. But it’s not too late from Stan’s perspective.

  5. Vern: I would say that the chances of Kroenke building a stadium without a team ready to move into it are somewhere around zero. As the USA Today article linked above notes, he’s not going to do this on spec.

    mp34: I doubt an owner gets that much from a Super Bowl, since pretty much all the revenue goes to the league. As for how much the NFL would loan (really grant, because it can be paid back with other people’s money), that’s entirely up to the NFL — could be $200 million, could be zero.

    Todd: For a guy who doesn’t like being a sports owner, he sure owns a lot of sports teams. And what do you mean by “The NFL wants a big chunk of L.A.”?

    Finally, the idea of selling the team and using the proceeds to build a stadium (or building a stadium and then hoping the Chargers or Raiders want to pay you lots of rent to play in it) is nuts. Nobody makes money on owning stadiums. Or to put it another way: If Kroenke wanted to keep so much of the stadium revenues that he’d make money on just the stadium, then nobody would want to play there.

  6. “I’ve been figuring that since building a billion-dollar-or-more stadium on his own dime in Inglewood seems crazy, when the benefits of playing in L.A. are limited by the NFL’s everybody-gets-an-equal-cut-regardless TV deal…”

    I disagree with this thought. Stan is partnering with a group so it’s not all his cheddar. Building the stadium increases the franchise value and moving to LA gives him more marketing and licensing dollars. The Rams raise the value of whatever stake he has in the development as a whole, and I’m sure that equity percentage is based in no small part on the Rams raising the value of the entire project. in other words the profit potential is exponential. i don’t think you’re crazy to take that deal. You’d be crazy not to take it.

  7. I disagree somewhat about whether an entity can make money on stadiums. AEG makes money on Staples from the Lakers and Clippers. Granted, AEG makes most of their income from ancillary income rather than directly related to their venues and ownership of teams. That’s what Kroenke can do from the new complex in Inglewood. Eventually, he would expect a football team, but would he need a team to get his complex going?

    Kroenke does have a lot teams. I’m used to owners who to need to be on tv rather than Silent Stan.

  8. More unnamed, high-ranking sources:

    “There are reasons to be hopeful, as fading as they might be.

    The first is that Kroenke went off the ranch on this one, pulled an end-around on the NFL and brokered a deal independent of the league’s carefully crafted wishes.

    And that the NFL will ultimately vote down Kroenke’s request for relocation, should it come to that.

    But after talking to a high-ranking official Tuesday, it appears that isn’t the case.

    In fact, the NFL appears on board with what Kroenke is doing.

    The second is that Kroenke — and the NFL — is simply using the threat of Los Angeles to motivate St. Louis leaders into building a new stadium that will keep the Rams along the banks of the Mississippi River.

    Or, as another NFL official told me: “This is a bidding war.”

    And that would make Kroenke’s bombshell especially well timed.”

    “http://www.dailynews.com/sports/20150106/farmers-field-could-go-way-of-other-la-stadium-plans”

    Maybe the NFL is just putting on an elaborate show and the fix is in. Do enough to keep the fishes, cough-cities-cough, on the hook.

  9. Unreliable narrators are what butters our bread. The game’s afoot, and the outcome will be another win for the NFL. No one bluffs at high stakes like we do. Of course it helps that sitting across the table from us in most cases are for-sale pols and assorted local nitwits, hehe.

    I love the smell of public stadium cash in the morning!

  10. This is an interesting question. Is he, or isn’t he? Will he, or won’t he? It need not be said that it has nothing to do with fan loyalty. OK, here goes: Billionaires don’t like to be in corrals; the NFL is a corral. OK, don’t OK, I’m moving my team to whichever city I want. The city I want has fourteen million folks in the metropolitan area. Maybe it’s worth it to build a new stadium on spec, maybe not. My instinct is, is. What else? How about this? Instead of sharing the wealth from the LA media market with the Clevelands and Jacksonvilles of the league, what if Stan sued the NFL for his rightful Los Angeles share? He might, in fact, threaten (ever so nicely, of course) to do that very thing if the league doesn’t pat his butt gently and with reverence as he prances out of STL. Then he’s got LA, the league’s got its museum and West Coast HQ and STL is free to go out and steal another city’s team (good luck with that). Still, I had to wonder why when it was leaked that Stan had bought his sixty acres, and now Stan’s partner announces the new stadium deal days before STL returns to the table with yet another maybe proposal. I just get the vapors!

  11. @ Todd: Staples Center has three tenants and is the main concert venue for the 2nd largest municipal area in the country.

    A private football stadium would 10 games a year. Throw in a bowl game, a monster truck show, and a couple of other events, it’s used 20 times a year, 30 max. It can’t make money.

  12. All things being equal, the NFL (and other 31 team owners) would much rather have a franchise in LA instead of St. Louis. On the other side of the ledger, the last thing the NFL and other owners want to see happen is for another owner to pay 100% cost of a new stadium.

  13. “All things being equal, the NFL (and other 31 team owners) would much rather have a franchise in LA instead of St. Louis.”

    Why do you say that, Scott?

  14. We’d much rather keep using L.A. as leverage to extort public stadium cash from cities across the land, if you must know. But part of our charm is that people constantly confuse our rhetoric for reality, as what we say and what we do are often vastly different things. There are already people here spinning tales about what Stan the Man will do – Sue the NFL! Move when and where he wants! Rewrite the league financial split! Poop a 1.5 billion dollar palace out of his pants and turn a profit on it!

    Why, he sounds like a 2014 version of renegade Al Davis battling Pete Rozell, lol. Hardly the case if you know anything about Stan, or how us velvet gloved Club of 32 members do business as a “not-for-profit” leviathan. It’s just that when you’ve run the same bluff so many times, it helps to freshen up the con. A few props like a piece of land in L.A. and a drawing of a stadium are de rigueur at this point. Otherwise some journalist might take time out from puffing our plans and actually question them… ewww, ick!

    But it’s all good — us NFL billionaires will outwit the public and the pols once again, as surely as the sun rises in the east. As Jackie Gleason used to say, “How sweeeet it is!”

  15. He’s not called “Silent Stan” for nothing. He’s a God-awful owner. He claims in the paper here (I live in Denver where he owns NHL, NBA, MLS ) that his goal every year is to have all of his teams “playoff capable.” Whereas real owners like Mark Cuban are trying to win titles. Oh well. The Rams play in a stadium that was outmoded the day it opened. I hate when they are on television, playing at home. It’s dark in the Edward Jones Dome. Lifeless. Like watching a game in a tomb. This makes me dislike Kroenke even more though. He’ll move one of my teams’ too. One of my 37-45 teams. Come on, he’s a Missouri-guy for crying out loud. How much money do you need?

  16. Bingo, Piggy.

    The will-he won’t-he thing IS the con, it’s not an intriguing question we need to agonize over. It’s heads he wins tails you lose, taxpayers.

    If I were a betting man (I’m not), I’d say his priority is to get the most possible money out of St. Louis (or Mo). The NFL wants that too, after all, you can’t keep fleecing people in nowheresville with visions of what an NFL stadium in LA (for their current team) might look like after someone goes and actually builds one… When you know how the magic trick is done, it ain’t magic anymore.

    If the deal isn’t gold plated enough for Kroenke (and the league) in St. Louis, they’ll look elsewhere… which might be the site in LA, or might be something else entirely in another city. Maybe someone else will race in at the last minute offering even more… there is no deadline when people are piling their cash on the table for you.

    If the good folk of St. Louis cough up so much money out of their property tax, education, policing, firefighting, school lunch and healthcare budgets (and lets not forget squeezing pensions of retired public servants, right Roger?) that the NFL does not have the moral courage to refuse to take it, well, hallelujah, St. Louis has saved the Rams… which were never in any danger anyway, btw.