Rams call St. Louis’ $477m stadium subsidy offer “road to financial ruin,” and other NFL-to-LA news

The latest developments in the ongoing NFL-to-L.A. trainwreck:

Let’s focus in on that Rams relocation application, which has been garnering lots of headlines, albeit not many with quite as memorable an image as Deadspin’s. This, it’s important to remember, is the equivalent of a lawyer’s closing statement: You want to throw every argument you can at the jury to make your case, even if you know the reality isn’t so black and white. So it’s entirely possible that Stan Kroenke doesn’t hate St. Louis quite that strongly in real life, but if he admitted that it’s anything less than a hellhole, he’s risking leaving some other NFL owners with reasonable doubt about his need to move to Inglewood.

But! There is one other factor here, which is that Kroenke chose to release this to the public, rather than just submitting it in secrecy to the league like the owners of the San Diego Chargers and Oakland Raiders did. This seems a pretty clear example of public bridge-burning, and the most concrete evidence we have yet that Kroenke wants to go to L.A. by any means necessary, and at any cost.

If so, the whole L.A. chase starts to fall into a bit clearer focus: Kroenke, for whatever reasons lie deep in his billionaire lizard brain, desperately wants to be the owner of the Los Angeles Rams rather than the St. Louis Rams, even if it means putting down around $1.5 billion for a stadium. (Discounting his infrastructure tax rebates and NFL G-4 money here.) Chargers owner Dean Spanos, not wanting to have to play second fiddle in SoCal for all eternity, jumps in with his own offer. Raiders owner Mark Davis, getting nowhere at anything, happily agrees to jump on board Spanos’s bandwagon. The other NFL owners, sensing an opportunity, decide to demand a crazy-high relocation fee, because you don’t get if you don’t ask, right? At which point it becomes like one of those Cutthroat Kitchen bidding wars where nobody wants to back down for fear of being the one left out in cold, and suddenly you find you’ve just spent $15,000 on a cup of soy sauce.

That’s my leading theory right now, anyway. As to who’ll end up the “winner” and who’ll end up having to build a new stadium in their existing city while wearing a suit of armor, your guess is as good as mine.


52 comments on “Rams call St. Louis’ $477m stadium subsidy offer “road to financial ruin,” and other NFL-to-LA news

  1. And the operating assumption is that the Chargers’ and Raiders’ owners said similarly disdainful things to say about their own markets in their applications…

    Good luck to whichever team(s) end up missing out on LA, because they pretty much napalmed every bridge between themselves and their home markets.

  2. While I tend to agree that St. Louis probably shouldn’t be counted among the ranks of three-team cities, one of the Deadspin commenters pointed out that the application only counts the actual city and appears to ignore the fact that St. Louis has suburbs with people who actually do spend money.

    If Kroenke, clearly one of the worst owners in sports, is correct–then the “good feelings” and “civic pride” as well as the natural economic “spillover effect” that resulted from the Super Bowl win don’t appear to have much impact on the neighborhood or the metro area as well. This irony seems to be lost on most.

  3. Not in so many words, the 49ers said similar things about demands placed by city officials from San Francisco for a new stadium at Hunters Point. Of course, those items were proven to be irrelevant as the main issue was the Yorks not wanting to spend their own money for a new stadium. Kudos to San Francisco for not caving into their demands. Santa Clara became the overnight fool.

  4. GDub: Actually St Louis’ suburbs are struggling. This one called Ferguson made a lot of news last year.

    By any objective measure St Louis is a pretty struggling town. I think most people in and around St Louis know that.

    I doubt Kroenke’s leaked document will be long remembered. Most likely six weeks from now either the Rams will still be in St Louis and no one will remember some obscure NFL proposal or the Rams will be in LA and everyone will only remember the move itself.

  5. Aqib: I’ve only been to St Louis twice. I actually thought it had some great old buildings though the scars of failed urban renewal schemes were especially evident.

    That said, St Louis’ population as of 2010 is down 62.7% from its peak in 1950. In contrast Detroit is down 61.4%, Youngstown OH 60.6%, Cleveland 56.6%, Gary IN 55%, Pittsburgh 54.8% and Buffalo 53.4%. That’s not a list of cities you want to be on, let alone leading.

  6. St. Louis no doubt overall is struggling compared with its mid-20th century peak–as are many midwestern cities that have lost their manufacturing base. Like many cities, it also has suburbs (such as Ferguson) that have suffered with the city core.

    However, St. Louis has a strong corporate presence for a city of its size and it has western suburbs that are doing pretty well.

    Comparing population of city centers can be misleading. Because these cities no longer have large industrial enterprises, there isn’t as much reason to live in the city center–but the population of the MSA has actually increased significantly since 1950. Comparing St. Louis with, for example, Gary isn’t very productive in that sense.

    St. Louis has a nice downtown that is really in no way enhanced by having a football stadium there.

  7. Stan Kroenke just committed federal slander charges IMO. There is no way the NFL will allow anybody to move until after the trial. So he doesn’t like St. Louis. If that is the reason, why in the hell did he buy the team in the first place? If anything, the NFL should be sued by the City of St. Louis for the league’s refusal for Rush Limbaugh to buy the team. In fact, after I get done here, I am going over to their website to suggest the city file the lawsuit.

  8. Correct me if I’m wrong, but the proposed stadium is in a desolate stretch along the river, cut off from the rest of the city. That’s those freeways and urban renewal I mentioned.

    Objectively, St Louis is in a category of struggling Midwestern rust belt cities like Detroit, Cleveland, Pittsburgh and Buffalo, though by looking at the numbers, it’s a bit worse than the others.

    Yes, the St Louis metro area has grown but since 1950 it’s only grown at about a third of the rate of, say, a Twin Cities metro, and since the last census it’s more like 5-6X.

    Yes, I’m sure “St. Louis has a strong corporate presence for a city of its size” but that’s the point: It’s size isn’t what it once was. In 1950, St Louis was the 8th largest city in the US. At one point (1910) it was the 4th largest city in the US. Today it is the 60th largest city in the US and the 19th largest MSA.

    St Louis is struggling and has been struggling for a long time.

  9. It’s important to keep in mind that St. Louis is an independent city (like Baltimore, D.C., and Carson City, NV) and cannot annex anything into adjoining St. Louis County. So most metrics which measure a city make it look a lot worse than if it had annexed a bunch of land around it (like Memphis and Columbus) or merged its government into a county (like Indianapolis or Nashville).

    There is talk of merging the city-county but likely won’t happen.

  10. Too bad St. Louis didn’t spend big bucks on a football stadium a couple decades ago. That kinda thing really could have revitalized the economy and prevented all these struggles they are having now!

  11. Scola: keep in mind the Midwest is more prone to sprawl than other parts of the country. I live in the Cleveland area. Its so easy to get around that people think nothing of a 25 mile commute to work. In fact native Clevelanders (I’m a transplant) quote distances in minutes not miles. “how far is your drive?” “about 20 minutes”. So while the cities themselves have lost population a good chunk of that (not all obviously) went to suburbia in a lot of cases. Like the county just south of Cleveland has tripled in population over the last 20 years.

    St Louis is still 13th in Fortune 500 HQs so its not a place where a team isn’t viable. Also, whatever problems St Louis has didn’t emerge in the last 6 years. If Kroenke thought that a St Louis based NFL team would be “on the road to ruin” he should have just let Shahid Kahn buy the team.

  12. Agree, ChiGuy wins.

    Jim: Agree, but outside of the South and a few city-county consolidations most cities in practice haven’t physically grown over that time period. Some like San Francisco and New York City have their own county-line restrictions, others like Boston, Chicago, Minneapolis, Chicago, Seattle, etc. just simply haven’t made major annexations for a century or more. None have experienced the massive population loss of St Louis and many have grown, some significantly.

  13. That is so true ChiGuy.

    Seems to me the Rams and Chargers move in together in LA. Then the Raiders move in with the 49ers. And the television spectacle and luxury stadium experience that is the NFL roars on at the most efficient cost.

  14. Aqib: When you’re comparing to Cleveland when talking about economic health, you kind of have conceded the local economy isn’t good.

    By the way, I was born in Cleveland when it was still one of the 10 largest cities in the US. Not sure if that makes me a “native” as I moved away when I was 11 years old. Today I live in San Francisco. My next door neighbor is from Shaker Heights.

    As for Kroenke, I’m not making a moral statement. Yes, St Louis has been in decline for nearly a century and he knew that. Heck, Bill Bidwell looked at the same trends and decided to pull up stakes several decades ago.

  15. Aqib: Having many Fortune 500’s doesn’t necessarily translate into guaranteed sponsorships for a new stadium. If that were the case, the 49ers new stadium naming rights sponsor would have been Apple Computer, Cisco, Google, Hewlett Packard, Intel or Yahoo stadium instead of Levi’s

  16. Scola, to be clear:

    1. St. Louis city’s population loss has been partially absorbed by the metropolitan area, which has continued to grow, albeit not at the stratospheric rates of some sun belt cities. Boston’s rank has fallen over the years and no one is predicting doom there either.

    2. St. Louis shares the same economic challenges with numerous other NFL cities, and arguably is still in a better position than many of them. St. Louis is a larger MSA with a better Fortune 500 presence than Kansas City, for example–and KC has only a renovated stadium from the 1970s. No one is predicting the imminent doom of NFL football in western Missouri.

    Hyperbole aside, St. Louis is not Old Chicago from Buck Rogers.

    3. Given that this all basically admits that the presence of an NFL team doesn’t really influence much that really matters, I don’t think St. Louis should build a new stadium. I suspect fewer people care than the Rams or the NFL pretend, even if those who care are louder or write sports columns. Fans watching at home (having been exiled there by the league) don’t really care how well outfitted the stadium is. The NFL might get a new stadium, with a lot of its own money, in SoCal–and good luck to them when people don’t really care there either.

  17. GDub, to be clear:

    1. I don’t think any team is going to move. The numbers don’t pencil out to build a very expensive private stadium in a league where most revenue is shared.

    2. I think keeping the Rams, if it involves the public financing proposed would be an economic net negative for St Louis.

    3. I think because the NFL does share most revenue and the main impact of the city is how much taxpayer money they are willing to spend, the NFL actually may prefer struggling cities. They are more desperate to show they are still “on the map.” Look at Cincinnati, another city in deep decline, and the way they gave away the store vs. SF/Oakland/LA which said “build your own stadium”

    4. All this said, objectively, nothing Kroenke said about St Louis is news. This was once one of the largest cities in the US and it still retains some businesses, but by every measure: city population, metro area growth, median household income, metropolitan GDP, even stuff like number of flights from their airport, it’s a city in deep decline, one of the deepest in the country. Kroenke is simply stating the obvious.

  18. Gdub: Los Angeles has a base of football fans. However, the key for success will be for the NFL placing one team with in LA with the greatest chance for long term success. In my opinion, I believe that franchise is the Rams. If the league is convinced two teams can make a go of it, they haven’t been reading the historical data.

  19. jcpardell: The number of fans is totally irrelevant. Tell me how many PSLs they can sell, how many sponsorships and how many skyboxes. The rest is the stuff fans care about, but not what makes any impact to the business.

    If the answer is “$1.9B NPV more than in St Louis” then it makes sense but if you believe that this is true, I have a bridge I’d like to sell you.

  20. Regarding:
    “Compared to all other U.S. cities, St. Louis is struggling.”
    If true, Kroenke/Rams can take lots of credit for that because of all the welfare checks from taxpayers they have received over the years for the cost of Edward Jones Dome. It will be a good thing if it comes to pass that the Rams leave St. Louis and save taxpayers about $477 million.

  21. Which would be correct? Is Stan “burring his bridges behind him?” Or, since he hasn’t moved yet, “Burning his bridges in front of him?”

  22. Scola: You are probably right that Kroenke’s dump-all-over-St. Louis treatise will be forgotten, but it would be nice to see the local pols pull their proposal after that slap in the face.

    It was quite the read indeed.

  23. Could it be, that the cities that have professional sport teams are struggling financially because of the professional sports teams?

  24. I don’t doubt that people will watch football in LA. However, this isn’t really what’s at question here, is it?

    The real question is–what’s the profit maximizing course of action for the NFL and NFL owners? Is the “pick a struggling city and soak them in exchange for some free tickets for politicians” model losing some steam? Or does the NFL double down on the hottest and richest metro areas? And if it is the second, how do the owners who are in model #1 feel about it?

    I don’t disagree that St. Louis is declining, I just point out that statistics of decline could be usefully applied to probably 1/3-1/2 of the NFL right now, and even some of the cities that are “growing” aren’t really getting much richer (i.e. Jacksonville, even Tampa by some measures).

    Some of these issues are tied into broader US economic issues, so it seems silly to point out just one city (interestingly Oakland is also often seen the same way and its right in the middle of the #2 MSA in the country). Incidentally, Sacramento is at #41 in the per capita rankings, just ahead of Buffalo, JC!

  25. Scola: PSL sales will be anyone’s guess. Then again, how many PSL sales are projeceted for the new stadium in St. Louis?
    In regards to sponsorships, I can reference what the defunct Farmers Field in LA was set to receive in comparison with the proposed St. Louis football stadium naming rights deal from National Car:
    a) Farmers Field: $700,000,000/30 years =$23,333,333.00 per year
    b) National Car Rental Stadium: $158,000,000/20 years =$7,900,000.00 per year
    I don’t know if the Inglewood stadium will receive a similar offer from potential sponsors. However, its a no-brainer to assume that, from a marketing standpoint, being in Los Angeles provides a franchise with greater visibility than St. Louis. Will that recuperate a $2.6 investment? That’s too far into the future to make such a determination.

  26. GDub: Yeah for Sacramento! Actually, according to United States Census Bureau, Sacramento ranks 40th in regards to median household income which places them above quite a few regions with professional baseball and football teams. https://en.wikipedia.org/wiki/Highest-income_metropolitan_statistical_areas_in_the_United_States

  27. OK, you’ve come up with $0.7B (actually it was $0.6B). Since stadium + relocation see is $2.3B (sorry for bad number before) you just have $1.7B to go.

    To put it in perspective for the cost of moving to LA, you could buy either the Philadelphia Eagles or Chicago Bears and own them in addition to the St Louis Rams.

  28. Scola: No one said it makes any business sense. However, neither of us are advisors to Stan Kroenke, Mark Davis or Dean Spanos, nor can we predict what the value of each franchise will be thirty years from now.

  29. Now tha St. Louis know how desperate Stan is to get out, they need to exploit it. Tell him, “give us $100 million and we’ll tear up our proposal, and evict you from the dome. So the NFL will approve your move.”

  30. Just read all 30 pages of the Rams relocation paperwork.

    They are moving to LA and it is amazing to me St. Louis (RSA) is crying foul here.

    They agreed to the lease terms in 1995 and knew full well in 2005 and 2015 there were checkpoints on the Rams having a 1st tier stadium. They reneged on their agreement and an arbitrator ruled in favor of the team. They knew they had to pay for all improvements! A deal is a deal, no matter how bad it is for one side once it is signed.

    Once RSA lost in arbitration the Rams are now free to leave.

    St. Louis has lost the Rams, I did not know the details of how bad it really was in negotiations.

    Then of course 11th hour St. Louis (RSA) has a proposal they share with the NFL in New York then change the terms after the fact? Wow, you can really trust these guys?

    The Rams are right on for the fact St. Louis is piecing together a proposal to fool the NFL to thinking there is something there therefore giving RSA leverage they never had in the first place and putting the team in a hole.

    The NFL by making them stay would screw the franchise over long term in a market the NFL never wanted the Rams to be in the first place. Georgia Frontiere in 1995 threatened a Anti-trust suit a la Al Davis and the NFL backed down. The St. Louis Cardinials (NFL) failed miserably years ago and the NFL knew it full well.

    The NFL by making them stay would screw the franchise over long term as RSA has proven they cannot be trusted.

    Plus the risk is far less moving 1 team to LA than 2 and the Rams do not require re-alignment. The Chargers/Raiders do and their proposal lacks the fundamentals the Rams have. Like a owner who understands large real estate developments.

    LA Rams in 2016….

    RIP St. Louis, the owners in the NFL cannot let the Rams stay under these conditions. Their situation is far worse than San Diego or Oakland.

  31. The most important point that Kroenke makes is that the St Louis Regional Convention and Sports Complex Authority has been in default for twelve years on the stadium lease provision requiring a “first tier” facility. It’s going to be hard for the NFL to accept that.

  32. SBSJ,

    Their situation is so horrible, they went to two Super Bowls before they got a new owner who doesn’t care about winning in any sport.

    The lease is criminally dumb, but give me a break.

  33. I wouldn’t take anything the Rams say about this at such face value. Nor St. Louis for that matter. Both are incredibly biased parties with a clear agenda to paint things in a certain light.

    “Their situation is so horrible, they went to two Super Bowls before they got a new owner who doesn’t care about winning in any sport.”

    Like every NFL team they’re still making money hand over fist. Intolerable.

  34. Kroeke’s rehashing aside, none of this makes sense:

    Even if the RSA reneged on the extremely one-sided lease terms, why would Stan Kroenke want to lose a billion or two of his own money to get back at them? Talk about cutting off your nose to spite your face.

    Given that getting an NFL franchise, objectively, did nothing for St Louis and in an era where most cities have been recovering economically and in terms of population, St Louis nose-dived losing another 20% of its population and after all of that the NFL just came back and demanded more, why would St Louis double down on a major blunder?

    All throughout I figured this was a game of chicken with two rational actors trying to get the bluff their way to a better deal, but part of me feels I’m watching two suicidal death cults do battle.

  35. jcpardell: It does appear that way. That is very different than saying he actually is.

    Maybe his momma raised a fool. If so he’d do a huge favor to both LA and St Louis. I doubt it. I hope I’m wrong.

  36. Levi’s used the 3rd least public funding of any NFL stadium, roughly 10%. That’s one of the lowest public funding percentages of any current pro sports venue in the US.

  37. The jury is still out on Levi’s Stadium. So long as a public entity owns it, I don’t buy into the notion that taxpayers are insulated from the financial problems of an NFL stadium. Let’s see how its doing a few years from now.

  38. Mohel: Excellent thought!

    As for those suggesting Kroenke has ‘burned his bridges’… seriously? If there is one thing the NFL has learned it’s that ripping teams out of the hearts of their host cities (or suburbs if their hearts are already full) doesn’t mean anyone turns their back on the league…

    Every team that has moved and been “replaced” (either via expansion or additional relocation) has been as a result of a deal that included a massive transfer of taxpayer funds to the league/owner as a “welcome back”.

    Even the lowly NHL, when it deprived it’s fans of games everywhere… TWICE… was greeted with moronic losers lobbing their wallets over the still-locked gates of the arenas when they said “ok, we’ll play a few games after all, then”.

    No, if there’s one thing that stupid politicians and even more stupid fans have proved to the NFL (and in a broader sense all sports leagues) it’s that the more you hurt sports fans the more they will give you, both of their own money and someone else’s.

    You just can’t fix stupid.

  39. “You just can’t fix stupid.”

    Sure you can. It’s called education. Unfortunately we spent all of the money for it on stadiums.

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