The Los Angeles Times’ Bill Shaikin had a crazy-long article yesterday about the city of St. Louis’ lawsuit against Rams owner Stan Kroenke for moving the team to Los Angeles in alleged violation of league rules, and because one of Field of Schemes’ jobs is reading crazy-long articles so you don’t have to, here are the important bits:
On April 12, 2017 — 16 days after NFL owners approved the Raiders’ move from Oakland to Las Vegas, and 15 months after NFL owners approved the Rams’ move from St. Louis to L.A. — St. Louis sued. Oakland later sued too.
In both cases, the NFL argued the relocation guidelines represented a league policy, not a binding contract.
This, no doubt, is why the NFL agreed to set up relocation guidelines in the first place: They never expected anyone to hold them to them. (The guidelines, reports Shaikin, were first arrived at back in the ’90s after discussions between the NFL and the U.S. Conference of Mayors to prevent teams from leaving town without warning.) After all, it’s not like a judge would rule that violating your own internal rules could have real-world consequen —
St. Louis Circuit Court Judge Christopher McGraugh ruled that the relocation policy was akin to a contract in that it “contains obligations and promises that may be enforceable in a court of law” and that “many provisions of the relocation policy were intended for the benefit of a club’s home territory.”
Damn those judges, with their minds of their own!
The city of St. Louis’s argument, basically, is that Kroenke always intended to move to L.A., and never negotiated in good faith with St. Louis to keep the team there. And apparently they turned up some evidence for that contention — we’d already heard that Dallas Cowboys owner Jerry Jones was mad about one unnamed owner having delivered a “shaky” deposition, and now there’s this:
There is concern in league circles that the discovery process could have turned up documents in which Chargers and Raiders officials — in trying to win NFL approval for their proposed stadium in Carson — outlined how they believed the Rams might not have been in compliance with the relocation policy, according to people familiar with the case not authorized to speak due to the ongoing litigation.
One uncomfortable document already has been disclosed in court. Before the NFL owners voted on whether the Rams would be permitted to move to Los Angeles, Rams staffers had prepared a farewell letter to the fans in St. Louis. Within the Rams’ offices, the document was known as the “AMF letter.”
AMF stood for “Adios, Mother F—.”
Okay, so Kroenke and the NFL may have played a little fast and loose with the whole negotiate-in-good-faith-with-your-current-city thing, figuring no one would really hold them to it. What could this mean if they lose in court?
St. Louis has asked to be awarded the $550 million that the Rams paid the NFL as a relocation fee, as well as the increase in the franchise value since the move.
Forbes estimated the Rams’ franchise value at $1.45 billion in 2016, just before the Rams moved, and at $4.8 billion in 2021.
Throw in the tax revenue St. Louis lost when the Rams moved, and damages could top $4 billion, independent of any punitive damages.
That is a lot of money, even for a guy worth upwards of $10 billion. So, naturally, Kroenke doesn’t want to have to be the one to pay it, even though he agreed to indemnify the NFL for any losses sustained in court:
Kroenke could sue the NFL if Goodell tries to compel him to pay damages should a jury find he violated a relocation policy with which the league said he had complied. Kroenke has informed his fellow owners he does not believe the legal “costs” covered under the indemnity extend to damages, and he has asked them to share in the cost of a settlement.
So what we have here is a three-way battle, where Kroenke is trying to settle the lawsuit (his latest offer is believed to be in the $500-750 million range) while simultaneously fighting with the NFL to pay part of the tab. How that latter negotiation is going is the juicy part that I wish Shaikin had more on — there is one delicious quote from Washington University sports business professor Patrick Rishe saying, “Right now, I think they want to roast Stan, figuratively and literally” — but as the court proceedings get ready to kick off in January, things are likely to heat up.
All in all, when you take in the roughly $6 billion Kroenke spent on his new stadium plus his neglecting to ensure that the Chargers would actually have to try to sell seat licenses to help defray his cost, maybe this whole moving-to-L.A.-just-to-prove-he-could thing wasn’t such a great idea after all. Apparently having billions of dollars plus “big balls” doesn’t actually help you make smart decisions — which may be cold comfort to St. Louis football fans, but if their city can get a billion dollars or two on top of the schadenfreude, that’s not nothing.
[UPDATE: Well, that was fast. We’ll see if Kroenke ends up paying the whole $790 million or tries to stick the NFL with some of the bill — more details once there’s an actual announcement, one hopes.]
You do know that any money ever paid will be used to build a new stadium, right?
Allow me my dreams for one minute before dashing them please!
Reports out of StL
Case has settled for 790million
Yep. That was fast:
https://www.stltoday.com/sports/football/professional/settlement-near-final-in-rams-relocation-lawsuit-saga/article_020b5bde-3a33-557b-aa8c-870b4c562d03.html
Two interesting points from the article:
– The law firms Dowd Bennett and Blitz Bardgett & Deutsch that represented the plaintiffs will receive 35% of the settlement, or $276.5 million, for their work on the case.
– The settlement ends the lawsuit. The league will pay the money within a month, and will determine internally how much will be shouldered by Los Angeles Rams owner Stan Kroenke, and how much by the league and owners.
I wonder if the potential outcome of this lawsuit going to trial was holding up any team sales. It was rumored that Jeff Bezos visited Halas Hall (Chicago Bears HQ) on Nov 18th.
Let Neil dream!
No Michael B, No!
Stand down!
There’s a long list of civic needs that need attention: schools, roads, bridges, parks, librari-oh, never mind…..
Billionaires with big balls in trouble
HA HA HA HA HA!!!!!
He made his money because of who he married, not because he was particularly bright.
So is this why talks of expanding the league to 40 teams is going on? So the NFL could just give st. Louis a team instead of kroenke paying the money he owes?
They wouldn’t just “give” St Louis a team. It would be a situation like Cleveland where potential owners would just bid for it. I am guessing the fee would be north of $2 billion
Moot point anyway: “The settlement does not include an expansion football team for St. Louis, a source said.”
AkWu: I would bet that even if the settlement had included an expansion team reserved for St. Louis, Kroenke’s fellow owners would have demanded he pay them their shares of the expansion fee…
The “all for one” motto never really seems to apply to the billionaire boys club.
Wouldn’t it be just fantastic if one of the owners had given their “shaky” deposition on purpose to express their objection to the Rams move in a way that the other owners couldn’t bully them out of doing?
Apparently having an NFL team in your area is worth at least $790 million.
https://www.stltoday.com/sports/football/professional/sources-790-million-settlement-reached-in-rams-relocation-lawsuit/article_020b5bde-3a33-557b-aa8c-870b4c562d03.html
And you only have to spend $1 billion on a stadium to get that $dough!
As settlement fishing goes, this was a real winner.
I was expecting the settlement to be whatever the outstanding costs associated with the Dome were and it’s maintenance/upgrades over the last decade or so, as well as legal costs and a nominal fee for “suffering” or inconvenience (talking to Stan or his representatives can’t be easy or fun).
In other words, somewhere in the $100-225m range, depending on what lawyers propose as reasonable costs and what a judge thinks is actually a reasonable amount… some amount that everyone involves feel quite uneasy about.
$790m is a great result for the city (and has nothing to do with the perceived value of the Rams were they still in St Louis… it’s all about actual costs incurred in attempting to ‘keep’ the team and damages related to the deception). And it is an agreed settlement, so “no backsies” applies even after the NFL sits down and thinks about ‘how unfair people are to billionaires’ with its highly paid lawyers.
Speaking of lawyers, 35%… yeah. Wow. I bet the city thought they would be talking about 35% of $100m or so and accrued costs that would have been in the 20m range (what the 35% was in lieu of). Still, $513m more than makes them whole.
The best part is “no expansion team awarded to St. Louis as part of the deal”. Yeah, like they would want to deal with the NFL and it’s carpet baggers a third time…
The sad part is we are unlikely to hear anything about the internal war within the NFL owners group about how to split the costs… THAT would make great tv.
“The sad part is we are unlikely to hear anything about the internal war within the NFL owners group about how to split the costs… THAT would make great tv.”
Well, the 10/27/2021 fly-on-the-wall piece by ESPN covering the NFL owners’ meeting was pretty revealing, so we might always hope for a follow-up covering the divvying up of the damages. What’s choice is how Kroenke ally Jerry Jones (whose Legends company services the new SoFi stadium) blames the debacle on a weak deposition by one of his fellow owners, when the actions of Kroenke, Rams COO Kevin Demoff, NFL official Eric Grubman, and others gave the STL lawyers plenty of rope for lassoing Kroenke. For example: When the Rams hired Jeff Fisher as their head coach in 2012, Fisher told STL Post-Dispatch Rams beat-writer Jim Thomas that the Kroenke/Demoff questions on how Fisher handled the Oilers’ move from Houston to Tennessee dominated the interview. That, combined with public statements from Demoff in light of the move-related chronology, is more than plenty to make for a story to rival Sonicsgate. Probably good that the STL lawyers quit while they were ahead — the legal history of STL vs the NFL had not been good for STL. The local joke is that the $790M settlement reflects the 7-9-0 records Fisher twice posted with the Rams in advance of the move.
Sadly, there are an above-average number of St. Louisans who worry about proving the “St. Louis is a good sports town” label and thus will pursue another NFL team under that dubious rationale. No idea of who in STL would seek to own it — the Taylor family of the Enterprise Rent-a-Car fortune, which holds the naming rights to the hockey arena, is heavily invested in the MLS scam with its new stadium and all. (I’m waiting for Kroenke and the other “older” MLS owners to relegate the newer MLS teams such as STL to a second division.) Before COVID-19 nuked the 2020 XFL season, the St. Louis entry was poised to become the first XFL team to sell upper-deck tickets in the dome abandoned by Kroenke — that sort of thing will likely be used by the pro-NFL types to justify pursuit of a team. Far better were STL to leave well-enough alone, put the $790M minus legal fees to good local use (a first, I know), and through its win strengthen other cities its size against its NFL teams (i.e., Cincinnati, with that business about the Bengals needing a 3-D holographic scoreboard should such a thing be invented and used elsewhere). Anything to keep Jerry and Stan and their lesser grifters in check.
Go Bills
St louis has a legendary team, the greatest show on turf, one super bowl championship and another super bowl appearance. They already have more than the lions and browns. Nfl? Nah we gud