Has The Latest Stan Kroenke Salvo Pushed St. Louis Closer Towards An Unprecedented Payday?

INGLEWOOD, CALIFORNIA – SEPTEMBER 08: Los Angeles Rams Owner and Chairman Stan Kroenke speaks during … [+] the SoFi Stadium ribbon-cutting event on September 08, 2020 in Inglewood, California. (Photo by Rich Fury/Getty Images for Hollywood Park Management Company)

Getty Images for Hollywood Park Management Company

It’s beginning to look a lot like Christmas for St. Louis City, St. Louis County, and thousands in the Show-Me State who view Los Angeles Rams owner Stan Kroenke as the grinch who stole professional football from St. Louis.

And according to reporting by Sports Business Journal today, Kroenke and his legal team are playing a game of bah humbug with the NFL and his fellow owners which could further hasten an unprecedented payday for the plaintiffs from St. Louis.

According to SBJ’s Ben Fischer, who in his reporting cited an email sent to both the league and all other 31 clubs, Kroenke’s reps want to settle the case and believe they can for $500-750 million.

Furthermore, the email reads, “If we (the Rams) continue to not get any assurances from the league regarding allocation (of damages), we will have no choice but to try to resolve the case on behalf of only the Rams and Mr. Kroenke.”

This legal salvo from the Kroenke camp is in reference to topics raised in a recent report by ESPN which revealed that Kroenke has essentially been trying to find a legal loophole in the indemnification agreement he signed in January 2016 which was vital in convincing the league’s other owners to select the Rams relocation bid to Los Angeles over San Diego’s and Oakland’s.

According to ESPN’s reporting, fellow owners used words such as “unfair” and “ridiculous” to categorize Kroenke’s shift in position from his prior written promise to pay the costs of a prolonged legal battle against St. Louis.  These comments underscore the growing public disdain among owners towards Kroenke, furthering my suspicion that all NFL parties are going to want to settle this case sooner than later.

With a looming court date of January 10th, a mediation session set for the Tuesday before Thanksgiving, and Kroenke recently making his fellow owners as irate with him as jilted football fans in St. Louis, many questions arise.

Will this case settle before the trial starts on January 10th, 2022?

I would be shocked if it didn’t settle before trial.

There have already been unflattering leaks of information which have further sullied the reputation of team and league officials. So there is no telling how much more reputational damage could occur if more documents become public fodder.

And in what seems to be a tidal wave of tawdry revelations across the entire sports landscape in recent months – from John Gruden’s extremely problematic emails to the Blackhawks’ egregious mishandling of the Kyle Beach matter and beyond – does the NFL, the Rams, Kroenke, and other NFL owners really want to take a chance of even more dirty laundry being aired? Not likely.

Especially when the sport’s marquee event, the Super Bowl, will be contested at the Rams’ SoFi Stadium in February. There is no way the NFL or Kroenke would want to stomach the negative publicity of an on-going trial during their crown jewel event in their new crown jewel facility.

Will Kroenke follow through on his threat, break ranks with his fellow owners and settle with St. Louis on his own, leaving the NFL and his fellow owners to fend for themselves?

I strongly believe he will follow through on this threat if Kroenke and the league cannot resolve their differences regarding the allocation of damages.

Zebras don’t change their stripes. Kroenke cut bait from St. Louis when he found an opportunity to do so while bolstering his own financial interest. Now he is attempting to cut bait with his fellow owners. Commissioner Roger Goodell and the other 31 owners are now getting a taste of the sour medicine St. Louisans were force-fed in 2015-2016.

How much will the St. Louis plaintiffs be awarded in a settlement should a settlement arise?

Based on the reporting from both ESPN and SBJ in recent weeks, and taking into consideration my assessments of likely damages to be paid by all parties combined (Kroenke, the NFL, the other 31 teams), I believe the final damages assessment will be between $2-4 billion.

Referencing the afore-mentioned email and Kroenke’s alleged estimate of being able to settle for between $500-750 million, it is my assessment and read on the case that Kroenke will eventually face damages closer to $1 billion.

What about the scenario of the NFL gifting St. Louis a future expansion franchise to avoid billions in cash damages?

It is likely the NFL will eventually expand beyond 32 teams, and when they do, St. Louis would likely be among the markets considered for expansion.

But as much as the NFL and other owners might wish to avoid a settlement in the billions, it is unlikely the league gifts an expansion franchise to St. Louis at this time. Too much bad blood between the two parties at the moment, and there would still need to be a viable ownership group in St. Louis and a new stadium.

That said, one way the plaintiff’s lawyers could play their hand in any settlement is to negotiate 2 things in the event St. Louis ever rejoins the NFL. First, the expansion fee would be below the market rate. Second, the NFL would help finance a large portion of the cost of a new stadium.

For example, if an NFL expansion fee is $4 billion and the cost of a new stadium in a market like St. Louis is $2 billion, negotiating 50% coverage on both would be tantamount to a $3 billion savings for the new ownership group.

That said, there is so much mistrust at the moment, the plaintiff’s lawyers are not likely to accept less in current cash damages in the hopes of future financial concessions if/when the league decided to return to St. Louis.

Source: Has The Latest Stan Kroenke Salvo Pushed St. Louis Closer Towards An Unprecedented Payday?

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