Here’s Part II of my follow-up on Wednesday’s interview with NFL executive VP Eric Grubman on my 101 ESPN radio show:
Rams owner Stan Kroenke hasn’t given up on his NFL California dream and remains obsessed with getting control of Los Angeles, the nation’s second-largest market. Despite the substantial and unrelenting damage that Kroenke has done to his own franchise in St. Louis, the Rams’ value continues to grow.
Rams owner Stan Kroenke
Three months ago Forbes put the Rams value at $1.45 billion, which ranks 28th among the 32 NFL teams. That seems about right; only three NFL teams have won fewer games than Kroenke’s Rams (33-58-1) since he took over as majority owner in 2010. The Rams last posted a winning record in 2003. But the chronic losing doesn’t matter if Kroenke can win the support of the NFL owners and transport his team to Los Angeles. The Inglewood Rams would be worth as much as $3 billion to $3.5 billion if Kroenke wins the three-team contest for LA.
The San Diego Chargers and Oakland Raiders are competing against Kroenke in Los Angeles by partnering for a proposed new stadium in Carson. The Chargers-Raiders’ lineup recently received a tremendous boost by the addition of powerful Disney CEO Bob Iger, who signed on as chairman of the Carson project. And if Carson is approved by the NFL, Iger will be given the option to buy a stake (possibly 20 percent) in one of the teams.
Iger already is a popular, admired NFL business partner through ESPN. His plans for the Carson stadium / entertainment complex have created a positive buzz inside the league, and at this point Carson appears to have gained the momentum over Inglewood as the league moves closer to next month’s vote to resolve the LA situation. In a volatile and political NFL that’s subject to change, but Carson is looking good.
So …
What if the NFL owners reject Kroenke?
“That’s a very interesting question,” Grubman told me.
Yes. It is.
But Grubman volunteered a few speculative thoughts on Kroenke’s likely position going forward if LA is removed as an immediate option.
Grubman — speaking for Kroenke — made sure to remind us that Kroenke can keep the Rams in the Edward Jones Dome on a year-to-year lease.
“He doesn’t have to do anything,” Grubman told me. “He has a lease. That lease has rights. What he may choose to do in the future is the same as anybody who would in that situation. It depends on what his options are.”
So there you have it. That’s Kroenke’s plan if he loses Los Angeles to the Chargers, Raiders and Iger.
And by going our radio station to reject the St. Louis financial proposal for the new stadium, Grubman set the template in advance of potential Kroenke, STL negotiations.
By the way: does anyone else find it odd that Grubman dismissed a proposal that doesn’t exist?
The task force has until Dec. 30 to submit its formal proposal to the league.
Grubman staked out Kroenke’s position for him here: if the LA vote goes to Carson, it doesn’t mean Kroenke will agree to play in the stadium developed by the STL task force.
If Kroenke is open to sincere negotiations — and that remains to be seen — Grubman wants to squeeze as much public funding as possible from St. Louis and the state to make the arrangement more lucrative for Kroenke, who is worth $7.7 billion according to Forbes. But if St. Louis wants Kroenke to come to the table, then we’d better come up with every last nickel and dime to make him happy.
That’s the cost — literally and figuratively — of having an NFL team. And yet another sobering lesson for a city/state that spent $250 million on the Edward Jones Dome — all of it publicly financed — less than 25 years ago. And even though our region is prepared to commit another $400 million to a second stadium project here — well, if Enos Stanley Kroenke doesn’t like it, then he’ll hold out for more.
And as Grubman helpfully explained, Kroenke can retreat to the Edward Jones Dome and ponder his options.
Here’s Grubman: “Does one team go to Los Angeles, and there is still room for a second? Do two teams go? Do no teams go? Do any other teams come up for sale? Do any other teams vacate markets that he may think are attractive? Are there markets that are currently not occupied by an NFL franchise that he might think are attractive?”
Grubman presented a few different road maps there.
So let’s play the parlor game, shall we?
If Kroenke loses the LA vote and keeps the Rams in St. Louis in 2016 (or beyond) as he assesses the future, what are his options?
Kroenke can go on the offensive and move the Rams to Inglewood in defiance of the NFL vote.
If Kroenke chooses this course, he would be daring the NFL to engage him in a legal battle. The NFL insists it has the legal authority to impose drastic penalties on an owner that violates league rules. Measures that include taking away the owner’s share of the annual national broadcast revenue — or taking the step that would remove home games from the team’s schedule. I don’t think it will come to that. I’ve had two people close to Kroenke insist that he has no plans to go rogue. That said, I don’t dare to predict what Kroenke will do. That would be insane.
Kroenke can make peace with St. Louis, curry favor with the NFL, and be rewarded by being given a chance to purchase the Denver Broncos when the Bowlen family sells.
Makes sense because Kroenke can add to his sports empire in Denver. And he can sell the Rams at a very handsome profit — based on his relatively low-cost of investment in gaining 100 percent franchise ownership. I’ve been citing this possible scenario for at least a year now, and every time I mention it I receive emails that let me know the Bowlen family will never, ever sell the Broncos to Kroenke. More than a few influential NFL people believe a Kroenke-Denver outcome is quite feasible. The truth will eventually be revealed.
Kroenke parks the Rams in St. Louis for a few years, then is granted permission to move the team to London, England.
I don’t doubt Kroenke’s interest in London. He already has a sports base in London through his ownership of Arsenal, one of the most prestigious soccer franchises in the world. As propaganda — leaked by the usual amateurish source at Rams Park, and possibly by Grubman himself — the Kroenke-London narrative is juicy. But there are a few problems with it: (A) The NFL doesn’t appear to be anywhere close to making a decision to put a team in London. (B) London has been identified by ISIS as the next target for terrorist attacks. This is a very dangerous time to permanently put a U.S. football team in London. Especially one owned by Kroenke, who has such strong ties to Wal-Mart, a symbol of American capitalism. (C) Jacksonville Jaguars owner Shad Khan already has established his presence as the NFL’s man in London, working tirelessly to promote the league and the sport and Great Britain. Unlike Kroenke, Khan has scored significant points with the NFL and its owners with his dedicated efforts to generate goodwill and build a marketing network in advance of the league’s eventual migration to London. Accordingly, Khan is first in line (if he chooses to be) if the NFL ever puts a team, full-time, in London.
Kroenke can move the Rams to Toronto.
The nearby Buffalo Bills have tried to cultivate Toronto as a satellite market, and it hasn’t gone as well as hoped. Toronto would seemingly be an attractive spot for an NFL team. But can we point something out here? If you’re the most powerful sports league in the world, and you are planning to put an NFL team in Toronto, and you are not entirely sure that success will be automatic and guaranteed … do you really want Kroenke leading the mission into Canada? His NFL team has gotten worse under his leadership. He has no public-relations touch, no desire to engage fans, no interest in being front and center in a way that would grow and imbed the NFL brand. No one really knows if Toronto is a fertile NFL market, but Kroenke-Toronto would be an odd fit. But if Kroenke is rejected in his LA bid, you can expect a lot more Toronto-related propaganda to be served up.
Kroenke can move the Rams to San Antonio.
Well, best of luck with that. I’m sure Dallas Cowboys owner Jerry Jones and Houston Texans owner Bob McNair would be absolutely thrilled to give up their shared San Antonio territory. They’d be delighted to relinquish their San Antonio precinct to Kroenke and sacrifice the considerable revenue that comes from San Antonio-based fans of the Cowboys and the Texans. Sure.
If the Chargers and Raiders win the battle for Los Angeles, Kroenke can take his team to San Diego.
I certainly wouldn’t rule this one out. But I ran it by someone connected to Chargers owner Dean Spanos. Here’s the answer: “If they’re set up in Carson, there’s no way in hell Dean Spanos or (Raiders owner) Mark Davis would stand by and do nothing if Kroenke tries to take the Rams to San Diego.”
Ok, so why is that? The person explained: it would be a challenge to make two teams work in Southern California. And all of a sudden, it’s three teams? This would make the NFL very nervous. And Spanos and Davis would likely have ample league support in taking a stand and keeping Kroenke from encroaching on their territory.
OK, so if the Raiders are in Carson then Kroenke puts the Rams in Oakland or San Jose.
Maybe. That’s a vast area of Northern California. But how would San Francisco 49ers’ ownership feel about having the Bay Area to themselves for a while, only to have Kroenke move in as a football neighbor, tapping into that region’s NFL revenue? But I can I envision Kroenke trying to make some sort of mega real-estate development deal in the East Bay area, with a stadium as the centerpiece. But would this venture likely require public funding and a vote of taxpayers? If so, that would be a grim development for Kroenke unless he finds a way to buy influence and get around the problem.
Kroenke can develop and build his own stadium in the St. Louis area. He recently purchased land in Maryland Heights.
This is a popular theory, locally. That’s understandable. However, it isn’t as simple as it seems. The city and state have come up with $400 million in funding for the riverfront stadium project. That’s a now-or-never commitment. If Kroenke wants to develop a stadium in St. Louis County, and he expects a big chunk of public money to help him out, that $400 million would be long gone. The city and state have gone to extraordinary lengths and stretched as far as possible to build Kroenke a new stadium on the riverfront. If he refuses to sign a lease to play in it, the riverfront stadium is dead. It will never be built. And after being burned by Kroenke’s snub of $400 million in public funds for the riverfront venue, why would any area politician trust Kroenke to go to bat for him again — and jeopardize their reputation and political future? I suppose there’s always a way to work something out … but maybe Kroenke just has no desire to work anything out.
Kroenke can keep the Rams at the Dome for as long as he wants, knowing that a lucrative opportunity will emerge at some point. And then he’ll leave with the Rams.
OK, so what’s the time frame? How many years would Kroenke wait? And what would be the opportunity? If nothing changes — the Rams continue to lose, and Kroenke continues to alienate and destroy his own fan base — it would be a horrible situation for him, and for the St. Louis fans, and for the NFL. Staying in the Dome and with an awful team and shrinking fan base would cost him money. The Rams’ revenue would continue to drop, year by year. How does he benefit from that? How does the league benefit by having an embarrassing, eyesore franchise wallowing in a cold, half-empty Dome? How does that advance anyone’s business interests or enhance the NFL’s image?
You may say — and Kroenke apologists certainly would say — if Enos Stanley and his losing outfit stay in the Dome a few more years the fan base will be obliterated, and the NFL would have no choice but to let him move somewhere. Really? The NFL would reward Kroenke after he rejected $400 million of public money to move into a new stadium so he could hole up as an outlaw in the Dome as part of a scheme to sabotage his own franchise and the St. Louis market for eventual personal gain? I would never try to convince anyone that the NFL is the domain of moral, ethical, principled people. It’s the exact opposite, really. But even by the usual NFL standards — low — this would be beyond the pale.
Kroenke can just get fed up with all of this and sell the Rams.
I don’t think so. Nothing suggests he’d be willing to sell a property that will only increase in value no matter how poorly or carelessly he operates it. Even the NFL’s worst owner is guaranteed a tremendous amount of revenue. Yeah, maybe Kroenke would have a chance to buy the Broncos or another NFL franchise at some point. Maybe he will just want to get the heck out of St. Louis and sell the Rams to the highest bidder. Here’s a thought: even if Kroenke plans to sell — and I don’t think he will, not unless he has a more attractive option lined up — he could command a higher sale price by auctioning a franchise playing in a new stadium compared to selling a team that’s stuck in an outdated stadium. The value of the Rams’ goes up if they’re playing in the new home.
Here’s what would happen if the NFL had strong leadership, authentic integrity and a true commitment to markets that support a bad product and that demonstrate a willingness to raise an ungodly amount of public funds to keep an owner happy:
The league leadership would sit down with Kroenke, tell him he needs to clean up the epic mess of his own creation in St. Louis, and do what’s right for the league instead of what’s best for him. Make a deal in St. Louis. Get the best deal you possibly can, but it doesn’t have to be perfect. Accept that $400 million gift of public money and find a way to make it work. Try to reconnect with your fans. Try to give these people a good football team. Try to be a partner in the St. Louis community. If the owners of the Cardinals and Blues can do it, then you should make the same effort. Try to be decent human being.
Now. Do any of us think this will happen?
Laughter …
Thanks for reading …
–Bernie
Read More: Miklasz – St. Louis and Stan Kroenke: NFL Preparing For Round Two
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