The Rams and the NFL agreed Wednesday to pay St. Louis $790 million to settle the lawsuit over the team’s move to Los Angeles. The City of St. Louis alleged that the Rams violated the NFL’s transfer policy.
For now, there are few answers and a lot of pending questions:
What does this settlement mean for St. Louis?
While it’s not the billions in punitive damages some out there were hoping for, the $790 million is staggering. A few decades ago, it would have paid for the entire stadium. This is almost as much as the league paid in its concussion settlement. Without question, it sticks to Stan Kroenke and the NFL after St. Louis lost to the Rams, so a lot of people out there feel retribution.
What does this mean for Kroenke and the NFL?
They can deduct his (substantial) damages and proceed without the dark cloud of this lawsuit. Compromise is not an admission of guilt, but a clear indication that they did not think they would prevail in a St. Louis courtroom. There the potential for a loss would mean astronomically punitive damages. Kroenke and other league owners would be required to post a bond in what amounted to a jury trial decision to appeal to a higher court. Still, there is no guarantee that he will win in the state Supreme Court, and even if he did, the process would take years. The Rams and League failed in their bid to have the matter heard in federal court. A similar case brought by Oakland against the Raiders was dismissed in federal court.
Does Kroenke get stuck with the whole tab?
The league will pay the amount no later than Christmas Eve, but the breakdown of how much the Rams are owed is uncertain. Despite conflicting reports about who would be responsible for payments to St. Louis, league sources said no determination had been made as to who would be responsible for the payments and that the settlement was not part of discussions. .
Kroenke has made it clear that even though he signed an indemnity agreement as part of his deal to move to Los Angeles, he doesn’t believe he has to cover all the legal bills. The owners of the Chargers and Raiders signed similar agreements to cover “costs, including legal fees and other litigation expenses” to defend the challenges of their respective moves.
While the Rams were promoting their stadium in Inglewood, the Chargers and Raiders joined forces to support a competitive offer at Carson. There is a belief in league circles that the search process in St. Louis led to documents coming in from another NFL team or teams as arguments as to why the Rams were not in compliance with transfer guidelines.
If the Chargers and/or Raiders representatives were feeding St. Louis with ways to undermine the Rams’ move, Kroenke would have a strong argument for why he shouldn’t pick up the entire settlement.
The settlement was an earthquake, but of course who takes what responsibility about the aftershocks.
That compromise is a disastrous amount. What mechanisms does the NFL have in place to mitigate its impact?
There are all kinds of ways that commissioner Roger Goodell and the finance committee can ease the sting for Kroenke, if they so desire. Among them, they could defer Kroenke’s $645 million transfer fee, allow the club to increase loan amounts, or hold more Super Bowls and other big events in LA, of course. Those methods of mitigation will have an impact on other teams, so there could be pushback within the league. That said, Kroenke has powerful allies, such as Dallas Cowboys owner Jerry Jones, who allude to the risks and personal fortunes taken by the Rams owner as he built the $5 billion stadium and revamped the NFL in LA. Spent to install.
How will this change the way the NFL does business?
The NFL is going to do everything it can to try to avoid one of these situations. This would mean more comprehensive and airtight agreements with cities trying to attract teams or signing new leases with teams they already have. Certainly, it’s a topic that many NFL owners are well aware of: multi-billion-dollar pre-compromises.