Rams owner Stan Kroenke probably isn’t going to be a very popular person at the next NFL owners meeting and that’s because he’s basically issued a threat that could end up costing the other 31 owners billions of dollars if he follows through with it.
The NFL and the league’s 32 owners are currently the defendants in a lawsuit that revolves around the Rams decision to leave St. Louis. The lawsuit, which was originally filed by the city of St. Louis, St. Louis County and the Regional Convention and Sports Complex Authority all the way back in 2017 is currently scheduled to go to trial on January 10.
With the NFL facing the reality of a trial date that’s now less than two months away, Kroenke is now doing everything possible to try and settle the lawsuit. According to an email obtained by the Sports Business Journal, Kroenke’s reps believe the suit can be settled for somewhere between $500 million and $750 million (Kroenke had already offered a $100 million settlement, but got turned down).
From a legal standpoint, the other NFL owners apparently feel that Kroenke should be on the hook for the entire settlement due to an indemnification agreement he signed when the Rams moved out of St. Louis following the 2015 season. However, Kroenke doesn’t feel the same away.
According to the email he sent, Kroenke has threatened to make a settlement in the lawsuit that would only pertain to him, which means the other 31 teams would still have to go to trial on Jan. 10. The only way Kroenke won’t go through with this threat is if the other 31 teams agree to split the cost of whatever the final settlement number ends up being.
“If we 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,” the email reads, via SBJ. “We do not want to do that. We want everyone’s participation — or some assurance from the league that a settlement will be allocated fairly. But we have not gotten that assurance to date, nor any suggestion that the league will try to settle the case and address allocation later.”
A late October report from ESPN has suggested that Kroenke is trying to backtrack on his promise to pay the entire settlement because he doesn’t think he’s legally required to fork over the money. Kroenke has been covering the legal fees in the case, but he doesn’t believe the language in the indemnification agreement requires him to pay the settlement if the NFL loses or settles the case (Pro Football Talk’s Mike Florio outlined here why Kroenke actually has a pretty strong legal leg to stand on).
According to that same ESPN story, some owners are fearing that the judgement against them might end up being into the billions of dollars if the NFL loses the case. If the NFL doesn’t agree to split the settlement with Kroenke, it’s easy to see a situation where the Rams owner walks into the mediation room and offers a number under $500 million to settle the case while also telling the plaintiffs that they could get billions more when the lawsuit proceeds against the rest of the NFL. For instance, if Kroenke settles for $200 million, the plaintiffs could use that as a jumping off point for potential damages from each team at trial (If all 32 teams had to pay $200 million, that would be $6.2 billion for the plaintiffs).
The lawsuit lists all 32 NFL teams (and their owners) as defendants. The lawsuit was filed because the plaintiffs feel the Rams “violated the obligations and standards governing team relocations” by moving the franchise. Basically, St. Louis feels that the Rams broke the NFL’s relocation guidelines when they left and the other teams are at fault because they voted to let the Rams move.
The NFL has been taking hit after hit in this case, which is likely one reason why Kroenke wants to make sure the lawsuit doesn’t make it to trial. Among the hits: The plaintiffs were granted access to the financial records of several prominent people in the NFL, including league commissioner Roger Goodell; owners Kroenke, Jerry Jones (Cowboys), Robert Kraft (Patriots) and John Mara (Giants); and former Panthers owner Jerry Richardson. The NFL also got shot down recently when trying to get the case moved out of St. Louis.
Unfortunately for the NFL, it’s not going to have very much time to decide whether to accept Kroenke’s terms. The Rams have mediation on Nov. 23, which means the league’s owners will likely need to decide before then if they’re willing to split the cost of any potential settlement.
No matter what happens, it’s safe to say that Kroenke isn’t going to be the most popular guy around the league for the next few years.
