The Rams and NFL agreed Wednesday to pay $790 million to St. Louis to settle a lawsuit over the team’s move to Los Angeles. The City of St. Louis alleged the Rams violated the NFL’s relocation policy.
For now, there are some answers and lots of lingering questions:
What does this settlement mean for St. Louis?
While it’s not the billions in punitive damages that some people there were hoping for, the $790 million is staggering. A couple decades ago, that would have paid for an entire stadium. It’s almost as much as the league has paid in its concussion settlement. Without question, St. Louis stuck it to Stan Kroenke and the NFL after losing the Rams, so a lot of people there feel vindication.
What’s it mean for Kroenke and the NFL?
They can cut his (substantial) losses and move forward without the dark cloud of this lawsuit overhead. The settlement isn’t an admission of guilt, but a clear indication they didn’t think they would prevail in a St. Louis courtroom. A loss there likely would have meant astronomical punitive damages. Kroenke and the other league owners would have been required to post a bond, likely in the amount of the jury trial verdict, in order to appeal to a higher court. Even then, there’s no guarantee they would win in state supreme court, and even if they did the process would take years. The Rams and league failed in their bid to have this case heard in federal court. A similar case brought against the Raiders by Oakland 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 owe is undetermined. Despite conflicting reports about who will be responsible for the payment to St. Louis, league sources say no determination has been made as to who will be responsible for the payment and that was not part of the settlement discussions.
Kroenke has made it plain that even though he signed an indemnification agreement as part of his deal to move to Los Angeles, he doesn’t believe he should have to cover all the legal bills. The owners of the Chargers and Raiders signed identical agreements to cover the “costs, including legal fees and other litigation expenses” to defend challenges to their respective moves.
While the Rams were touting their stadium in Inglewood, the Chargers and Raiders had joined forces to back a competing proposal in Carson. There’s a belief in league circles that the discovery process in St. Louis turned up documents coming from another NFL team or teams outlining arguments for why the Rams weren’t in compliance with the relocation guidelines.
If representatives of the Chargers and/or Raiders were feeding St. Louis with ways to undermine the Rams’ bid to move, Kroenke seemingly would have a strong argument for why he shouldn’t have to shoulder the entire settlement.
The settlement was the earthquake, but surely there are aftershocks to come regarding who bears responsibility for what.
That settlement is a devastating amount. What mechanisms does the NFL have to mitigate the impact of it?
There are all sorts of ways that, if inclined, commissioner Roger Goodell and the finance committee could reduce the sting for Kroenke. Among them, they could defer Kroenke’s $645-million relocation fee, increase the amount of debt the club is allowed to carry, or commit more Super Bowls and other big events to L.A. Of course, those methods of mitigation would have an effect on other teams, so there might be pushback within the league. That said, Kroenke has powerful allies, such as Dallas Cowboys owner Jerry Jones, who point to the risks the Rams owner has taken and personal fortune he’s spent to construct a $5-billion stadium and reestablish the NFL in L.A.
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. That likely will mean more comprehensive and airtight pacts with cities trying to attract teams or sign new leases with teams they already have. Surely, it’s a topic lots of NFL owners know well: multi-billion-dollar prenuptial agreements.
This story originally appeared in Los Angeles Times.