NFL Creates Ad Hoc Owners Group To See Who Pays The $790 Million Settlement To St. Louis

Daniel Kaplan, writer for The Athletic, wrote about the NFL creating an ad hoc ownership group to determine who must pay the $790 million settlement tab to St. Louis. Owners, at their annual meetings in March, tried to determine whether the $790 million bill should fall solely on Rams owner Stan Kroenke or be spread across the other clubs. NFL commissioner Roger Goodell, several months ago, appointed a five-owner ad hoc committee to try to resolve the issue. Advocates for Kroenke to fully pay the tab and advocates for all owners to pay the tab are on the ad hoc committee. These owners were not disclosed, but one thing is for sure, Dallas Cowboys owner Jerry Jones is not on the ad hoc committee.

Jerry Jones could be seen as Kroenke’s right hand man, or even the leader that pushed the owners to vote for Kroenke’s plan when the owners voted in Houston to approve the Rams’ relocation to Los Angeles on January 12, 2016. He is seen as the owner that pushed for the blind vote, even threatening revenue losses from the TV contracts and they would lose their ability to host a Super Bowl, according to Ben Frederickson from the St. Louis Post Dispatch.

For those owners saying Kroenke should pay the entire $790 million settlement fee, they argue that Kroenke signed an indemnification agreement when he won the right to relocate the Rams in 2016, meaning he would cover all costs associated with the move. Seth Wickersham, senior writer for ESPN, wrote about an owners meeting earlier this year where New York Giants owner John Mara Jr. stated he would not have voted for Kroenke’s plan if Kroenke did not cover the entire payment, and he would not stick to the indemnification agreement.

Kroenke has several arguments for why he should not cover the full settlement, which the NFL paid in December. The competing project at the 2016 owners’ vote for the L.A. market was led by the Chargers and Raiders. Those two clubs sent material to then Missouri Governor Jay Nixon’s office that laid out how, arguably, the Rams did not follow the relocation bylaws. Kroenke argues if not for this information, St. Louis would not have had a case against the NFL. Kroenke argues this insight from the Raiders and Chargers formed the backbone of the St. Louis legal case and made it more difficult to get the case dismissed. The Chargers and Raiders gave St. Louis the blueprint to successfully sue the Rams and the NFL over the relocation process, and how the Rams had plans to relocate well before they filed for it in late 2015.

Kroenke also argues that his billions of dollars reclaimed L.A. for the NFL, topped off by the well-received SoFi Stadium, and he should get some credit for that. This argument is invalid. His stadium may be making money for the NFL, capped off by Super Bowl LVI. However, this is not a valid argument. He relocated the team, and he did not follow the relocation guidelines. He had no plans to keep the Rams in St. Louis, he was on the Los Angeles committee as a minority owner. Kroenke looked out for himself, and himself only. These reasons are why his argument is invalid, and he should pay the $790 million settlement by himself.

The other side argues Kroenke agreed to indemnify the other owners, without which they would have never agreed to the Rams relocation. His franchise value has soared by billions of dollars, and he has a tremendous real estate opportunity in Hollywood Park.

When the NFL in December agreed to settle the St. Louis case, the resolution called for the issue of who pays to go to the finance committee. That has changed.

A source familiar with the NFL’s working stated the actual resolution and to settle a financial issue is the commissioner, with consultation with the finance committee determines who pays what. The finance committee did not want to take part in this issue, so they set up a special committee to determine who pays the $790 million settlement.

The 31 club owners (the Green Bay Packers are owned by shareholders) are a highly exclusive and powerful group, so typically they take great pains not to air their dirty laundry, but Kroenke clearly hit a sensitive spot for many owners. They believe he has exhibited bad faith by appearing to backtrack on his indemnification commitment.

Kroenke exercised his right to first refusal when he purchased the Rams from previous owner, Georgia Frontierre’s, heirs, her children. He is willing to spend cash to flex their muscle in a league run on a sharing philosophy (roughly 80 percent of revenues are shared).

Kaplan states the owners’ beliefs are being tested on the ad hoc committee on the St. Louis settlement money. The NFL team owner source on the committee appeared to concede the commissioner in the end would have to make a decision.

Kaplan concludes that the decision is unclear. From a money angle, there is no real pressure to decide: the league tapped a low-interest rate line of credit to pay St. Louis. But given the contentious voices behind closed doors at the annual meeting, the issue is far more than a minor accounting issue, but is one that speaks to how owners navigate their commitments to one another.

Alex Patterson is a 3L at Thomas M. Cooley Law School in Lansing, Michigan. He played football for seventeen years as an offensive and defensive lineman. He graduated from Lindenwood University-Belleville in 2018 with a Bachelor’s in Sports Management. He can be followed on Twitter @alpatt71.