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Bernie: A Look At Kroenke's Strategy
05.10.2010 11:00 am
Bernie Bytes: A Look at Kroenke’s Strategy
By Bernie Miklasz
The latest twist in Stan Kroenke’s pursuit of the Rams comes from Daniel Kaplan of The SportsBusiness Journal. Kaplan reports that Kroenke is attempting to get around the NFL’s cross-ownership rules by turning the team over to his wife, Ann Walton Kroenke. According to Kaplan, Kroenke pitched that proposal last week during a meeting with the NFL Finance Committee, which is overseeing the sales process. The SBJ reported that Kroenke’s proposal included other options, but no specifics were cited.
Kroenke owns 40 percent of the Rams and opted to match Shahid Khan’s bid to purchase the controlling 60 percent interest from Chip Rosenbloom and Lucia Rodriguez. But because Kroenke owns the NBA Denver Nuggets and NHL Colorado Avalanche, teams that compete for Denver sports dollars with the NFL Broncos, he is prohibited from owning an NFL franchise in another market.
Jim Thomas of the St. Louis Post-Dispatch reported that Kroenke would likely try to circumvent the rules by selling or transferring the Nuggets and Avs to his wife. And that option is still on the table for consideration, NFL sources say. But Kroenke seems to be exploring every possible angle in an attempt to satisfy the NFL. Kroenke’s apparent willingness to transfer or sell the Rams to his wife is just the latest scenario to be floated.
Let’s take a look. Here are some of my initial thoughts:
* Ann Kroenke certainly has the money to buy the Rams; she’s listed on the Forbes annual survey of the wealthiest Americans with an estimated worth of $3.2 billion. (Kroenke’s estimated worth is $2.7 billion.) But it isn’t so simple.
* The Rams’ ownership agreement stipulates that Stan Kroenke has the right of first refusal on the Rams’ sale. Not Ann Kroenke. Stan Kroenke had the right to match Khan’s bid. Not his wife. So on the surface, how could the NFL allow this?
* Or is the NFL willing to compromise by agreeing to let Kroenke match and take over as the 100 percent owner of the Rams as long as he agrees to quickly sell the team to his wife?
* Why didn’t Ann Kroenke simply bid for the Rams at the time the Rosenblooms had their 60 percent share on the market? This would have been easier than (A) having Stan Kroenke match Khan and (B) Kroenke having to work around the cross-ownership guidelines. (Likely answer: the Kroenkes didn’t want to get in a bidding battle with Khan that would drive the price up; they probably preferred to wait, let Khan make a reasonable bid, then match. I’m only guessing here.)
* Do any of these possible scenarios really satisfy the spirit of the NFL rule on cross ownership? Let’s say Kroenke sells the NHL and NBA teams to his wife, or transfers them to his son, Josh. Fine. But the Nuggets-Avalanche and Pepsi Center revenues would still stay in the Kroenke family. And does anyone think that Stan Kroenke would recuse himself from major decisions that have to be made with the Nuggets and Avalanche? Does anyone think Kroenke would stay away? That’s especially true of the Nuggets. Stan is an NBA fanatic. He loves that team and is a regular visitor to Nuggets’ practices and shootarounds. So is Stan really going to keep a distance from the Nuggets? OK, let’s say Kroenke sells the Rams to his wife. Do we really believe that he’d be on the outside, uninvolved with major decisions and transactions at Rams Park?
The Kroenkes would be very attractive owners for the Rams franchise. So what it comes down to is this: is the NFL willing to look the other way? If the NFL isn’t willing to look the other way, I don’t see how any of this flies. And really, that’s what all of this will come down to. All of these scenarios and potential solutions lead to the same destination: the NFL owners will determine just how important it is to them to have Stan Kroenke own the Rams, and the owners will determine just how far they are willing to go to bend or relax the rules for Kroenke.
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