Kroenke waiting for move on Rams

[MauiRam]

Bernie Miklasz bjmiklasz @post-dispatch.com 314-340-8192
ST. LOUIS POST-DISPATCH
06/14/2009

One of the more compelling aspects of the Rams' sale is the role of Stan Kroenke in the proceedings. Rams owners Chip Rosenbloom and Lucia Rodriguez, team insiders and other NFL executives and owners are wondering: what is Kroenke going to do? Is he going to make a play for control of the team? And if so, when?

Don't expect Kroenke to lay his plan out for us. He's staying underground on the Rams' front and not returning media calls. He's not about to give away any clues on his Rams' strategy.

Kroenke, worth an estimated $3 billion, is a busy sports mogul. He owns 40 percent of the Rams. He owns the NBA Denver Nuggets, the NHL Colorado Avalanche and the Pepsi Center in Denver. He owns the Major League Soccer franchise in Colorado and the stadium that houses the team. He is the majority shareholder (28.3 percent) of the prestigious Arsenal soccer club in the English Premier League. Kroenke owns a pro lacrosse team, an arena football team, and a Colorado-based cable-sports network.

And Kroenke's real-estate development company continues to prosper, making him one of the nation's wealthiest individuals according to Forbes magazine.
So does Kroenke want to buy the available 60 percent ownership block and challenge NFL rules that prohibit cross ownership? Or is he content to hang onto his 40 percent, oversee his other sports properties, concentrate on accumulating more Arsenal stock and avoid a skirmish with the NFL?

After speaking to a couple of Kroenke associates — sorry, no names — I think I have a general handle on his approach. But I can't be sure. Remember, this is the same Kroenke who made no noise about being interested in the Nuggets and the Avalanche, only to swoop in and buy them at the end of the process. Kroenke waited until the collapse of Bill Laurie's tentative deal for the teams, then made his move. And Laurie is Kroenke's brother-in-law, but Laurie knew nothing of Kroenke's intentions.

I believe Kroenke will sit and wait for others to make the first move.

It makes sense, because Kroenke has the right of first refusal on the Rams' sale. He can match any offer for the available 60 percent. By hanging back, Kroenke won't set the market and take the risk of bidding against himself to meet Rosenbloom's price. Instead, it's smarter for Kroenke to wait for another interested party to set the market, then react accordingly.

If another bidder makes an offer on the lower side, and the price is acceptable to Rosenbloom, then Kroenke can match the offer and get a relative bargain. He can save millions of dollars on the purchase. If Kroenke gets a great deal, then he may be more inclined to fight the league over that 60 percent.

And what if another bidder rushes in and pays whatever Rosenbloom-Rodriguez are asking for? Well, Kroenke can ask to be bought out (his 40 percent) at the same rate. Or he can keep his 40 percent, satisfied in knowing that the value of his ownership share just went up. A win-win for him.

And there could be other advantages for Kroenke to remain patient:

— If this process drags out — which it might, considering the struggling economy and concerns over the league's serious labor issues with the players — Rosenbloom may have to settle for a buyer that the NFL doesn't like or want. And the NFL could turn to Kroenke to ask for his help — buy the 60 percent and pull the league out of a bad situation. In exchange, the NFL would accommodate Kroenke by waiving the cross-ownership rules.

— If no local buyer comes forward, and the Rams are in danger of being sold to anti-St. Louis interests, Kroenke could ride in at the end and save the day. The city's political and business community would be grateful. And that would serve to help Kroenke in the looming strife concerning the team's lease at the Edward Jones Dome.

If Kroenke wants the Rams, would he be willing to sell his Denver teams to comply with NFL rules? I'm told that's doubtful. But I'm told Kroenke will try to lobby NFL owners to get the rule changed. So he might be willing to challenge the league over this issue.

In Kroenke's case, the NFL rule is stupid, because he already owns 40 percent of the Rams. The NFL insists that a lead ownership partner have a minimum share of 30 percent, and Kroenke already has that, plus another 10 percent. So isn't this pretty silly?

And why would it matter if Kroenke kept his 40 percent but lined up multiple investors to purchase smaller shares that add up to the other 60 percent?

Besides, it's not as if Kroenke needs Rams profits to be able to compete in the Denver sports marketplace against Pat Bowlen, who owns the NFL Denver Broncos. Kroenke and his wife, Anne, are worth a combined $7 billion. They don't need Rams' dollars. This is lunacy.

Kroenke is just what the league wants in an owner. He's a successful billionaire. And he's already in the club.

It will be fascinating to see how Kroenke plays poker. But if history tells us anything, it's that the cool-headed Kroenke is highly capable of waiting and watching the other players blow themselves up. That's when Kroenke scoops up the enormous pile of chips in the middle of the table.

[general counsel]

By a massive magnitude, Kroenke buying a controlling interest in the Rams is the best outcome for the team. He is a committed owner who will hire professionals to run the team and he wont meddle. He has the deepest possible pockets. I agree with Bernie's assessment that Kroenke will take a wait and see approach because its the only deal strategy that makes any sense under the circumstances. The odd element to all of this is that the worse the rams situation looks, the cheaper the team will get and the better the deal will ultimately get for Kroenke.

Ramming speed to all

general counsel

[MauiRam]

By a massive magnitude, Kroenke buying a controlling interest in the Rams is the best outcome for the team.

I love it!! Couldn't agree more GC ...

[RamsFanSam]

...and, if Kroenke buys the team, the team will have one thing we desperatley need -

STABILITY!

[laram0]

Let the games begin!

[RAMFANRAIDERHATER]

I too believe that Stan can be the man (did I just say that?) and save the Rams in St. Louis. I also believe he's the best candidate yet identified as a possible controlling owner. He has the bucks, for sure, and he loves sports.

This is going to get real interesting.

[bigtiger737]

Yes!!!!!!!! I hope he does it..

[MoonJoe]

I am curious as to why Kroenke hasn't stepped out more with this issue. To me it would almost be a slam dunk that he would try to make the team more stable, and help them secure new ownership. Isn't he working with Chip and Lucy on this? Why did they go public as far as not getting any local interest in the team? I think he is based in Denver, but as a 40% owner, I already consider him local, so is he not in the running? Weird...

[TekeRam]

MoonJoe, the whole point of the article is that it makes no sense for Kroenke to be vocal at this point in the game. First off, at the present time he CAN'T be the majority owner of the Rams because he owns sports teams in another city. Second, to get the best possible deal, and he has no specific loyalties to the Rosenblooms that I know of, he might as well wait and see where the market goes on this. If they get desperate for a sale, then he can swoop in with his billions. If they get a reasonable offer, he can refuse the sale and offer them the same value. Stan gets no benefit for doing anything but waiting and watching for now.

[ScottD413]

Kroenke can't own the Rams. He isn't going to part with one of his Denver teams in order to own them, and I don't see the NFL changing it's rule for the sake of one guy. Why would they? What would they have to gain?

[supachump]

Kroenke can't own the Rams. He isn't going to part with one of his Denver teams in order to own them, and I don't see the NFL changing it's rule for the sake of one guy. Why would they? What would they have to gain?

From what I understand. They don't have to "change the rule" for the sake of one guy. They can simply make an exception. Which I think I've read somewhere, has been done with many other NFL rule issues.

[MoonJoe]

MoonJoe, the whole point of the article is that it makes no sense for Kroenke to be vocal at this point in the game. First off, at the present time he CAN'T be the majority owner of the Rams because he owns sports teams in another city. Second, to get the best possible deal, and he has no specific loyalties to the Rosenblooms that I know of, he might as well wait and see where the market goes on this. If they get desperate for a sale, then he can swoop in with his billions. If they get a reasonable offer, he can refuse the sale and offer them the same value. Stan gets no benefit for doing anything but waiting and watching for now.

Hey Teke,

I get all that, what I don't get is why the family went to the press and why they are not working with Kroenke on this. It's almost like he isn't a part of the decision process and at 40% ownership I would think he would be...just thinking out loud, that's all...