Leave it to Bernie to turn the Kroenke issue into a soap opera.

[AvengerRam_old]

Bernie is upset today. A huge story broke regarding the Rams' ownership situation and, not only did he fail to see it coming, he actually stated several times in the past that Kroenke would not exercise his right of first refusal.

In typical Bernie fashion, he has reacted by making the absurd comments:

I don't see how major decisions — and a full investment in the product — can be made when there's no one in charge. I don't know how we can expect fans to buy in — and buy tickets — when they have no idea of what to expect. It's a terrible situation. A complete mess.

The Rams have the No. 1 overall pick in the April 22 draft. How can we expect the kid to be signed in timely fashion with a rather extreme ownership crisis in effect?

After reading this, I am left with a question: is this mere pot stirring by Bernie or does he simply not understand how businesses work?

The Rams have an operating budget. That budget is managed by the Front Office. There is no question that the budget anticipates and accounts for expected expenses, such as rookie contracts.

In other words, the "limbo" status of the Rams sale will have exactly zero impact on the draft, and will have no noticeable impact on this upcoming season.

I find it hard to believe that Bernie is this ignorant. He must have noticed how many large corporations have gone through sales, mergers and even bankruptcy without any noticeable impact on the services they provide to the public.

The way Bernie describes it, you'd think that there's a sign on the front door of Rams Park reading "closed pending new ownership."

I am starting this thread for one, and only one reason: in the hope that the Clan will not get sucked into Bernie's paranoid nonsensical babblings and will, instead, relax while the sale works itself out.

If Kroenke - a very deep pocket and sports enthusiast - ends up with the team, we will likely see a positive impact. That might not happen until 2011 but, in the meantime, the sky will not fall.

[Rambunctious]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

Yea I don't get it. People think owning a team and running a team are the same thing. Yes there are you handful of owners that are extremely involved in the decision making process but the majority have little to do with the day in and day out operations of the franchise.

I also tend to think that the ones that are really hands on tend to hurt their team not help.

[harrydog]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

My guess is it's pot stirring and should be ignored.

[clarasDK]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

Ohhh are the Rams changing owners? Didn't notice. Lets get back to important talks. Suh or Bradford

[RebelYell]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

It reads like he wrote that article in 15 minutes.

[Azul e Oro]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

I totally agree with AV; just Bernie poking the Ram fanbase with his panic stick yet again as he smarts from being embarrassingly out of the loop... yet again.

I won't pretend to understand the high finance machinations of big business but doesn't common sense dictate that Kroenke would already have been concerned enough about his $300 mill+ investment in The Rams to make sure a short term lack of financial liquidity wouldn't hamper efforts to improve the Ram product during the ownership transfer process? It sounds like he could find that kind of coin down the back of his sofa.

[Truth]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

For goodness sake. It's not like the Rams don't have an owner. The team is up for sale, not rudderless.

[RAMFANRAIDERHATER]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

For goodness sake. It's not like the Rams don't have an owner. The team is up for sale, not rudderless.

The Rams may have an owner, but they haven't had a owner with both oars in the water since 1979. ;)

[AvengerRam_old]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

Bernie has now posted an article suggesting that:

1. Because Kroenke didn't mention in his press release that he intends to keep the team in St. Louis, he is considering the possibility of moving the team; and

2. The Rams can't make a trade like the one for Brandon Marshall because of the ownership situation.

What a load of crap (on both fronts).

If Kroenke was planning to move the team, don't you think he would have mentioned that, as doing so would likely elimate the whole cross-ownership issue?

And... did you ever think that the reason that the Rams didn't try to trade for Marshall was that they just don't think he's worth the draft choices and big contract acquiring him would require?

Bernie does not care about logic or facts. All he cares about is making Rams fans worry and complain. Don't fall into his trap.

[general counsel]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

I agree that the situation wont impact the draft. I dont agree that it wont impact other areas. Companies have operation budgets. Those budgets are reforcasted and changed all the time. They are not set in stone. They are not locked in. They are typically done at the end of the prior fiscal year and as a general rule, will change when material subsequent events (ie a contract to sell the team) occur.

I dont care what the rams say publicly. In my experience in dealing with transactions of this type (and this is what i do all day every day and have done so for the last ten years), companies often flounder during this type of uncertainty and the outgoing owners operating budget tends to tighten quite a bit. The Rams are under more public scrutiny than the average company, but they are still a private company, not subject to public disclosure requirements. They are NEVER going to admit that they are cutting back on spending or changing their decision making. The sale contract will likely obligate them to operate "in the ordinary course of business consistent with prior practice" but their is a lot of latitude in that term and contracts are all over the map in terms of how much specificity is included in the interim conduct of business covenants.

The rams are not going to spend money without considering the impact of the sale in every decision they make THeir decision making is impacted by the terms of the sale contract, which is not a public document. Chip has no incentive to spend money that relates to the future and he will spend what he has to, but not much else. The rams will not stop signing players completely, but at the margain, they are going to be less active in free agency and resigning their own guys, especially as it relates to large up front payments, which the seller does not get back.

Lots of speculation on the board on this topic, but bernie is not as far off as you might think on this one.

ramming speed to all

general counsel

[general counsel]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

THe odds of the rams making a marshall type trade with the ownership situation up in the air are very low. I agree completely with bernie on that point, because chip has no incentive to lay out 21 million in bonus money which he wont get back. Long term contratual commitments are pure speculation, every deal is different in that regard. You would have to see the sale agreement to understand the contractual issues. As a practical matter, its just not likely that chip will lay out that kind of cash. not impossible, but certainly not "a load of crap"


ramming speed to all

general counsel

[AvengerRam_old]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

There's a big difference here, though. Even though there is no cap this year, based upon prior caps, it would have been no problem to determine how much money needed to be put aside for player salaries. Once that budget is set, its up to the Front Office to work within that budget (Demoff confirmed that this budget was set in December/January) in a prior interview).

If the Rams wanted to, for example, trade for Albert Haynesworth, they could easily determine whether his salary fits within the operating budget.

You seem to presume that the Front Office would have to go outside the budget and go to Chip in order to sign a high-end player. That is not necessarily the case. It is entirely possible that the Rams could do so within their budget (don't forget, the Rams were going to be well under the cap had it continued).

You also make this argument:

THe odds of the rams making a marshall type trade with the ownership situation up in the air are very low. I agree completely with bernie on that point, because chip has no incentive to lay out 21 million in bonus money which he wont get back.

You are forgetting one thing: Chip does not own 100% of the team. Forty percent is already owned by Kroenke. So its not correct to say that Chip alone would be laying out the bonus money.

Ultimately, you and Bernie are operating on two presumptions: that ownership would have to be consulted for a significant trade/signing to be made, and that Chip would reject such a deal. I think those are presumptions that simply can't be made conclusively from the facts. Do you really think that if the Colts called up and said "we'll give you Peyton Manning and Reggie Wayne for the first pick in the draft" that Devaney would have to say, "Gee, I'd like to but its outside my budget to pay their salaries and I have no way of getting more cash."?

In the end, though, my beef is with Bernie's presentation. The part that is complete crap is his implication that, but for the ownership issue, the Rams would have pursued Marshall. There is no indication whatsoever that the Rams were interested (most NFL teams were not interested). The only reason he makes a statement like that is to stir up the fans, many of whom are already prone to negativity and distrust of the organization.

[Bralidore(RAMMODE)]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

In the end, though, my beef is with Bernie's presentation. The part that is complete crap is his implication that, but for the ownership issue, the Rams would have pursued Marshall. There is no indication whatsoever that the Rams were interested (most NFL teams were not interested). The only reason he makes a statement like that is to stir up the fans, many of whom are already prone to negativity and distrust of the organization.

Though i usually tend to disaprove of the Bernie Bashing, i have to say i totally agree here. Stuff like that is used to turn heads and cause questions and doubt in fan's minds, stirring up crap. I hate that type of "journalism", especially when its completely unfounded and speculation. The fanbase here is really fickle these days when it comes to the Rams and really has no mercy. Whenever something bad happens its "typical Rams" or "Here we go again..." mentality and it pisses me off. On the FO, its much like it is around this site, in Saint Louis. People are very hesitant to accept the FO, and are very critical when they disagree. Optimism for Rams fans as a whole are traditionally low since the fall of the GSOT however. Can't just blame STL for that.

[general counsel]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

Av, you are missing a couple of points (and in advance, i concede that i have not seen the rams limited partnership agreement). First, it would be very rare for a 40% owner to have a say in setting the operating budget. I am not saying it doesnt happen, i am stating that in my experience, its the exception rather than the rule. The budget is typically approved by the board. The majority owner controls the board. THe minority rarely has an ability to impact that type of decision. Typically, the majority makes the decision on expenditures of a significant nature and if there is a capital call required of the shareholders and one shareholder doesnt fund his share, he is either crammed down (diluted), suspended from getting distributions or both (or other harsh remedies).

Second, i dont assume that the rams would have to go outside the operating budget to get haynsworth. I am assuming that the operating budget is suspect and subject to change at any given time, regardless of what the rams say publicly. The rams have no obligation to manage to an operating budget. Just because demetroff says it publicly doesnt make it true. THe public statement is not uncommon in my experience.

I again acknowledge that i dont know what the deal is between kroenke and chip i am only telling it like it is in terms of what is typical in deals like this and pointing out that while bernie may not be correct (because he hasnt seen the docs either and doesnt know crap about what is really going on) his arguments are not complete crap and in my experience in this area, have a strong ring of truth to them.

ramming speed to all

general counsel

[AvengerRam_old]

Re: Leave it to Bernie to turn the Kroenke issue into a soap opera.

Av, you are missing a couple of points (and in advance, i concede that i have not seen the rams limited partnership agreement). First, it would be very rare for a 40% owner to have a say in setting the operating budget. I am not saying it doesnt happen, i am stating that in my experience, its the exception rather than the rule. The budget is typically approved by the board. The majority owner controls the board. THe minority rarely has an ability to impact that type of decision. Typically, the majority makes the decision on expenditures of a significant nature and if there is a capital call required of the shareholders and one shareholder doesnt fund his share, he is either crammed down (diluted), suspended from getting distributions or both (or other harsh remedies).

I wasn't suggesting that Kroenke has a vote at this point. I was suggesting that the a large signing bonus does not only come out of Chip's pocket. It comes out of both of their pockets, as they both own part of the team.

Second, i dont assume that the rams would have to go outside the operating budget to get haynsworth. I am assuming that the operating budget is suspect and subject to change at any given time, regardless of what the rams say publicly. The rams have no obligation to manage to an operating budget. Just because demetroff says it publicly doesnt make it true. THe public statement is not uncommon in my experience.

You are making an assumption, though, that is based upon different business models. With respect to a player salary budget, if the Rams suddenly went bare bones, it would be public knowledge, and there would be a huge P.R. backlash (think the Marlins after they won their first World Series).

I think its a fair assumption that the Rams set a budget for player salaries that was in line with the previous salary cap, and that the current Front Office has discretion to work within those parameters.

his arguments are not complete crap and in my experience in this area, have a strong ring of truth to them.

Isn't that the worst kind of lie, though... the one that has a kernal of believablity to it?

My main point is that, in the couple of days since Bernie was blindsided (and, frankly, a bit embarrassed)by the Kroenke story, he has come out with statements suggesting that (1) this will make it hard for the Rams to sign their first pick, (2) this will force us to re-evaluate the issue of the Rams moving from St. Louis (notwithstanding that Kroenke has strong ties to Missouri), and (3) that this is essentially the reason why players like Brandon Marshall won't be playing for the Rams.

I don't think its too hard to see Bernie's motivation here.