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Burwell: NFL Can Bend Cross-Ownership Rules For Stan Kroenke

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  • Burwell: NFL Can Bend Cross-Ownership Rules For Stan Kroenke

    NFL can bend cross-ownership rules for Stan Kroenke

    By Bryan Burwell
    ST. LOUIS POST-DISPATCH
    04/14/2010


    Because 15 years worth of history has conditioned us to expect an endless supply of soap opera silliness, unpredictable cloak-and-dagger intrigue and mind-numbing misfortune with just about everything at Rams Park, I'm still not quite sure why none of us anticipated this wild throw from left field.

    It is the Rams we're talking about, so how else could a so-called streamlined, by-the-numbers sale of the franchise go but whirling into a shocking Barbarians at the Gate tailspin?

    OK, this is not quite as contentious as that notorious business deal, but oh, boy, it sure is starting to have that sort of provocative feel. Minority owner Stan Kroenke's bold attempt to take over 100 percent control of the Rams is being played out on the sports pages, but it could end up on the pages of The Wall Street Journal or maybe even a tantalizing made-for-TV screenplay as time goes on.

    This 11th hour move by Kroenke was a quintessential, big-time high-finance power play, but we'll just have to wait a little longer to see what else the multibillionaire has up his sleeves. Was this a stroke of pure strategic genius, a ruthless act of conspicuous consumption, or does Kroenke's business mind really work so many steps ahead of the rest of us that we're automatically conditioned to come up with Machiavellian motivations and miss the simplest one of all: Does Stan just want to be a full-fledged member of America's most exclusive billionaire sports lovers' club, NFL ownership?

    Looking at his business history, Kroenke has carefully built his $2.9 billion empire in real estate and by collecting professional sports franchises like we get fancy watches. He has at various times owned one of each in the NBA and NHL (Denver Nuggets and Colorado Avalanche respectively), professional soccer (Colorado Rapids and Arsenal), major league lacrosse (Colorado Mammoth) and a 40 percent stake in the Rams for the last 15 years.

    And now he's decided that he wants more. And now he's asking the NFL, which supposedly has plenty of rules standing in his way, to do what it has done quite a few times in the past.

    Bend its rules to accommodate a good friend.

    NFL Commissioner Roger Goodell has already told everyone that the rules on cross-ownership won't be bent for Kroenke or anyone else. Rules are rules, the commish says, and since we have rules, well, we have to actually abide by them.

    And for the most part, that's true, except when it isn't.

    The NFL used to have a rule that prohibited its owners from owning any other franchise in another professional league.

    And then they changed that.

    And then it had a rule that said you could only do cross-ownership as long as it was in the same town as your NFL franchise.

    And then they changed that.

    And then they said that if you were going to have controlling interest in an NFL franchise, the minimum percentage you had to own was 30 percent.

    But then they changed that, too.

    So we now have an NFL ownership fraternity that allowed Paul Allen, who has owned the NBA Portland Trail Blazers since 1988, to buy a majority stake in the NFL Seattle Seahawks in 1997. And there's Wayne Huizenga, who during a six-year period from 1993-98 owned three major sports franchises in the city of Miami the NFL Dolphins, baseball's Marlins and hockey's Panthers.

    And last October, in reaction to the difficulties the Rooney family experienced in retaining ownership of the Pittsburgh Steelers, the league revised its rules to assist current owners with future succession plans to help keep family ownership intact.

    So in other words, when it comes to strict rules concerning ownership, the NFL doesn't necessarily view them as hard and fast rules but rather as extremely flexible guidelines.

    Apparently, in the NFL, where there's an ownership rule, there's also a loophole.

    But it has to be the right person to leap through those loopholes. Some owners get favored nation status, while others get treated like stepchildren in a fairytale.

    Unfortunately, right now we don't really know what sort of juice Kroenke has in ownership circles.

    But if we know anything about NFL owners, we do know that Kroenke doesn't have to be a big political wheeler dealer as long as he's connected to someone who does have the necessary political cache. The current majority owner, Chip Rosenbloom, does have the clout of an old-school NFL name in his pocket, and we might be about to find out how much weight the Rosenbloom name still carries in ownership corridors.

    If it looks like the Rams sale could go south (and more important, the franchise could go West, if you get my drift), and if Kroenke is the last best hope of keeping the whole thing intact, I just don't get why the NFL wouldn't be willing to do a little bending in the name of Rosenbloom (or the semi-retired John Shaw, their owner-by-proxy who is always lurking in the political shadows).

    Maybe it won't even take the crafty boardroom wheeling and dealing to allow Kroenke to get his 100 percent stake approved. Maybe he will simply test the political waters, then take the path of least resistance to league approval (which could mean handing off ownership of his stake in his Denver sports holdings to his equally wealthy wife and children).

    But it just seems to me that since Kroenke's already in the inner sanctum, already has proven to have more money than most developing nations, and his cross-ownership in the NBA and NHL isn't hurting anyone, maybe this is the perfect time for the NFL to do a little limbo under the cross-ownership rules once again.

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  • MauiRam
    Will Kroenke make a sweetheart deal?
    by MauiRam
    By Jim Thomas
    ST. LOUIS POST-DISPATCH
    04/18/2010

    Stan Kroenke's attempt to finesse the NFL cross-ownership rules may not involve a transfer of hockey and basketball teams in Denver to his family. But rather a sale to his wife, Ann.

    According to a couple of league sources that tactic could be Kroenke's best hope of getting the NFL to approve his attempt to purchase the 60 percent of the Rams currently up for sale by siblings Chip Rosenbloom and Lucia Rodriguez.

    As wealthy as Kroenke is, he comes in second place at home. At $2.9 billion, he was ranked No. 342 on Forbes' most recent annual list of world billionaires. His wife, Ann, heiress to much of the Wal-Mart fortune, was ranked No. 297 at $3.2 billion.

    So what happens if Ann Walton Kroenke "simply" writes a check for the Denver Nuggets NBA team and the Colorado Avalanche NHL team? How does the NFL react to that?

    "Independent wealth means a lot," one league source said.

    And that's what Ann Walton Kroenke has.

    So at face value, that option might be more palatable to league owners than having Kroenke simply transfer ownership of the Nuggets or Avalanche to some combination of his wife, his son, Josh, or daughter, Whitney.

    When asked if that would be an acceptable path, NFL senior vice president Greg Aiello replied: "I can't answer that question. It's not my question to answer. That's something that has to be decided by NFL ownership. And right now, they can't answer that because they don't know what he's proposing."

    Even those close to Kroenke believe Kroenke has yet to decide on a precise path to finesse the cross-ownership rules.

    But one avenue seems definitely closed: selling the Denver teams to an outsider. Whether it's sports properties or other business properties, Kroenke's history has been as a buyer and a keeper not a seller of assets. And because he also owns the building the Nuggets and Avalanche play in the Pepsi Center it has proved to be a profitable setup.

    If Kroenke sold the Nuggets and Avalanche to his wife, it appears he could maintain ownership of the Pepsi Center. There's nothing in the NFL's cross-ownership rules that would prevent him from keeping the venue. So that would make the purchase cheaper for his wife.

    In 2000, just a few months after the St. Louis Rams defeated Tennessee in Super Bowl XXXIV, Kroenke purchased 93.5 percent of the Avalanche, Nuggets and Pepsi Center. The overall value of those assets at the time was $450 million.

    It is a violation of the NFL's cross-ownership rules for Kroenke to own the Nuggets and Avalanche once he has controlling interest in the Rams. Kroenke already owns 40 percent of the Rams; he will own the full 100 percent of the team if he's successful in his bid to buy Rosenbloom's and Rodriguez's 60...
    -04-18-2010, 12:20 PM
  • MauiRam
    Kroenke plays it close to the vest ..
    by MauiRam
    BY JIM THOMAS
    ST. LOUIS POST-DISPATCH
    03/23/2010

    ORLANDO, FLA. The day's business concluded, Stan Kroenke walked out of the NFL owners' meeting room Monday evening with Rams senior consultant John Shaw at his side.

    About the last person Kroenke wanted to see in this venue was a reporter. He has always been what's best described as media shy and that's particularly the case now that Urbana, Ill., businessman Shahid Khan has entered into an agreement to purchase controlling interest in the Rams.

    So what will Stan do? Buy, sell or stand pat? Kroenke didn't tip his hand Monday, saying he continues to consider his options.


    "We're all talking about our different approaches here, trying to come up with the best approach for everyone involved, I think," Kroenke said.


    He also indicated that he will take the full 60 days, or very close to it, to decide what to do.

    "I think that it's prudent to think through your options," Kroenke said. "These are big decisions. We're going to try to do the right thing."

    Kroenke said he really couldn't say anything more until the process plays itself out.

    Kroenke currently owns 40 percent of the Rams. He can decide to:

    Stand pat and maintain his 40 percent share of the Rams.

    "Cash out" and sell his 40 percent share.

    Exercise his right of first refusal, in essence matching Khan's offer for the team.

    In reality, Kroenke probably has only two options: maintain his 40 percent share or sell it. Because in pretty strong language Monday, NFL Commissioner Roger Goodell indicated that the league wasn't inclined to bend its cross-ownership rules to allow Kroenke to match Khan's offer.

    "Let's cross that bridge when we get to it," Goodell said. "But I don't think so. I think everyone understands we're going to respect our policies and make sure we treat everyone the same.

    "We have great respect for Stan, and he has to make some choices. But he also understands the league wants to continue to have policies that we think are beneficial to the league in general and fair to all 32 clubs."

    The cross-ownership rule prevents owning a controlling share in an NFL team in one market while owning majority interest in another major-league team (baseball, basketball, hockey) in a competing NFL city.

    Kroenke owns the Denver Nuggets of the National Basketball Association and the Colorado Avalanche of the National Hockey League.

    As part of Khan's Rams sale agreement Feb. 12, Kroenke has 60 days to declare his intentions with respect to Rams ownership. April 12 is three weeks away, so the time for making a decision is drawing near.

    The "vetting" of Khan and the entire sales...
    -03-23-2010, 09:50 AM
  • AvengerRam_old
    Kroenke Gaining Ground in Bid to Buy Rams
    by AvengerRam_old
    This is good news:...
    -05-25-2010, 07:33 AM
  • Molotov
    Rams Un-sellable?
    by Molotov
    First of all, it is interesting how little coverage this Ram sale is getting. But what I wanted to talk about is this: If Kroenke continues to evoke his right of first refusal, and the NFL does not waive the cross ownership rule, THEN what happens? It would seem to me that the sale could not occur. In fact, I don't see how ANY sale could occur if Kroenke insists on owning 100%. It's in his contract, and that is independent of the NFL rules.

    Am I right?
    -04-20-2010, 02:25 PM
  • r8rh8rmike
    St. Louis Rams' Hands Are Tied Pending Sale
    by r8rh8rmike
    St. Louis Rams' hands are tied pending sale

    By Bryan Burwell
    ST. LOUIS POST-DISPATCH
    05/12/2010


    Watching billionaire minority owner Stan Kroenke go through the latest machinations in his effort to acquire 100 percent control of your St. Louis Rams makes me understand that apparently filthy rich men are no different from the rest of us when it comes to the American male's obsession with acquiring "stuff," even if that "stuff" just happens to be an $800 million NFL franchise.

    Yet Kroenke seems to be turning the relatively simple task of buying the Rams into a convoluted adventure that reminds me of a gluttonous kid who rolls into the candy store with a fistful of dollars but can't quite figure out how he will be able to haul out all the jellybeans, maltballs and Twizzlers he just bought, even though all he has to do is just hand his half-eaten sandwich and half-empty soda pop to his salivating baby brother.

    Enough already. Just buy the darned team, will ya?

    Kroenke has enough money to own just about anything he wants twice over, but for some reason he seems to have a hard time getting this deal done. This could have been done two years ago when Chip Rosenbloom and Lucia Rodriguez first inherited the Rams from their mother, Georgia Frontiere. But Stan sat back and waited until someone else expressed interest in the team, came in at the 11th hour, blocked Shahid Khan's ownership bid, then spent the last few weeks bobbing and weaving his way around the NFL's prohibition on cross-ownership of pro franchises.

    So now we learn that Kroenke's latest plan to circumvent the rules involves trying to pass the check over to his filthier rich wife, Ann, even though the chance of that flying through the NFL's scrutiny without dispute seems to be unlikely. The NFL has already balked at granting Kroenke any favors on the cross-ownership front and now indicates it won't rule on his ownership efforts later this month, which means the process could drag on all summer or even longer.

    And you know what that means, don't you?

    Kroenke's plans are botching up the already daunting task of rebuilding this moribund franchise.

    No matter how much general manager Billy Devaney and team president Kevin Demoff swear that they have not been hamstrung by the ownership being in limbo, we have to know better. Our own Jim Thomas has said that he's had several conversations with agents who have been told by Rams officials that they can't get business done on the free agent marketplace because they don't have the cash to make deals.

    No matter how much Rosenbloom says that he hasn't put the clamps down on spending, think about it. If you were selling a house, how much would you be willing to spend beyond the most superficial improvements?

    So now might be a good time for NFL Commissioner...
    -05-12-2010, 11:01 AM
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