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Big delay expected in St. Louis Rams sale
By Jim Thomas
ST. LOUIS POST-DISPATCH
04/14/2010
Whether Stan Kroenke is successful in his bid to purchase the 60 percent share of the St. Louis Rams franchise currently up for sale could depend on two factors:
— How strongly does the league want to maintain what's left of its cross-ownership policy?
— Where does Denver Broncos owner Pat Bowlen stand on the issue?
In any event, don't expect a quick resolution to the sale process now that Kroenke has exercised his right of first refusal. In essence, that gives him the right to match Shahid Kahn's bid to purchase the 60 percent share currently held by siblings Chip Rosenbloom and Lucia Rodriguez.
Even though he already owns 40 percent of the Rams, Kroenke must begin an application process to purchase the remaining 60 percent and must send in related paperwork to the NFL. League sources told the Post-Dispatch on Tuesday that it could be "several weeks" before the league has all the documents needed to begin evaluating Kroenke's bid.
And NFL Vice President Greg Aiello said the entire process could take several months before the league votes on Kroenke's bid, although he added that there is no precise timetable.
Had Kroenke simply decided to stand pat with his 40 percent share, while Khan went forward with his bid to purchase the remaining 60 percent, there were some indications from involved parties that the sale might have been concluded in May. That no longer appears to be possible, keeping in mind that even NFL owners and league staff members take some vacation time over the summer.
But at the core of the issue is the NFL's cross-ownership policy, which states as follows:
"No person who owns a majority interest in — or has direct or indirect operating control of — an NFL member club may own or acquire any interest in a club in another major team sport (baseball, basketball, and hockey) except for a club located in a.) His NFL club's home city, or b.) A non-NFL city that is not a potential NFL city."
There was a time when the league's cross-ownership policy was considerably more wide-ranging. But in a court battle that began in the late 1970s and spilled over into the early 1980s, the NFL was unsuccessful in its attempt to prevent then-Kansas City Chiefs owner Lamar Hunt and then-Miami Dolphins owner Joe Robbie from owning teams in the North American Soccer League.
Another softening of the cross-ownership policy occurred in the 1990s when H. Wayne Huizenga purchased the Miami Dolphins and Paul Allen purchased the Seattle Seahawks. At the time, Huizenga owned the Florida Marlins major-league baseball team and Florida Panthers National Hockey League team — both based in Miami. Allen owned the Portland Trail Blazers National Basketball Association team.
But in March 1997, the cross-ownership policy was amended, in part adding the exceptions listed above:
a.) His NFL club's home city.
That sentence took care of Huizenga and the Dolphins, Panthers and Marlins.
b.) A non-NFL city that is not a potential NFL city.
That sentence took care of Allen and the Seahawks and Trail Blazers.
But the policy wasn't changed on a whim. Huizenga's purchase of the Dolphins was approved in 1994 on the premise that if the league's cross-ownership policy wasn't changed by 1996, he would have to put the Dolphins up for sale.
Well, the policy wasn't changed by '96, so NFL Commissioner Paul Tagliabue gave Huizenga a one-year extension. Finally, the cross-ownership policy was amended in '97. With 30 teams in the NFL at that time, 23 yes votes were needed to change the cross-ownership rule.
It got 24 yes votes, barely passing, with Washington, Detroit, Chicago, Cincinnati and Buffalo voting no. Oakland abstained, so the final vote was 24-5-1. Newspaper reports at the time indicated that a key to getting the amended cross-ownership policy approved was Allen's promise to keep the Seahawks in Seattle if he got funding for a new stadium.
(Allen's bid to buy the Seahawks was approved in June 1997.)
Among the six clubs that did not vote yes in 1997, only Washington has a new owner today. The other five teams are still headed by the same family or individual. So it's quite possible that five of those "non-yes" votes wouldn't change if the league tries again to modify the cross-ownership rules to accommodate Kroenke, who owns the Denver Nuggets NBA team and the Colorado Avalanche NHL team.
Which brings us to Bowlen. Although generally viewed as rivals in the Denver sports market, Bowlen and Kroenke once were partners (along with former Broncos quarterback John Elway) in an Arena Football League team. They currently are partners in a major-league lacrosse team.
But those are small ventures compared to the "big four" of American professional sports: baseball, basketball, football and hockey. And Bowlen might not like the idea of Kroenke owning a controlling share of the Rams, and, in theory, using Rams dollars to help make the Nuggets and Avalanche more competitive in Denver.
It takes only nine no votes among the current 32 NFL teams to scuttle a league vote. Although not as powerful as he once was in league affairs, Bowlen remains an influential team owner. Through a team spokesman, Bowlen declined to comment on the Kroenke bid, referring all questions to the NFL office.
Of course, one possible out for Kroenke would be to simply transfer ownership of the Nuggets and Avalanche to a family member or business associate. Would that loophole be acceptable to the NFL?
"That cannot be answered until our office and the finance committee review the details of the proposed transaction," Aiello said.
Multiple sources familiar with Kroenke have indicated he is not interested in selling the Nuggets and Avalanche. His history as a businessman, whether it be a sports property or non-sports business, is as a buyer and a "keeper." He doesn't sell things once he buys them.
By Jim Thomas
ST. LOUIS POST-DISPATCH
04/14/2010
Whether Stan Kroenke is successful in his bid to purchase the 60 percent share of the St. Louis Rams franchise currently up for sale could depend on two factors:
— How strongly does the league want to maintain what's left of its cross-ownership policy?
— Where does Denver Broncos owner Pat Bowlen stand on the issue?
In any event, don't expect a quick resolution to the sale process now that Kroenke has exercised his right of first refusal. In essence, that gives him the right to match Shahid Kahn's bid to purchase the 60 percent share currently held by siblings Chip Rosenbloom and Lucia Rodriguez.
Even though he already owns 40 percent of the Rams, Kroenke must begin an application process to purchase the remaining 60 percent and must send in related paperwork to the NFL. League sources told the Post-Dispatch on Tuesday that it could be "several weeks" before the league has all the documents needed to begin evaluating Kroenke's bid.
And NFL Vice President Greg Aiello said the entire process could take several months before the league votes on Kroenke's bid, although he added that there is no precise timetable.
Had Kroenke simply decided to stand pat with his 40 percent share, while Khan went forward with his bid to purchase the remaining 60 percent, there were some indications from involved parties that the sale might have been concluded in May. That no longer appears to be possible, keeping in mind that even NFL owners and league staff members take some vacation time over the summer.
But at the core of the issue is the NFL's cross-ownership policy, which states as follows:
"No person who owns a majority interest in — or has direct or indirect operating control of — an NFL member club may own or acquire any interest in a club in another major team sport (baseball, basketball, and hockey) except for a club located in a.) His NFL club's home city, or b.) A non-NFL city that is not a potential NFL city."
There was a time when the league's cross-ownership policy was considerably more wide-ranging. But in a court battle that began in the late 1970s and spilled over into the early 1980s, the NFL was unsuccessful in its attempt to prevent then-Kansas City Chiefs owner Lamar Hunt and then-Miami Dolphins owner Joe Robbie from owning teams in the North American Soccer League.
Another softening of the cross-ownership policy occurred in the 1990s when H. Wayne Huizenga purchased the Miami Dolphins and Paul Allen purchased the Seattle Seahawks. At the time, Huizenga owned the Florida Marlins major-league baseball team and Florida Panthers National Hockey League team — both based in Miami. Allen owned the Portland Trail Blazers National Basketball Association team.
But in March 1997, the cross-ownership policy was amended, in part adding the exceptions listed above:
a.) His NFL club's home city.
That sentence took care of Huizenga and the Dolphins, Panthers and Marlins.
b.) A non-NFL city that is not a potential NFL city.
That sentence took care of Allen and the Seahawks and Trail Blazers.
But the policy wasn't changed on a whim. Huizenga's purchase of the Dolphins was approved in 1994 on the premise that if the league's cross-ownership policy wasn't changed by 1996, he would have to put the Dolphins up for sale.
Well, the policy wasn't changed by '96, so NFL Commissioner Paul Tagliabue gave Huizenga a one-year extension. Finally, the cross-ownership policy was amended in '97. With 30 teams in the NFL at that time, 23 yes votes were needed to change the cross-ownership rule.
It got 24 yes votes, barely passing, with Washington, Detroit, Chicago, Cincinnati and Buffalo voting no. Oakland abstained, so the final vote was 24-5-1. Newspaper reports at the time indicated that a key to getting the amended cross-ownership policy approved was Allen's promise to keep the Seahawks in Seattle if he got funding for a new stadium.
(Allen's bid to buy the Seahawks was approved in June 1997.)
Among the six clubs that did not vote yes in 1997, only Washington has a new owner today. The other five teams are still headed by the same family or individual. So it's quite possible that five of those "non-yes" votes wouldn't change if the league tries again to modify the cross-ownership rules to accommodate Kroenke, who owns the Denver Nuggets NBA team and the Colorado Avalanche NHL team.
Which brings us to Bowlen. Although generally viewed as rivals in the Denver sports market, Bowlen and Kroenke once were partners (along with former Broncos quarterback John Elway) in an Arena Football League team. They currently are partners in a major-league lacrosse team.
But those are small ventures compared to the "big four" of American professional sports: baseball, basketball, football and hockey. And Bowlen might not like the idea of Kroenke owning a controlling share of the Rams, and, in theory, using Rams dollars to help make the Nuggets and Avalanche more competitive in Denver.
It takes only nine no votes among the current 32 NFL teams to scuttle a league vote. Although not as powerful as he once was in league affairs, Bowlen remains an influential team owner. Through a team spokesman, Bowlen declined to comment on the Kroenke bid, referring all questions to the NFL office.
Of course, one possible out for Kroenke would be to simply transfer ownership of the Nuggets and Avalanche to a family member or business associate. Would that loophole be acceptable to the NFL?
"That cannot be answered until our office and the finance committee review the details of the proposed transaction," Aiello said.
Multiple sources familiar with Kroenke have indicated he is not interested in selling the Nuggets and Avalanche. His history as a businessman, whether it be a sports property or non-sports business, is as a buyer and a "keeper." He doesn't sell things once he buys them.
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