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Will Kroenke make a sweetheart deal?

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  • Will Kroenke make a sweetheart deal?

    By Jim Thomas

    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 percent.

    Several days ago, Aiello let it be known that Kroenke was not asking the league to waive its cross-ownership rules. At the time, it seemed like Aiello was simply responding to part of Kroenke's statement made Monday in announcing his intention to match Shahid Khan's bid to buy the Rosenbloom-Rodriguez 60 percent.

    But Aiello later confirmed to the Post-Dispatch that Kroenke had made this known to the league prior to Monday's surprise.

    "He's previously advised us that he would not request a waiver of the cross-ownership policy and would respect league rules," Aiello said. "We have no reason to believe at this point that he would change his position."

    But short of selling the Nuggets or Avalanche to an outsider, a successful conclusion for Kroenke will require a bit of "suspended belief" by league owners. Why? Because any transfer or sale to family members still in essence keeps the Nuggets and Avalanche in his home. If not technically violating the cross-ownership rules, some NFL team owners might think it violates the spirit of the rule.

    So as one league source said, this will be a negotiation between Kroenke and the NFL.

    "It comes down to if the league wants to help Stan find a path," the source said.

    Particularly, Denver Broncos owner Pat Bowlen, whose market would be most affected — next to St. Louis — by Kroenke's Rams purchase attempt.

    It's true that Bowlen and Kroenke have partnered on some smaller-dollar sports teams in the past — major-league lacrosse and Arena League football. But on a much bigger financial stage, Bowlen was part of a group that was outbid by Kroenke in 2000 for the Nuggets, Avalanche and Pepsi Center.

    According to newspaper reports at the time, Bowlen and members of his group weren't happy about the bidding process, suggesting that Kroenke got preferential treatment to close the deal quickly.

    Bowlen remains one of the NFL's most influential owners. Although he has declined comment publicly on the matter, his feelings on the entire Kroenke/cross-ownership issue could be critical over the next several months.

  • #2
    Re: Will Kroenke make a sweetheart deal?

    Other than mere spite or ego, can anyone explain why Bowlen would try and nix Stan's buying the Rams? Just exactly what is the "cross ownership" rule protecting - especially in this day and age where most games are viewed on tv anyway. Perhaps GC, Av or Nick might weigh in on this one for those of us who need some clarification on this issue ...


    • #3
      Re: Will Kroenke make a sweetheart deal?

      i don`t understand the cross ownership rule either..seems to me that it must be written somewhere that the NFL has to have X amount of rules in place and the majority of rules are created just so that number is met.
      it also seems to be un-american and a tad "commie" to prevent individuals to spend their money however they wish.


      • #4
        Re: Will Kroenke make a sweetheart deal?

        Because of Revenue Sharing (most money generated by NFL teams goes into a pot, and then divided 33 ways {32 teams and the league office}). If Stan spent some of his NFL money to advertise a Nuggets or Avalance game that conflicts with a donkey's game, Bowlen would be in affect competing against himself for marketing dollars.



        Related Topics


        • MauiRam
          Kroenke waiting for move on Rams
          by MauiRam
          Bernie Miklasz bjmiklasz 314-340-8192

          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...
          -06-14-2009, 11:26 AM
        • MauiRam
          Kroenke plays it close to the vest ..
          by MauiRam
          BY JIM THOMAS

          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
        • r8rh8rmike
          Bernie: A Look At Kroenke's Strategy
          by r8rh8rmike
          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...
          -05-11-2010, 12:01 PM
        • r8rh8rmike
          The Big Question: What's With Kroenke?
          by r8rh8rmike
          The Big Question: What's with Kroenke?
          April, 13, 2010
          By Mike Sando

          What does Rams minority owner Stan Kroenke's surprising bid for full ownership mean for the team and the NFL?

          Will the NFL allow Stan Kroenke, who already owns NBA and NHL teams in Denver, take a majority stake in the Rams?

          The most logical theory, at least to me, is that Kroenke knows much more than those shocked by his move to match Shahid Khan's offer for the 60 percent of the team Kroenke does not yet own.

          Kroenke wouldn't make such a move without feeling very good about his chances.

          All parties knew Kroenke had legal right to match Khan's offer within 60 days. The masses assumed Kroenke wouldn't match because he already owned the NBA and NHL teams in Denver, making it tough to justify majority NFL ownership in another town while still complying with NFL rules on cross-ownership.

          You know what they say about assumptions, even reasonable ones.

          The NFL has tweaked its cross-ownership rules to accommodate owners in the past.

          Rules changes made in 1997 allowed Wayne Huizenga to continue as the Dolphins' owner even though he owned baseball's Marlins and hockey's Panthers in the same market. At the time, rules prevented owning majority stakes in more than one pro franchise, regardless of market. Huizenga had purchased the Dolphins in 1994, promising to sell the team if the cross-ownership rules didn't change by 1996.

          "That provision later was extended a year because more than eight owners opposed changing the rule," the Baltimore Sun reported in March 1997.

          The changes accommodating Huizenga also allowed Paul Allen to purchase the Seahawks even though he already owned the NBA's Trail Blazers in nearby Portland.

          As the Sun story noted, the cross-ownership rules changed when then-commissioner Paul Tagliabue convinced the Vikings, Bucs and Saints to go along. The Redskins, Lions, Bears, Bengals and Bills voted against the changes, with the Raiders abstaining.

          "The key to getting the rule changed was Allen's promise to keep the team in Seattle if he gets stadium funding," the Sun's story noted. "Even the opponents said they had no problem with Huizenga or Allen; they just thought it was better for the league to have its owners concentrating on football."

          The NFL probably has nothing personally against Kroenke, either. Allowing him to purchase full control of the Rams without divesting stakes in the Nuggets and Avalanche would require more dramatic changes to the rules. The Broncos could have obvious concerns because Kroenke owns pro franchises competing for sports dollars in their market. Other teams could voice similar fears on principle.

          But if the NFL prefers Kroenke to Khan by a wide enough margin, the league could...
          -04-13-2010, 01:33 PM
        • AvengerRam_old
          Kroenke Gaining Ground in Bid to Buy Rams
          by AvengerRam_old
          This is good news:...
          -05-25-2010, 07:33 AM