St. Louis’s Lawsuit Against The Rams Could Shake Up The Football World
5:08 PM EDT on October 13, 2021
The NFL and its owners tend to loathe revealing anything about how their business functions, so when they are forced to do so, the results tend to be fascinating. The league's investigation of the Washington Football Team has produced the biggest new story of the week, and threatens to reveal a good deal more about who has power and how they wield it. But the WFT investigation might not be the only peek we get behind the curtain. St. Louis Circuit Court Judge Christopher McGraugh ruled against the NFL and its owners at a hearing today, determining that they needed to turn over documents and financial records pertaining to the Rams' relocation away from the city five years ago.
In April 2017, one year after the Rams left for Los Angeles, the City and County of St. Louis filed a lawsuit against the NFL and its owners over the circumstances of the relocation effort. Specifically, St. Louis contends that Stan Kroenke and the NFL did not abide by their own bylaws governing relocation. NFL rules stipulate that, among other obligations, any team seeking to relocate has a legal duty "to work diligently and in good faith to obtain and maintain suitable stadium facilities in their home territories, and to operate in a manner that maximizes fan support in their current home community."
As you may recall, Jerry Jones led the charge to get the Rams to L.A. by counseling Kroenke and shepherding his proposal through a contentious league approval process. In 2014, Kroenke's purchase of a conveniently stadium-sized plot of land in Inglewood raised eyebrows, though Roger Goodell more or less said, Don't worry, Stan's a rich guy who loves to buy property. Rams COO Kevin Demoff also said the ominously stadium-shaped plot of land was "not a piece of land that’s any good for a football stadium," and, "The size and the shape aren’t good for a football stadium." (The Rams play there now, in a football stadium.)
The suit advances the claim that Kroenke and his fellow owners conspired to skirt their own rules in order to get the Rams out of St. Louis by lying about a potential St. Louis stadium deal, failing to do much of the required public disclosure, and declining to negotiate with the city in good faith. For example, the suit says that Kroenke never even met with the former mayor of St. Louis or governor of Missouri to discuss the team's alleged stadium-building efforts. The city and county claimed substantial financial losses in the fallout of the relocation, coeval with a huge jump in the valuation of the Rams franchise.
The league has tried to get a number of courts to kill the case, though their attempts to wriggle out from under the suit have fallen notably flat. In 2018, the Rams paid a $24 million settlement to personal seat license holders, who filed a class-action lawsuit against the team for failing to deliver on the final nine years of 30-year licenses they sold to season ticket holders. The Rams tried to get the case heard in arbitration, but a series of courts, including the United States Supreme Court, declined to take on the case. The Missouri State Supreme Court sided with a ruling by McGraugh that denied the Rams a requested change of venue for the January 2022 trial. Ironically, the Rams argued that the potential pool of jurors would all be biased against the team, which runs counter to their relocation-era claim that nobody cared about the Rams. The team was at least allowed to follow through on a clause in their 1994 lease and buy their former practice facility for $1.
If the NFL loses, St. Louis could get a huge pile of money, and other cities with reasonable relocation anxiety would get a nice precedent set for them. Kroenke also signed an indemnification agreement with the league and its owners, so he personally will be screwed, which is always good. There is also chatter that the league would offer St. Louis an expansion NFL team as part of some settlement agreement, though that's quite hypothetical at this point. The league has a serious non-financial incentive to settle the case, as that would help keep financial documents and other sensitive materials private. Throughout the process, owners have fought to turn over as few documents as they possibly could. When forced to give said documents to the court, they have fought to keep them private.
Their quest has not gone well. McGraugh has compelled defendants to turn over relocation-related financial records, which could show how the mechanics of relocation actually work—in both a political and financial sense—as well as how franchise valuations are tabulated by people more reliable than Forbes (For an idea of the significance of this, see the Maras claiming they have no idea how much their team's worth.) He also imposed a penalty of $1,000 per day to those who don't comply by the required date. Per NBC St. Louis' Holden Kurwicki, Kroenke has turned over 23,000 pages of goodies, and according to a St. Louis Post-Dispatch report, "Team STL lawyers did get access to a ton of emails and documents that the league and the owners did not want getting out." Still, many parties who have been legally compelled to hand over their papers have refused to do so, and have refused to pay their fines.
The hearing today was another rebuttal of the NFL's power. McGraugh ripped into the NFL's lawyers for simply refusing to follow the court's orders, and issued a show cause order to see whether the NFL side can be held in contempt of court. They now have two weeks to produce the required documents. The following owners also have to pay up:
As the Jon Gruden saga and the Adam Schefter should-be-more-of-a-saga showed, there are almost certainly juicy morsels contained within the troves of records being withheld from the court. It goes beyond the possibility of people saying fireable things or ostensible journalists showing powerful people where their puppet strings are. The L.A. deal was transparently about money and cracking open a huge media market, and with a deal this substantial, this blatantly indifferent to the league's obligations to St. Louis, and involving power struggles between the most powerful people in the biggest sports league in the world, all of whom are old guys who probably don't have very clean internet opsec, we could stand to learn meaningful new things about the way power is wielded in the NFL.
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