Jan 09, 2015 06:21:00 (ET)
By Jason Notte, MarketWatch
NFL team owners always find a way to get cities to bankroll their dream stadiums St. Louis Rams owner Stan Kroenke didn't even wait for last year's Super Bowl to kick off before making it known that he'd bought land that could accommodate a football stadium in Los Angeles.
St. Louis fans should have used the time that followed to work through the Kubler-Ross stages of loss and grief -- and landed squarely on "acceptance."
Just as the National Football League and its fans were heading into Super Bowl weekend and pundits were making their last predictions about the Seattle Seahawks' chances against the Denver Broncos, strange echoes emanated from St. Louis and Los Angeles. As reported by no less than NFL.com, Kroenke purchased 60 acres in Inglewood, Calif., between the refurbished Forum and the soon-to-be-demolished Hollywood Park racetrack.
It prompted NFL Commissioner Roger Goodell to assure fans that, no, this didn't mean the Rams were going to bring an NFL team back to Los Angeles for the first time since the Rams and Raiders left in 1994.
"Stan is a very large developer, on a global basis," Goodell said. "He has land throughout the country and throughout the world. He has kept us informed of it. We're aware of it. There are no plans, to my knowledge, of a stadium development. Anything that would require a stadium development would require multiple votes of the membership."
Kroenke also is not an idiot. Despite the fact that the Rams haven't made the playoffs since 2004 and haven't won more games than they've lost since 2003, Kroenke and the rest of the Rams ownership are looking for $700 million in upgrades to the Edward Jones Dome, including a roof with a sliding panel, a glass front, luxury boxes, party platforms, new scoreboards, improved concessions and extra offices. Ownership wants the city to make good on its lease's promise to improve the dome into a "first-tier" stadium by 2015, but St. Louis likely didn't foresee the $1 billion-plus stadiums in Dallas, New Jersey and Silicon Valley.
The St. Louis Convention & Visitors Commission balked at the Rams' proposal, saying they and the city "simply don't have the money" to make it happen. In more plain language, they know full well that Kroenke not only has the money to fund such a venture, but he could also bring in a bunch of willing partners at any moment to pick up the slack.
However, a promise is a promise and, with no stadium improvements on the slate in St. Louis for 2015, Kroenke and his partners in Inglewood officially announced plans for a new stadium with up to 80,000 seats, a performance venue of up to 6,000 seats while reconfiguring the previously approved Hollywood Park plan for up to 890,000 square feet of retail, 780,000 square feet of office space, 2,500 new residential units, a 300-room hotel and 25 acres of public parks, playgrounds, open space, and pedestrian and bicycle access. Kroenke & Co. were careful never to call the stadium a "football stadium," but the implication was clear.
Meanwhile, the obstacles of moving the Rams to L.A. just keep dwindling. Though the stadium plan will go to a public vote in Inglewood, the fact that Kroenke and his partners aren't using tax dollars or other public money to build their facilities has both developers and the city ready to start construction. Politicians and business investors back in Missouri, including Gov. Jay Nixon, plan on putting forward a competing stadium proposal, but have made clear that such a proposal would target "a National Football League franchise" that isn't necessarily the Rams.
Former Anheuser-Busch (AHBIY) President Dave Peacock and attorney Bob Blitz are devising new stadium plans by the end of this week and will pitch them to the Rams, but even they seem to be operating under the assumption that Kroenke and his franchise have a foot out the door.
"We are ready to demonstrate our commitment to keeping the NFL here, and to continue to illustrate why St. Louis has been and will always be a strong NFL market," they said in a statement.
Even more telling were the words of Jeff Rainford, spokesman for St. Louis Mayor Francis Slay.
"A National Football League franchise does have value, and we should want one, but let's use some common sense," Rainford said Monday. "The parameters are not a blank check."
It's that stance that may be the best reason of all for letting the Rams go. Though NFL owners would still have to vote on any relocation application and determine if Kroenke and the city acted in good faith in their stadium negotiations -- and the broken promise over upgrades definitely weighs in Kroenke's favor -- the fact is that Kroenke and his partners are willing to buy Los Angeles a new stadium and more out of their own pockets. No tax dollars, no surcharges, no strings. He's made no such offer to his hometown of St. Louis.
Keep in mind that Stan Kroenke's net worth was listed at $4 billion by Forbes last year. That's not counting the $6 billion stake in Wal-Mart (WMT) owned by Kroenke and his wife, Ann Walton Kroenke. He took a 40% stake in the Rams when they moved from L.A. in 1995 and bought the rest of the team in 2010 after majority owner Georgia Frontiere died. He also owns both the Denver Nuggets of the National Basketball Association and Colorado Avalance of the National Hockey League, but had to give control of both franchises to his son Josh to get the NFL's approval to take over the Rams.
He also owns Major League Soccer's Colorado Rapids outright and has a controlling interest in London-based English Premier League club Arsenal. Before he was a sports mercenary, however, he was just a kid from Columbia, Mo. Enos Stanley Kroenke was named after St. Louis Cardinals baseball legends Stan Musial and Enos Slaughter, he received his bachelor's, master's and MBA degrees from the University of Missouri, and he built a real estate and development empire in St. Louis.
That said, Kroenke is toying with his home state of Missouri as it pays $12 million a year just to cover the cost of building the former Trans World Dome back in 1995. It's on the hook until 2021, as are St. Louis city and county, each of which are paying $6 million a year toward the dome's initial costs. St. Louis is a town that already lost its NFL team once during the Super Bowl era, when the Cardinals bolted for Phoenix in 1988 after 28 years. Before handing the NFL or its owners another dime, it should weigh its options.
It's dealing with a league that's been protected by an antitrust exemption since 1961 and has been allowed to keep its games on network airwaves at whim as a result of it. It also receives a tax exemption from the federal government that doesn't prevent individual franchises themselves from being taxed, but allows them to use the league to obscure just how much of its communal money goes where. Those sums are considerable, with the NFL bringing in $10 billion in revenue last season and more than half of that from deals with networks and with carriers for its NFL Network, RedZone and NFL Sunday Ticket.
It's a league in which 30 of the NFL's 31 stadiums have had a portion of their costs paid for with tax dollars. It cost an average of $525 million to cover each of 20 NFL stadiums built since 1997, according to a Minnesota study looking into the likely costs of a new stadium for the Vikings. However, that 56% of those stadium costs ($238 million per stadium) were paid for with public funds. That's nearly $4.8 billion in tax dollars spent on NFL stadiums alone, which doesn't include the nearly $500 million in tax dollars Minnesota actually plans to pay for its stadium, nor the $200 million Atlanta will be paying for a new stadium for the Falcons. Harvard professor Judith Grant Long estimates that continued costs including maintenance, infrastructure and renovations dip into more tax money and force the public to pay upwards of 70% of a stadium's cost.
She also estimates that 12 teams have received more subsidies than required to build stadiums. Simply put, they all profited on their fans' tax dollars.
Increasingly, there's a case for St. Louis not to contribute anything to the cost of its stadium and to extract payment from Kroenke and the Rams for Edward Jones Stadium if they leave. When the NBA's Seattle SuperSonics left for Oklahoma City in 2008, Seattle brokered a settlement with the owners of the ensuing Oklahoma City Thunder that not only avoided drawn-out court proceedings over "good faith" negotiations, but paid off KeyArena. St. Louis could test legal channels to squeeze a similar deal out of Kroenke and the Rams but, failing that, it shouldn't dedicate a sole tax dollar to a stadium again.
In 2002, New England Patriots owner Robert Kraft offered to build his team's new stadium with money out of his own pocket, but a dispute over infrastructure improvements resulted in a $72 million local tax hit. That would be the least amount of tax money dedicated to an NFL stadium in nearly 20 years, if not for the $0 that New York and New Jersey paid for the privately financed MetLife Stadium in East Rutherford, N.J., in 2010. When the San Francisco 49ers were looking to build Levi's Stadium in Santa Clara, a lack of support for public funding led them to put up nearly 90% of the costs of their new $1 billion facility.
The NFL doesn't need any more of U.S. taxpayers' money or services. St. Louis can keep its memories of Kurt Warner, Marshall Faulk, Isaac Bruce, The Greatest Show on Turf and the 1999 Super Bowl title, but it should stop mortgaging them to the Rams immediately.
Of the six cities to lose NFL teams since 1980, all but Los Angeles eventually received another NFL franchise. L.A. is about to get one for free. St. Louis isn't Los Angeles, true, but it also shouldn't be blamed for Los Angeles setting the going rate at zero tax dollars.
By Jason Notte, MarketWatch
NFL team owners always find a way to get cities to bankroll their dream stadiums St. Louis Rams owner Stan Kroenke didn't even wait for last year's Super Bowl to kick off before making it known that he'd bought land that could accommodate a football stadium in Los Angeles.
St. Louis fans should have used the time that followed to work through the Kubler-Ross stages of loss and grief -- and landed squarely on "acceptance."
Just as the National Football League and its fans were heading into Super Bowl weekend and pundits were making their last predictions about the Seattle Seahawks' chances against the Denver Broncos, strange echoes emanated from St. Louis and Los Angeles. As reported by no less than NFL.com, Kroenke purchased 60 acres in Inglewood, Calif., between the refurbished Forum and the soon-to-be-demolished Hollywood Park racetrack.
It prompted NFL Commissioner Roger Goodell to assure fans that, no, this didn't mean the Rams were going to bring an NFL team back to Los Angeles for the first time since the Rams and Raiders left in 1994.
"Stan is a very large developer, on a global basis," Goodell said. "He has land throughout the country and throughout the world. He has kept us informed of it. We're aware of it. There are no plans, to my knowledge, of a stadium development. Anything that would require a stadium development would require multiple votes of the membership."
Kroenke also is not an idiot. Despite the fact that the Rams haven't made the playoffs since 2004 and haven't won more games than they've lost since 2003, Kroenke and the rest of the Rams ownership are looking for $700 million in upgrades to the Edward Jones Dome, including a roof with a sliding panel, a glass front, luxury boxes, party platforms, new scoreboards, improved concessions and extra offices. Ownership wants the city to make good on its lease's promise to improve the dome into a "first-tier" stadium by 2015, but St. Louis likely didn't foresee the $1 billion-plus stadiums in Dallas, New Jersey and Silicon Valley.
The St. Louis Convention & Visitors Commission balked at the Rams' proposal, saying they and the city "simply don't have the money" to make it happen. In more plain language, they know full well that Kroenke not only has the money to fund such a venture, but he could also bring in a bunch of willing partners at any moment to pick up the slack.
However, a promise is a promise and, with no stadium improvements on the slate in St. Louis for 2015, Kroenke and his partners in Inglewood officially announced plans for a new stadium with up to 80,000 seats, a performance venue of up to 6,000 seats while reconfiguring the previously approved Hollywood Park plan for up to 890,000 square feet of retail, 780,000 square feet of office space, 2,500 new residential units, a 300-room hotel and 25 acres of public parks, playgrounds, open space, and pedestrian and bicycle access. Kroenke & Co. were careful never to call the stadium a "football stadium," but the implication was clear.
Meanwhile, the obstacles of moving the Rams to L.A. just keep dwindling. Though the stadium plan will go to a public vote in Inglewood, the fact that Kroenke and his partners aren't using tax dollars or other public money to build their facilities has both developers and the city ready to start construction. Politicians and business investors back in Missouri, including Gov. Jay Nixon, plan on putting forward a competing stadium proposal, but have made clear that such a proposal would target "a National Football League franchise" that isn't necessarily the Rams.
Former Anheuser-Busch (AHBIY) President Dave Peacock and attorney Bob Blitz are devising new stadium plans by the end of this week and will pitch them to the Rams, but even they seem to be operating under the assumption that Kroenke and his franchise have a foot out the door.
"We are ready to demonstrate our commitment to keeping the NFL here, and to continue to illustrate why St. Louis has been and will always be a strong NFL market," they said in a statement.
Even more telling were the words of Jeff Rainford, spokesman for St. Louis Mayor Francis Slay.
"A National Football League franchise does have value, and we should want one, but let's use some common sense," Rainford said Monday. "The parameters are not a blank check."
It's that stance that may be the best reason of all for letting the Rams go. Though NFL owners would still have to vote on any relocation application and determine if Kroenke and the city acted in good faith in their stadium negotiations -- and the broken promise over upgrades definitely weighs in Kroenke's favor -- the fact is that Kroenke and his partners are willing to buy Los Angeles a new stadium and more out of their own pockets. No tax dollars, no surcharges, no strings. He's made no such offer to his hometown of St. Louis.
Keep in mind that Stan Kroenke's net worth was listed at $4 billion by Forbes last year. That's not counting the $6 billion stake in Wal-Mart (WMT) owned by Kroenke and his wife, Ann Walton Kroenke. He took a 40% stake in the Rams when they moved from L.A. in 1995 and bought the rest of the team in 2010 after majority owner Georgia Frontiere died. He also owns both the Denver Nuggets of the National Basketball Association and Colorado Avalance of the National Hockey League, but had to give control of both franchises to his son Josh to get the NFL's approval to take over the Rams.
He also owns Major League Soccer's Colorado Rapids outright and has a controlling interest in London-based English Premier League club Arsenal. Before he was a sports mercenary, however, he was just a kid from Columbia, Mo. Enos Stanley Kroenke was named after St. Louis Cardinals baseball legends Stan Musial and Enos Slaughter, he received his bachelor's, master's and MBA degrees from the University of Missouri, and he built a real estate and development empire in St. Louis.
That said, Kroenke is toying with his home state of Missouri as it pays $12 million a year just to cover the cost of building the former Trans World Dome back in 1995. It's on the hook until 2021, as are St. Louis city and county, each of which are paying $6 million a year toward the dome's initial costs. St. Louis is a town that already lost its NFL team once during the Super Bowl era, when the Cardinals bolted for Phoenix in 1988 after 28 years. Before handing the NFL or its owners another dime, it should weigh its options.
It's dealing with a league that's been protected by an antitrust exemption since 1961 and has been allowed to keep its games on network airwaves at whim as a result of it. It also receives a tax exemption from the federal government that doesn't prevent individual franchises themselves from being taxed, but allows them to use the league to obscure just how much of its communal money goes where. Those sums are considerable, with the NFL bringing in $10 billion in revenue last season and more than half of that from deals with networks and with carriers for its NFL Network, RedZone and NFL Sunday Ticket.
It's a league in which 30 of the NFL's 31 stadiums have had a portion of their costs paid for with tax dollars. It cost an average of $525 million to cover each of 20 NFL stadiums built since 1997, according to a Minnesota study looking into the likely costs of a new stadium for the Vikings. However, that 56% of those stadium costs ($238 million per stadium) were paid for with public funds. That's nearly $4.8 billion in tax dollars spent on NFL stadiums alone, which doesn't include the nearly $500 million in tax dollars Minnesota actually plans to pay for its stadium, nor the $200 million Atlanta will be paying for a new stadium for the Falcons. Harvard professor Judith Grant Long estimates that continued costs including maintenance, infrastructure and renovations dip into more tax money and force the public to pay upwards of 70% of a stadium's cost.
She also estimates that 12 teams have received more subsidies than required to build stadiums. Simply put, they all profited on their fans' tax dollars.
Increasingly, there's a case for St. Louis not to contribute anything to the cost of its stadium and to extract payment from Kroenke and the Rams for Edward Jones Stadium if they leave. When the NBA's Seattle SuperSonics left for Oklahoma City in 2008, Seattle brokered a settlement with the owners of the ensuing Oklahoma City Thunder that not only avoided drawn-out court proceedings over "good faith" negotiations, but paid off KeyArena. St. Louis could test legal channels to squeeze a similar deal out of Kroenke and the Rams but, failing that, it shouldn't dedicate a sole tax dollar to a stadium again.
In 2002, New England Patriots owner Robert Kraft offered to build his team's new stadium with money out of his own pocket, but a dispute over infrastructure improvements resulted in a $72 million local tax hit. That would be the least amount of tax money dedicated to an NFL stadium in nearly 20 years, if not for the $0 that New York and New Jersey paid for the privately financed MetLife Stadium in East Rutherford, N.J., in 2010. When the San Francisco 49ers were looking to build Levi's Stadium in Santa Clara, a lack of support for public funding led them to put up nearly 90% of the costs of their new $1 billion facility.
The NFL doesn't need any more of U.S. taxpayers' money or services. St. Louis can keep its memories of Kurt Warner, Marshall Faulk, Isaac Bruce, The Greatest Show on Turf and the 1999 Super Bowl title, but it should stop mortgaging them to the Rams immediately.
Of the six cities to lose NFL teams since 1980, all but Los Angeles eventually received another NFL franchise. L.A. is about to get one for free. St. Louis isn't Los Angeles, true, but it also shouldn't be blamed for Los Angeles setting the going rate at zero tax dollars.
