Photo via: Ben Liebenberg AP
Los Angeles Rams owner, Stan Kroenke, is attempting to settle with the City of St. Louis without the remaining 31 NFL teams and their owners.
The National Football League is dealing with more complications in a lawsuit.
That’s a sentence that we have all become accustomed to hearing. Stan Kroenke, owner of the now Los Angeles Rams, has threatened to settle the Rams relocation lawsuit separately from the 31 other NFL team owners (the Defendants in the lawsuit). This is a move that many foresaw after Kroenke informed his fellow NFL owners that he no longer intended to keep his promise to pay the millions of dollars in legal fees on behalf of the NFL as ongoing litigation occurred between the NFL and City of St. Louis[1].
Kroenke’s email, sent by his representatives and obtained by the Sports Business Journal[2], reads in pertinent part:
“If we continue to not get any assurances from the league regarding allocation (of damages), we will have no choice but to try to resolve the case on behalf of only the Rams and Mr. Kroenke. We do not want to do that. We want everyone’s participation — or some assurance from the league that a settlement will be allocated fairly. But we have not gotten that assurance to date, nor any suggestion that the league will try to settle the case and address allocation later.”
The Plaintiffs, St. Louis, St. Louis County, and the St. Louis Regional Convention and Sports Complex Authority, brought the suit against the NFL in 2017. The Plaintiffs, as third-party beneficiaries, allege that Kroenke and the Defendants did not comply with the NFL’s relocation guidelines — improperly moving the Rams from St. Louis to Los Angeles — thus, breaching an enforceable contract. Further, the Plaintiffs believe that despite them meeting the contractual guidelines and protocols of the relocation policy, Kroenke and the Defendants neglected such because it blocked their desire to move a team to Los Angeles. The other allegations in the complaint are for fraud, illegal enrichment and tortious interference.
If Kroenke separately settles the relocation lawsuit — which you can read further about here —the remaining Defendants (the 31 other teams and their owners) still need to go to trial on January 10th.
The news of possible settlement is peculiar. Although Kroenke no longer intended to cover the cost of all the defendants’ legal fees, Kroenke separately settling never seemed like a real possibility. The NFL and its owners tend to move in unison. Kroenke and his team believe they can settle with the plaintiffs somewhere in the ballpark of $500 million to $700 million – a number far greater than the $100 million Kroenke initially offered.
The mediation to settle is set to take place on November 23rd.
If Kroenke successfully settles with the plaintiffs, the remaining NFL teams and their owners will have to cover both legal fees and responsibility for the outcome of the trial. Although at this juncture the NFL has been on the losing side of pre-trial motions, many believe the NFL will ultimately win on appeal if they lose the initial trial.
The NFL has a history of winning on appeal:
Lockout Bargaining: Labor Negotiations
In 2011, NFL owners ‘locked’ the players out while conducting a new collective bargaining deal with the NFLPA— knowing the NFLPA could not negotiate as strongly without players receiving paychecks. The NFLPA litigated the matter, winning in the lower court. However, the NFL won on appeal in the Eighth Circuit Court of Appeals, resulting in an owner friendly collective bargaining deal.
Draft Eligibility: Draft Structure
In 2013, Maurice Clarett challenged the three years removed from high school draft clause, winning in the lower court. However, The NFL reigned triumphant in the Second Circuit Court of Appeals, overruling the lower court decision and the NFL draft eligibility rule stayed intact.
Commissioner Power
This arose from the 2015 Deflate-gate scandal with Tom Brady. Brady initially won, but the Commissioner’s power to suspend Brady was upheld in the Second Circuit Court of Appeals.
If Kroenke and St. Louis come to an agreement during mediation, November 23, 2021, will be an historical day in NFL history. It will be interesting to see how the remaining owners react and if Kroenke will find himself on the wrong end of league disputes in the future.
[1] https://www.espn.com/nfl/story/_/id/32486646/los-angeles-rams-owner-stan-kroenke-angers-nfl-owners-financial-pivot-related-lawsuit-st-louis-move-sources-say
[2] https://www.sportsbusinessjournal.com/Daily/Issues/2021/11/18/Franchises/Rams.aspx
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