Monday, February 9, 2015

There is Zero Chance Stan Kroenke Will Only Be a Landlord in Inglewood

One of the "kookier" theories I've seen bandied about in the whole Rams-St. Louis-Inglewood stadium brouhaha is that for some reason, Stan Kroenke is partnering with Stockbridge Capital to be a landlord for another NFL team (or two) in Los Angeles, while retaining ownership of the Rams in St. Louis.

Huh?

This notion is more ridiculous than stuff I've seen on Ancient Aliens.

(Side note: great show. Even if most of it's B.S., a good 25% of the stuff makes you think, "what if?")

Why would the NFL let a competitor own another team's facility? That's like letting Ben and Jerry's own the physical plant of a Baskin Robbins store. You think that store would be tops on the list for general maintenance, fumigation, interior design, heating, cooling, etc.?

To make it more about the NFL, what if the Rams had a pivotal week 17 game against the L.A. Chargers in Stan's new stadium? If the owner was properly motivated to win (and hey, that's a valid objection here because hey, it's Stan...), wouldn't he do everything in his power to mess with the opponent? A convenient "glitch" in the hot water or AC on game day? A pest infestation? A convenient "mis-delivery" of the team's toradol supply before the game?

The possibilities are endless...

Of course, I'm being somewhat hyperbolic. One can only imagine "Stanley Whiplash" twirling his mustache in his ill-fitting suit as he sneaks into the home team's supply closet to grease up their footballs.

But the point about maintenance and upkeep is absolutely valid. Where's the incentive for that? Once the lease is signed, where's the incentive to keep up the facilities?

Would we see another "top-tier" clause in the lease?

Unfortunately, this kind of speculation is thrown out there by the NFL to further reinforce their own image as "one business," not 32 competing businesses for antitrust purposes.

It's a long-standing battle that the league has waged to garner expansive antitrust protection.

("More boring legal stuff?" You're damned right more boring legal stuff! Listen, I don't want it to be this way any more than you do. I got out of the law for a reason. But when I see people hold themselves out as "knowledgeable" on a topic like franchise relocation, when they've at worst not done any research, or at best just lap up whatever's slopped at them from various sources like pigs at a trough, it drives me insane).

The league has a vested interest as being treated as one, large "football" organization with 32 different retail outlets. Doing so means that "everyone's under the same umbrella," like Burger King or Midas--the franchises, while ostensibly competing week-to-week on the field, are all considered one big, happy family off the field.

Conveniently, this would afford the NFL somewhat greater protection under the antitrust laws.

Unfortunately for them, time-and-time again, federal courts have rules that the league is actually 32 competing franchises that are absolutely subject to federal antitrust laws.

This may not seem like a big distinction to the average fan, but think of it this way in the context of stadium ownership:

If you accept the NFL's "one body" theory, then Stan owning the Chargers' Inglewood stadium is like one McDonald's franchise owner owning the physical plant of another McDonald's.

If you take the more realistic, "32 competitors" view, it's like Burger King owning that same McDonald's.

You can see how, despite contractual assurances to the contrary, the occasional corner might get cut.

In a similar vein, word came down earlier today that the NFL is forming a committee of owners dedicated to the "L.A. issue."

While I applaud them on trying to control the narrative, their naïveté on the relocation issue is heartwarming, in that "puppy doesn't know that the 'creature under the covers' is just your leg" sort of way.

If the courts maintain the "32 competitors" view of the league, to restrict territories and movement of franchises would almost certainly be a violation of the antitrust laws against restraining trade to protect competition. As much as Rams fans around St. Louis love the team, wouldn't the team be better able to compete in L.A., where revenues would be far more readily available in the form of consistently-full premium seating and the associated benefits?

That's what really gets me; the league is banking on Stan to "maintain protocol" and "not rock the boat." They've gone so far as to create a "peer pressure committee" to try to intimidate their fellow owners from not horning in on their own self-proclaimed market.

As I've consistently maintained for months, if not years, the NFL isn't above the laws of the United States of America. They can keep harping about how they control the L.A. market, how each owner will have to go through "several approvals" to get to L.A.

When the rubber meets the road, though, I doubt the league is willing to go to court on an antitrust case potentially worth $3 billion in lost valuation and profits, should they push Stan too far (antitrust cases are unique in that they provide triple damages to a successful plaintiff).

The law is pretty clearly on Stan's side, and absent outright buying a judge, the league has to know this, too.

They're puffing themselves up pretty well right now, but ultimately, the league can't think they have the authority to really beat down one of their own, cross-ownership rules or not.

Ultimately, this is a long-winded way of saying that Stan Kroenke has 4 options:

1) Keep the Rams in St. Louis with the Peacock plan, and sell the Inglewood plan to Spanos or Mark Davis

2) Keep the Inglewood plan and move the Rams out to L.A. to be tenants


3) Sell the Rams and buy another team to become the Inglewood tenant

4) Sell the Rams and enjoy the NFL as a landlord only.

I suppose there could be more, but these are the most likely in my opinion. But to conjure up outlandish scenarios where he owns one team, but plays landlord to another?

Man, I could use your help on some story ideas...

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