SBJ/20100510/This Week's News
Kroenke asks NFL to allow his wife to own the Rams
Published May 10, 2010
Stan Kroenke asked the NFL last week to allow his wife to own the St. Louis Rams, sources said, as a way to address the complications that have developed from his decision last month to trigger an option to buy the club.
Because Kroenke owns NBA and NHL teams in Denver, he is precluded by the NFL’s cross-ownership policy from owning a football team outside that city. While media reports last month suggested Kroenke would move the Denver sports assets into his wife’s name or children’s names, what he instead proposed in person last week to the NFL finance committee at a meeting in New York City was that his wife, Ann Walton Kroenke, would buy the Rams, the sources said.
It’s uncertain whether the proposal would pass muster, the sources said, noting that it may depend on how the deal is structured. Kroenke did include other options last week, the sources said, but details of those proposals were not available.
A Kroenke spokesman declined to comment, as did the NFL.
The NFL has been firm in its support of the cross-ownership rule, which is designed to keep the league’s owners from competing against one another for business in a market.
Kroenke has held the option to buy the Rams since 1993, when he first assumed his 40 percent stake. That option was grandfathered in when the league in 2005 extended the cross-ownership policy to limited partners with a path to control.
Rams owner Georgia Frontiere died in 2008, and her children, Chip Rosenbloom and Lucia Rodriguez, inherited the club. They put it on the market last year, and in February, they agreed to sell to businessman Shahid Khan. Kroenke had two months to trigger his option, and he did so at the end of that period.
Now, the question is whether the NFL could accept the proposal for Kroenke’s wife to own the team. A Wal-Mart heir, Ann Kroenke is independently wealthy and could write the check, the sources said.
Khan’s deal valued the Rams at $750 million.
“Will this be viewed as an arms-length transaction or does it flaunt the cross-ownership rules and allow competition with other owners?” asked Charles Baker, a partner and sports mergers lawyer with DLA Piper, which is not involved with the sale.
One source said the key to the deal will be if a true sale to Ann Kroenke were to occur and if there would be operational divisions erected between her ownership of the Rams and her husband’s ownership of the Denver Nuggets and Colorado Avalanche.
NFL owners are scheduled to meet May 24-26 in Dallas. It’s unclear whether the finance committee will have a recommendation by that time. That does seem unlikely, however, given that the Kroenke presentation last week was described by sources as simply the opening offer in what could be a drawn-out negotiation with the finance committee.