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Kroenke to offer plan to comply with NFL rules

NFL owners at their fall meeting Wednesday are scheduled to hear for the first time St. Louis Rams owner Stan Kroenke’s plan to comply with the league’s prohibition against owning major league teams in other NFL markets.

The development occurs as Kroenke, who has been in noncompliance with league rules on the matter since 2010, is also lobbying the NFL to allow the Rams to move to his planned stadium in Inglewood, Calif.

St. Louis Rams owner Stan Kroenke has been out of compliance with league rules on team ownership.
Photo by: GETTY IMAGES
According to sources familiar with the plan that will be outlined, Kroenke’s structure calls for placing the Denver Nuggets and Colorado Avalanche into an irrevocable trust, with the clubs managed by his son, Josh. The elder Kroenke would keep control of the teams’ arena, the Pepsi Center, as well as the regional sports network that broadcasts their games, Altitude Sports and Entertainment.

“There are quite a few owners who want the rules enforced,” said sports consultant Marc Ganis, who has close ties to the NFL. “The rules deal with team ownership, not ancillary business opportunity ownership, like real estate or regional sports networks.”

By keeping the arena and RSN, Kroenke arguably retains much of the economic power that derives from team ownership. The cross-ownership rule is in place, in part, to keep NFL team owners from competing against each other within a market.

It is unclear if the trust carries a provision that would allow Kroenke to flip the NHL and NBA teams back out in the event the NFL’s cross-ownership rule were to change — or, if at some point, he were to sell the Rams and buy the Denver Broncos, a scenario that’s been floated at times in league circles. The owner of the Broncos, Pat Bowlen, is ailing.

Kroenke assumed full control of the Rams in 2010, when he executed his right of first refusal to buy the 60 percent share he did not own at the time.

At the time, Kroenke pledged to comply with the NFL’s cross-ownership rule by the end of 2014. (He also agreed to relinquish operating control of the Denver clubs by the end of 2010, with Josh Kroenke assuming control, which he still holds today.) After several years, talk emerged that Kroenke had offered the league a quid pro quo: He would sell the teams if he were allowed to move the Rams to Los Angeles. Such talk, whether factual or purely speculative, underscored growing concern within league circles that Kroenke had not moved on his promise to come into compliance.

Sources said the plan would put Kroenke’s son, Josh, over the Denver Nuggets and Colorado Avalanche.
Photo by: GETTY IMAGES
Then, at last year’s fall owners meeting, the league agreed to grant Kroenke a one-year reprieve. As part of the arrangement, Kroenke agreed to present a cross-ownership plan to the league by June 15, which he did, and comply by Dec. 15.

One source said Kroenke’s initial presentation to the league that was due June 15 involved a revocable trust plan, which the NFL rejected. Kroenke then offered the irrevocable model, but this source said he also wanted a provision that would allow him to reclaim ownership of the Denver teams if circumstances merited. But even without such a provision, Kroenke could take the teams out of an irrevocable trust if he replaces them with assets of equal value.

“Trust is irrevocable — but assets can be exchanged,” wrote league spokesman Brian McCarthy, in an email. That would suggest there is no extra provision.

A spokesman for Kroenke did not reply for comment.

Kroenke has a point about the league’s rules potentially changing, said Amy Trask, former Oakland Raiders chief executive. The cross-ownership rule has changed once already, she said, from owners not being allowed to own any other major league’s teams to the proscription not applying to a team’s home market. Owners now are allowed to own other big league teams in their NFL team’s market — such as Terry and Kim Pegula owning the Buffalo Bills as well as the NHL Sabres.

“It is not an unfair position on his part,” Trask said, as the league could force him to sell the clubs, and then the rule might change.

Trask also had no issue with Kroenke retaining ownership of the arena and RSN, noting Dallas Cowboys owner Jerry Jones owns part of Legends, which does business in other NFL markets.

One of the main reasons for the cross-ownership rule, Trask said, is that the league does not want a team owner — in this example, the owner of the Denver NBA and NHL teams — in an NFL meeting where the league’s approach to that market is discussed.

As for Kroenke’s proposed stadium in Inglewood, Calif., and his desire to move the Rams there, 24 owners would need to sign off on that move, something that is in question because of efforts in St. Louis to build a new stadium (see story below). The San Diego Chargers and Oakland Raiders have also together proposed a stadium in Carson, Calif. The league is expected to allow at most two teams into Los Angeles, and perhaps only one.

The owners meeting on Wednesday, during which Kroenke’s plan will be offered to owners, will also focus on the league’s future with Los Angeles and how much the league might charge any team to relocate.

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