new relocation thread! starting with JT: Kroenke faces rough road out of town

[Agamemnon]

Maybe the NFL will stand up to Kroenke. Or cut a deal that would allow him to go as long as another team (Oakland Raiders?) is willing to relocate here.

I heard a wild one earlier this week. Kroenke is so determined to set up shop in LA, he has an alternative plan in mind if the NFL blocks a move there. Kroenke would sell the Rams and buy 49 percent of the Raiders as part of anchoring the team to his planned 80,000-seat venue in LA. And then Kroenke would purchase the remaining 51 percent from Raiders owner Mark Davis at a later date.

If you think this sounds too crazy to contemplate, just remember: That’s EXACTLY how the Rams made their way from Los Angeles to St. Louis in 1995.

Kroenke bought 49 percent of the Rams from team owner Georgia Frontiere. The deal came with the right of first refusal for Kroenke to buy the remaining 51 percent when Georgia or her family sold the team.

The move from LA to STL wouldn’t have played out unless Kroenke stepped up to buy the 49 percent as the first step in his eventual franchise takeover. It was a condition for a move. The strategy worked for Kroenke once. It could work for him again.

http://www.stltoday.com/sports/columns/bernie-miklasz/bernie-what-are-rams-fans-supposed-to-do-now/article_d31bfb5a-6405-5b4a-90fc-4edd7dd9d060.html

Agamemnon

[Dak]

Agamemnon wrote:

The hardest part of all, said Neil deMause, editor of the stadium subsidies website Field of Schemes, is figuring out what Kroenke’s really up to. Either he’s planning a billion-dollar bet on Los Angeles with one foot already out the door, or he just got St. Louis to cough up $400 million by issuing a news release about a stadium in L.A.

“And the thing is,” DeMause said, “If [Kroenke] goes for this plan, we’ll never know if it was a bluff or not.”

Times Staff Writer Sam Farmer contributed to this report.

http://www.latimes.com/business/realestate/la-sp-sn-st-louis-pitches-stadium-plan-20150109-story.html

If the L.A. proposal was just a negotiating tactic, that would likely be the cruelest joke of all … on St. Louis and Los Angeles.

But, I tend to think that Kroenke likes having options, and while having a site in L.A. doesn’t guarantee a move, it makes it quite possible, and either SK has a more valuable franchise in L.A. or a sweetheart deal in St. Louis. Or, he has a sweetheart deal in St. Louis AND offers the NFL an attractive option to move a franchise to L.A.

You now have interpretations of “good faith efforts” to find a stadium solution to stay in St. Louis. I think the consensus here is that the NFL could decide that SK gave it a good faith effort. Maybe not right now … but after going through more of this negotiating process. I’m not saying it’s a good case that there was a good faith effort, but when did fairness stop the NFL from doing what’s best for “The League”?

Kroenke’s response (or, rather his team’s response, since we won’t see SK or hear directly from him during negotiations) will tell us a lot. If there’s a response asking St. Louis to do a lot more to keep the Rams here, I’d say we’ll know SK’s true intentions. Because the stadium plan put forth is more than fair. It’s not the 80,000-seat stadium and surrounding development in the L.A. plan, but SK could easily do something like that here if he ponied up more money — since the L.A. plan is all privately financed.

It’s a joke, really. We see that it’s possible to privately finance the entire L.A. project. But, in St. Louis, where the franchise admittedly isn’t worth nearly as much, we’re to accept that SK could only afford a $200M portion. Pshaw.

[sdram]

If the L.A. proposal was just a negotiating tactic, that would likely be the cruelest joke of all … on St. Louis and Los Angeles.

I agree with this. So, question remains what does Stan want?

I’d say that the big difference in the proposals from my perspective is Stan will own the whole shebang in LA. Would he give that up for the deal in St Louis?

[Zooey]

Dak wrote:

If the L.A. proposal was just a negotiating tactic, that would likely be the cruelest joke of all … on St. Louis and Los Angeles.

But, I tend to think that Kroenke likes having options, and while having a site in L.A. doesn’t guarantee a move, it makes it quite possible, and either SK has a more valuable franchise in L.A. or a sweetheart deal in St. Louis. Or, he has a sweetheart deal in St. Louis AND offers the NFL an attractive option to move a franchise to L.A.

You now have interpretations of “good faith efforts” to find a stadium solution to stay in St. Louis. I think the consensus here is that the NFL could decide that SK gave it a good faith effort. Maybe not right now … but after going through more of this negotiating process. I’m not saying it’s a good case that there was a good faith effort, but when did fairness stop the NFL from doing what’s best for “The League”?

Kroenke’s response (or, rather his team’s response, since we won’t see SK or hear directly from him during negotiations) will tell us a lot. If there’s a response asking St. Louis to do a lot more to keep the Rams here, I’d say we’ll know SK’s true intentions. Because the stadium plan put forth is more than fair. It’s not the 80,000-seat stadium and surrounding development in the L.A. plan, but SK could easily do something like that here if he ponied up more money — since the L.A. plan is all privately financed.

It’s a joke, really. We see that it’s possible to privately finance the entire L.A. project. But, in St. Louis, where the franchise admittedly isn’t worth nearly as much, we’re to accept that SK could only afford a $200M portion. Pshaw.

It’s not about what he can afford. It’s about return on investment. The St. Louis deal would cost less of Stan’s money, but the return isn’t as great either. The value of the Rams doesn’t go up anywhere near as much, and he wouldn’t control the revenue streams that come from the use of the facility.

[zn]

Zooey wrote:

It’s not about what he can afford. It’s about return on investment. The St. Louis deal would cost less of Stan’s money, but the return isn’t as great either. The value of the Rams doesn’t go up anywhere near as much, and he wouldn’t control the revenue streams that come from the use of the facility.

Well, you only get so much of the revenue stream–the NFL shares its gate money. And it even shares the luxury box money. So, while there will probably be an increase in both, it’s not like it will even balance out the costs of moving in SK’s lifetime.

And the value thing is interesting.

SK personally realizes no financial gain in his lifetime from the increased value. Unless he sells in 4 years when he’s 66.

The allure is simply the value itself.

Which is weird.

To me that’s a compulsion. To overlook any other consideration BECAUSE he has a chance to increase the on-paper value of his property? It just looks like a guy who is driven by that consideration alone, at the expense of other considerations.

In other words, it’s like he trades up for Park Place but doesn’t get rent from it. It’s just owning Park Place that gets him off.

[InvaderRam]

well forget about the gate money. what about the rest of the property, and the money he stands to gain from that? restaurants, shops, concerts, other sporting events besides the nfl.

i don’t know. i think there’s way more potential for him. not the nfl but for him. than in st. louis. a lot of tech companies sprouting up around that area and that means money money money…

[InvaderRam]

plus if he rents the stadium out to a second team. is that money shared?

[zn]

InvaderRam wrote:

well forget about the gate money. what about the rest of the property, and the money he stands to gain from that? restaurants, shops, concerts, other sporting events besides the nfl.

i don’t know. i think there’s way more potential for him. not the nfl but for him. than in st. louis. a lot of tech companies sprouting up around that area and that means money money money…

I do not know if the proceeds from having a “retail park” even balances the costs of moving, in his lifetime.

[GreatRamNTheSky]

Lets not forget there is another side to this whole story that you guys are not talking about. Stan moves the team to LA and then sells it for 3 billion and then becomes the owner of the Broncos.

Are there buyers who could pay the 3 billion? Oh hell yes! Steve Ballmer who just bought the Clippers, the Guggenheims who purchased the Dodgers and there is another fellow known as the richest man in LA but his name escapes me at this time.

Yah, there is a market.

Grits

[Zooey]

zn wrote:

I do not know if the proceeds from having a “retail park” even balances the costs of moving, in his lifetime.

You mean he will enrich himself by more than a billion dollars, and not have to pay taxes on it because of the way the numbers look on paper?

[zn]

Zooey wrote:

You mean he will enrich himself by more than a billion dollars, and not have to pay taxes on it because of the way the numbers look on paper?

I don’t know about any of that. But, I assume he has to pay a relocation fee (which is stiff) and of course there was buying the land, building the stadium, and moving the team. I am guessing that’s around 2.5 billion at least, all told.

I don’t think that any any revenue he gets annually from the facilities, the gate, the luxury boxes, and the “retail park” will add up to 2.5 billion in his lifetime.

I think his main thing is just the value of the franchise itself, which of course is not the same as cash flow.

[bnw]

zn wrote:

I think his main thing is just the value of the franchise itself, which of course is not the same as cash flow.

On paper value true except that he will be able to borrow against that increased value for an extremely low interest rate. It is the only guaranteed positive to come from a move to LA. Everything else is pure conjecture. In effect Kroenke will have created an instant $1.5-$2 billion credit line while not risking a dime of his own money. Simply put he keeps his personal $6 billion while getting up to an additional $2 billion in credit.

The upside to being a Rams fan is heartbreak.

Sprinkles are for winners.

[zn]

bnw wrote:

zn wrote:
I think his main thing is just the value of the franchise itself, which of course is not the same as cash flow.

On paper value true except that he will be able to borrow against that increased value for an extremely low interest rate. It is the only guaranteed positive to come from a move to LA. Everything else is pure conjecture. In effect Kroenke will have created an instant $1.5-$2 billion credit line while not risking a dime of his own money. Simply put he keeps his personal $6 billion while getting up to an additional $2 billion in credit.

Well he bought the land, the stadium is privately financed, and he presumbly would owe a relocation fee.

Like I said that’s probably around 2.5 B out of his own pocked.

My point was simply that he won’t realize any cash flow that will = 2.5 B.

Meaning, he would not be moving to MAKE money. He’s SPENDING money to move.

His real issue IMO is just increasing the value of his investment.

Plus of course having a brighter shinier thing.

[bnw]

zn wrote:

On paper value true except that he will be able to borrow against that increased value for an extremely low interest rate. It is the only guaranteed positive to come from a move to LA. Everything else is pure conjecture. In effect Kroenke will have created an instant $1.5-$2 billion credit line while not risking a dime of his own money. Simply put he keeps his personal $6 billion while getting up to an additional $2 billion in credit.

Well he bought the land, the stadium is privately financed, and he presumbly would owe a relocation fee.

Like I said that’s probably around 2.5 B out of his own pocked.

My point was simply that he won’t realize any cash flow that will = 2.5 B.

Meaning, he would not be moving to MAKE money. He’s SPENDING money to move.

His real issue IMO is just increasing the value of his investment.

Plus of course having a brighter shinier thing.

I see it as a wash. Kroenke’s a real estate tycoon and the largest one in the USA at that. An additional $2 billion in net worth for merely making investments he would have made anyway is a huge windfall even for him and he would know how to employ it to great effect. That doesn’t mean he’s going to move the team but is the only reason I can understand at this time.

• This reply was modified 9 years, 10 months ago by bnw.

The upside to being a Rams fan is heartbreak.

Sprinkles are for winners.

[zn]

bnw wrote:

I see it as a wash.

Then that gets me back to my original point.

I was just claiming that he is not moving FOR revenue. That’s not the motive. It can’t be. In terms of just generating revenue, his intake will never equal his expenses in his lifetime.

If it’s a wash, then we agree, the issue is not revenue.

The motive must just therefore be value. The franchise goes up in value, and plus is brighter and shinier. That’s what he cares about. That’s his thing.

Nothing else makes sense cause he’s not going to be making money off this, personally.

Whether or not he could afford to do that is beside the point. Yeah he can afford to pursue something with the sole purpose of increasing the on-paper value of his property. But see not everyone would do that. You do that if on-paper value is your holy grail.

[bnw]

zn wrote:

<div class=”d4p-bbt-quote-title”>bnw wrote:</div>
I see it as a wash.

Then that gets me back to my original point.

I was just claiming that he is not moving FOR revenue. That’s not the motive. It can’t be. In terms of just generating revenue, his intake will never equal his expenses in his lifetime.

If it’s a wash, then we agree, the issue is not revenue.

The motive must just therefore be value. The franchise goes up in value, and plus is brighter and shinier. That’s what he cares about. That’s his thing.

Nothing else makes sense cause he’s not going to be making money off this, personally.

Whether or not he could afford to do that is beside the point. Yeah he can afford to pursue something with the sole purpose of increasing the on-paper value of his property. But see not everyone would do that. You do that if on-paper value is your holy grail.

Except I don’t see a guy like Kroenke keeping that $2 billion windfall on paper, well on paper. He would use it.

The upside to being a Rams fan is heartbreak.

Sprinkles are for winners.

[Dak]

Do we even know that Kroenke would end up paying a relocation fee? He seems immune to the rules.

[Zooey]

I agree it’s for value, not cash flow. It does give him access to more cash, though, as bnw points out.

But I don’t think any amount of increased cash is really going to change Kroenke’s standard of living at this point.

It’s value, and a big, bold, shiny thing. He gets to host Super Bowls and Olympics and World Cups and Stuff.

[zn]

bnw wrote:

Except I don’t see a guy like Kroenke keeping that $2 billion windfall on paper, well on paper. He would use it.

Well … for what? He doesn’t need the money. Even then that means he pays interest. I just don’t think his main thing is revenues in any way, shape or form.

I agree with Zooey at this point.

Zooey wrote:

It’s value, and [owning] a big, bold, shiny thing. He gets to host Super Bowls and Olympics and World Cups and Stuff.

[bnw]

zn wrote:

<div class=”d4p-bbt-quote-title”>bnw wrote:</div>
Except I don’t see a guy like Kroenke keeping that $2 billion windfall on paper, well on paper. He would use it.

Well … for what? He doesn’t need the money. Even then that means he pays interest. I just don’t think his main thing is revenues in any way, shape or form.

I agree with Zooey at this point.

<div class=”d4p-bbt-quote-title”>Zooey wrote:</div>
It’s value, and [owning] a big, bold, shiny thing. He gets to host Super Bowls and Olympics and World Cups and Stuff.

Commercial real estate has taken a huge hit the past 8 years and private speculative ventures like proposed in LA are riskier still and another bubble is brewing, perhaps bursting in both residential and commercial real estate throughout the west and I suspect LA is not immune. Kroenke’s commercial properties are tied mostly to Wal-Marts as anchor tenants and Costco and another entrant to the mix are strong competitors so serious competition could change things for Kroenke. Such a large cushion for essentially doing nothing could be attractive in the years ahead.

The upside to being a Rams fan is heartbreak.

Sprinkles are for winners.

[InvaderRam]

i still think the cash flow will be way more than anything he could get in st louis.

so he’ll spend a couple billion while the value of the team increases by a couple billion. at least. although really my guess is that’s a very conservative estimate. it probably increases considerably more than that.

and on top of that the cash flow will be even greater than at st louis considering the non football retail space.

and on top of that he could collect additional cash through leasing the stadium out to a second team.

[zn]

InvaderRam wrote:

and on top of that the cash flow will be even greater than at st louis considering the non football retail space.

We know the cash will increase. That was never in dispute. It’s a given.

The question was, whether or not that revenue will ever equal his expenses for moving, which I estimated conservatively at 2.5 billion. To get that back in ten years his NEW revenue must be 250 M a year, and it’s not going to be that.

So what that tells ME anyway is that the revenue can’t be the motive, it must be the value of the franchise. It’s worth more in LA.

But that’s not cash flow. But then I don’t think he cares about that as much.

[InvaderRam]

i disagree. revenue is at least part of the motive. i don’t think it’s the sole motive or maybe even the main motive but it’s a significant factor.

[GreatRamNTheSky]

zn wrote:

<div class=”d4p-bbt-quote-title”>Zooey wrote:</div>
You mean he will enrich himself by more than a billion dollars, and not have to pay taxes on it because of the way the numbers look on paper?

I don’t know about any of that. But, I assume he has to pay a relocation fee (which is stiff) and of course there was buying the land, building the stadium, and moving the team. I am guessing that’s around 2.5 billion at least, all told.

I don’t think that any any revenue he gets annually from the facilities, the gate, the luxury boxes, and the “retail park” will add up to 2.5 billion in his lifetime.

I think his main thing is just the value of the franchise itself, which of course is not the same as cash flow.

Stan didn’t buy any additional land to what he purchased a year ago. He partnered with the Roderick company.
Sounds to me like the cost of building the stadium is already figured into the total cost of The City of Champions Project.
And both the Roderick Company and the Kroenke Group are going to be reimbursed via rebates based upon percentage for how profitable the who area is.

Is the physical move of the team going to cost a billion? I don’t know.

Is the relocation fee going to be a billion? Not according to some knowledgeable people I’ve heard talk on the subject.

Not sure where you get the 2.5 billion.

Grits

[GreatRamNTheSky]

http://www.nytimes.com/2015/01/13/sports/football/buffalo-bills-make-it-official-rex-ryan-is-their-coach.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=1

Jerry Jones “The Rams can move” from the NY Times. See the linc
JONES SAYS RAMS CAN MOVE When the St. Louis Rams owner Stan Kroenke announced plans last week to build an 80,000-seat football stadium near downtown Los Angeles, it raised the specter that he might unilaterally move his team to Southern California.

After his announcement, the N.F.L. reiterated that any team relocation must be approved by at least 24 out of the league’s 32 owners. The N.F.L. controls the Los Angeles market, and Commissioner Roger Goodell has said that any move there must be done in an orderly way.

But in an interview last week, the Dallas Cowboys’ owner, Jerry Jones, said that while he prefers that the owners approve any team moving to Los Angeles, a team could possibly move there without league approval.

Continue reading the main story Continue reading the main story

Continue reading the main story

“As it would turn out now, apart from the league saying no, you can move there,” he said. “Keep in mind that teams have moved without the permission of the league. They just have.”

Asked if Kroenke could move on his own, Jones said: “He can if the league says he can’t.”

Asked if the N.F.L. preferred to coordinate any relocation, Jones said: “Again, there are just certain things that clubs can do.”

Jones’s comments are bound to stir interest in a murky and emotional process because he is one of the N.F.L.’s most powerful and unconventional owners.
The league said last month that the Rams, the San Diego Chargers and the Oakland Raiders would not move to Los Angeles in 2015. But Kroenke has the ability to shift to a year-to-year lease at the Edward Jones Dome, where the Rams play.

That would give him the flexibility to leave St. Louis in the coming years.

“The idea of Stan going ahead and making his announcement was driven by all of the right things,” said Jones, who cited Kroenke’s having a deal for a location and his owning a team with “a great legacy.”

Jones added, “All of that is to me a very positive thing for Los Angeles and for the N.F.L.”

Last week, civic leaders in Missouri unveiled plans to build a new 64,000-seat outdoor stadium in downtown St. Louis to persuade Kroenke to stay. KEN BELSON

Grits

• This reply was modified 9 years, 10 months ago by GreatRamNTheSky.
• This reply was modified 9 years, 10 months ago by GreatRamNTheSky.

[Agamemnon]

GreatRamNTheSky wrote:

http://www.nytimes.com/2015/01/13/sports/football/buffalo-bills-make-it-official-rex-ryan-is-their-coach.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=1

Jerry Jones “The Rams can move” from the NY Times. See the linc
JONES SAYS RAMS CAN MOVE When the St. Louis Rams owner Stan Kroenke announced plans last week to build an 80,000-seat football stadium near downtown Los Angeles, it raised the specter that he might unilaterally move his team to Southern California.

After his announcement, the N.F.L. reiterated that any team relocation must be approved by at least 24 out of the league’s 32 owners. The N.F.L. controls the Los Angeles market, and Commissioner Roger Goodell has said that any move there must be done in an orderly way.

But in an interview last week, the Dallas Cowboys’ owner, Jerry Jones, said that while he prefers that the owners approve any team moving to Los Angeles, a team could possibly move there without league approval.

Continue reading the main story Continue reading the main story

Continue reading the main story

“As it would turn out now, apart from the league saying no, you can move there,” he said. “Keep in mind that teams have moved without the permission of the league. They just have.”

Asked if Kroenke could move on his own, Jones said: “He can if the league says he can’t.”

Asked if the N.F.L. preferred to coordinate any relocation, Jones said: “Again, there are just certain things that clubs can do.”

Jones’s comments are bound to stir interest in a murky and emotional process because he is one of the N.F.L.’s most powerful and unconventional owners.
The league said last month that the Rams, the San Diego Chargers and the Oakland Raiders would not move to Los Angeles in 2015. But Kroenke has the ability to shift to a year-to-year lease at the Edward Jones Dome, where the Rams play.

That would give him the flexibility to leave St. Louis in the coming years.

“The idea of Stan going ahead and making his announcement was driven by all of the right things,” said Jones, who cited Kroenke’s having a deal for a location and his owning a team with “a great legacy.”

Jones added, “All of that is to me a very positive thing for Los Angeles and for the N.F.L.”

Last week, civic leaders in Missouri unveiled plans to build a new 64,000-seat outdoor stadium in downtown St. Louis to persuade Kroenke to stay. KEN BELSON

Grits

http://theramshuddle.com/topic/relocation-thread-3-starting-with-charges-stirring-up-a-fight/#post-16413
I already posted that, grits.

Agamemnon

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