NFL and Rams attain $ 790 million settlement in St. Louis transfer

Dallas Cowboys owner Jerry Jones, left, with Los Angeles Rams owner Stan Kronke prior to an NFL playoff football game at the Los Angeles Memorial Coliseum on Saturday January 12, 2018 in Los Angeles, California.

Keith Birmingham | MediaNews Group | Getty Images

The National Football League and Los Angeles Rams owner Stan Kroenke have reached a $ 790 million settlement with officials in St. Louis, the city said on Wednesday.

The settlement stems from a lawsuit over the Rams’ relocation to Los Angeles in 2016. The city, St. Louis County, and the Regional Convention and Sports Complex Authority sued the NFL and the Rams in 2017. They alleged the league was honoring its own non-relocation policy and was negotiating in good faith to seek the relocation of the Rams from St. Louis to prevent.

“This historic agreement closes a long chapter for our region by raising hundreds of millions of dollars for our communities while avoiding the uncertainty of the trial and appeal process,” said St. Louis Mayor Tishaura Jones and district chairman Sam Page in a mutual opinion. “The city, the district and the STLRSA are still determining how the comparison means will be allocated.”

The settlement also comes shortly before a trial scheduled for January. Earlier this month, the NFL and the Rams lost their efforts to relocate the case in Missouri to the team’s former home in St. Louis.

The defendants in the lawsuit are Rams owner Kroenke Sports & Entertainment, the other 31 professional soccer teams and their owners. The lawsuit sought at least a billion dollars in damages.

The St. Louis Post-Dispatch reported the settlement first.

The NFL also risked sensitive documents about the NFL owners’ finances becoming public when the case goes to court. St. Louis Circuit judge Christopher McGraugh, who handled the case, fined four NFL owners around $ 44,000 last October for failing to produce financial documents. Another hearing on this matter was also scheduled for December.

St. Louis officials are demanding financial damages allegedly suffered when the Rams moved to Los Angeles. The move left St. Louis in debt on the team’s former stadium, which was publicly built.

An exterior view of The Dome at America’s Center ahead of the St. Louis Rams 29-24 victory over the Philadelphia Eagles in St. Louis, Missouri.

Elsa | Getty Images

Officials claimed the city lost between $ 1.85 million and $ 3.5 million a year in amusement and ticket tax collections, an additional $ 7.5 million in property taxes, and $ 1.4 million in sales taxes, in what a total of more than 100 million US dollars in annual income.

The lawsuit also alleges that the County of St. Louis also lost hotel, property, and sales tax revenues after the Rams moved. The state impact amounts to more than $ 15 million, according to the lawsuit, using figures from the Missouri Department of Economic Development.

According to the lawsuit, St. Louis officials also requested a portion of the increased rating related to the Rams’ relocation. That sum exceeds $ 1 billion.

The NFL also risked the lawsuit making headlines in early 2022, at the same time as the Super Bowl LVI – which will be played in the Rams’ new home complex, SoFi Stadium.

So the deal was a “smart move,” sports attorney Irwin Kishner told CNBC on Wednesday.

“The fact is, the St. Louis judicial system has favored the hometown heavily,” Kishner said. “Why years of litigation, paying millions in fees, and the uncertainty of litigation? It just made sense so people could focus on better things.”

When asked about the more than 700 million US dollars that were reported, Kishner called the amount “fair” but made no further comment. “We don’t know enough about it,” he said, and asked if the severance pay would be over a period of years or in advance.

Patrick Rishe, director of the sports business program at Washington University, called the large number of severance payments “unprecedented,” especially considering that cases like this usually favor sports leagues and owners.

“If you asked sports managers or sports lawyers four years ago, ‘What do you think this case will be satisfied with?’ I think most people would have said zero, “said Rishe. “The fact that the city can get away with nearly $ 800 million is not only unprecedented, but will leave its mark on every team and league.

“Owners and leagues need to be transparent and open and follow the rules or this could happen,” added Rishe.

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