ST. LOUIS (CN) – The National Football League violated its own relocation guidelines in favor of added revenue in allowing the Rams to move from St. Louis to Los Angeles, three St. Louis entities claim in court.
The city of St. Louis, St. Louis County, and the St. Louis Regional Convention and Sports Complex Authority, also called RSA, filed their lawsuit Wednesday in St. Louis City Circuit Court. The complaint names the NFL and all 32 teams and their owners as defendants.
St. Louis claims the Rams failed to meet the league’s relocation guidelines, which were adopted in 1984 after the Ninth Circuit ruled the NFL had violated antitrust statutes regarding the Raiders’ move from Oakland to Los Angeles.
“The Relocation Policy specifically provides that, prior to any relocation, ‘clubs are obligated to work diligently and in good faith to obtain and maintain suitable stadium facilities in their home territories, and to operate in a manner that maximizes fan support in their current home community,’” the complaint states. “Each club’s primary obligation is to ‘advance the interests of the League in its home territory.’”
NFL spokesman Brian McCarthy said in an emailed statement that there is no legitimate basis for the lawsuit.
“While we understand the disappointment of the St. Louis fans and the community, we worked diligently with local and state officials in a process that was honest and fair at all times,” McCarthy said.
As part of the policy, team wishing to move must submit a proposal about certain factors that have been addressed with the team’s current market.
Those factors include: the extent to which the club has satisfied its “principal obligation” of “serving the fans in its current community;” the extent to which fan loyalty to and support for the club have been demonstrated in the current community; the willingness of the stadium authority or community to replace a deficient current stadium; the extent to which the club received direct or indirect public support for its current facility; the degree to which the club has engaged in good faith negotiations with the stadium authority and others concerning terms and conditions under which the club would remain in its current home territory; and the extent to which the owners or managers of the club contributed to circumstances that might demonstrate a need for relocation.
“Under the Relocation Policy, teams must work with diligence and in good faith to remain in their home community and cannot relocate unless the Policy is satisfied,” the 52-page lawsuit states. “With the Relocation Policy in place, plaintiffs made substantial investments in [the Edward Jones Dome.] Plaintiffs paid expenses and interest on 30-year bonds used to finance the construction. The City and County both paid 25% of the bond obligations, including millions in maintenance expenses. The City and County each incurred bond cost obligations of $180 million. The City and County collected hotel taxes to service their obligations and paid these obligations out of general revenue funds.”
The plaintiffs claim they installed a new playing surface and made $30 million in renovations to the Edward Jones Dome, including the installation of two new end zone video scoreboards.
They say they also agreed to a team-friendly lease, which included providing the Rams parking, 100 percent of concession revenues, 75 percent of advertising revenues and other guarantees. The lawsuit states that the Rams’ rent to use the dome was low enough to be covered largely by the advertising sold in the building.
“In the years leading up to the Rams relocation request, Rams officials decided to move the team and confidentially determined that they would be interested in exploiting any opportunity to do so,” the complaint states. “Notwithstanding this intention, the Rams ownership and management made contrary public statements with the intention that plaintiffs would rely on these statements.”
The lawsuit makes specific reference to numerous statements made by Rams owner E. Stanley Kroenke and Chief Operating Officer Kevin Demoff in 2011, 2012 and 2014 that specifically acknowledged the team’s strong fan support in St. Louis and the team’s commitment to staying in St. Louis.
The lawsuit states that NFL Commissioner Roger Goodell made similar statements.
“Mr. Goodell also acknowledged that the fans had supported the team in St. Louis and that the League should do what was necessary to make the team successful in St. Louis, stating, ‘I think instead of overreacting we should make sure we do what’s necessary to continue to support the team locally as the fans have done in St. Louis. And make sure we can do whatever we can to make sure that team is successful in the St. Louis market,’” the complaint states.
In reliance of those statements, the St. Louis entities claim they took actions in an attempt to design and develop a new $1 billion stadium site for the Rams.
Those actions included: authorizing the hiring of professionals and entered into contracts to plan, develop, finance, and construct a new stadium complex; beginning land assembly for a new stadium complex development, including entering into option contracts concerning land in the development area; entering into a letter agreement with a nationally-recognized architecture firm for architectural work, which proceeded through concept design and schematic design phases into the design development phase; entering into an agreement concerning movement of railways and transmission lines within the development area; and initiating and prevailing in litigation to clarify the RSA’s authority to enter into a financing plan for the development and construction of a new stadium complex.
The actions they took also reportedly included: hiring consultants for engineering, environmental conditions, geotechnical conditions, sponsorship and naming rights opportunities, bonding, etc., as well as a structuring agent with a particular focus on seat licenses; applying for and conditionally receiving $50 million in contribution tax credits and applied to be and was accepted into the Missouri Brownfields/Voluntary Cleanup Program; communicating with representatives of the NFL and some owners of defendant member teams to apprise them of these and other actions taken with respect to developing a stadium complex; and passing an ordinance providing for assistance to the proposed stadium complex.
The plaintiffs claim during that same time the Rams publicly announced their stadium plans in Inglewood, Calif., team officials moved practices to California and failed to work in good faith – or even at all – with the plaintiffs.
“The Rams never intended to engage in good faith negotiations with St. Louis,” the complaint states. “In contrast to his prior statements, Mr. Demoff admitted in a January 2016 interview in Los Angeles that he ‘always dreamed that he could be part of bringing the NFL back to Los Angeles.’ He also admitted that Mr. Kroenke, who inspected the California property in the summer of 2013, called him at that time and told him that the location was ‘an unbelievable site’ for a football stadium. Mr. Demoff stated that this call from Mr. Kroenke was one of the ‘moments in your life you never forget.’”
The lawsuit further alleges, “Jeff Fisher was hired as the coach of the Rams in January of 2012. He stated in an interview in December 2016 that he was informed of the Rams’s plans to move to Los Angeles when he was interviewed for the coaching job. Fisher explained that, ‘I was very fortunate to have some options,’ referencing his return to coaching in 2012, and stated, ‘I decided on L.A., or St. Louis, at the time, knowing that there was going to be a pending move.’ Thus by the end of 2011, and in no event later than January of 2012, the Rams had plans to move to Los Angeles and all statements in support of the St. Louis location described above (either by the NFL or the Rams) were knowingly false when made.” (Parentheses in original.)
In approving the Rams’ move, the NFL and its teams allegedly violated the relocation policy by: failing to require the Rams to advance the interests of the league in its home territory, including maximizing fan support; allowing the Rams to move when their viability in their home market was not threatened; failing to require the Rams to work in good faith with their home market; and by failing to allow plaintiffs material in a timely fashion to respond adequately to the proposed transfer, among other things.
“On December 17, 2015, Roger Goodell, with reference to St. Louis stadium financing, stated that a St. Louis proposal assuming a commitment by the NFL to provide $300 million for funding toward a stadium in St. Louis was ‘fundamentally inconsistent with the NFL’s program of stadium financing,’” the complaint states. “This was inconsistent with prior statements by NFL representatives. Indeed, less than one month later, the NFL promised precisely that amount to two other franchises to help defray the costs of new stadiums in their home markets. Relatively little progress had been made in those cities to generate a stadium development plan that compared with that of St. Louis, or any development plan at all.”
The complaint adds, “Similarly, the Rams refused to meet with the public officials responsible for the St. Louis commitment to a new stadium. Mr. Kroenke never met with Mayor Francis Slay. Similarly, Mr. Kroenke refused to meet with the Governor of the State of Missouri even to the extent that the Governor had to fly to New York for the purpose of informing the NFL that Mr. Kroenke would not meet with him.”
“The NFL and the Rams made admissions that the move to Los Angeles was for improper reasons. After the vote approving the Rams’s relocation to Los Angeles, [Dallas Cowboys owner] Jerry Jones suggested that St. Louis should get another team and stated that St. Louis is ‘certainly an NFL town without question.’ Similarly, Mr. Goodell admitted that St. Louis would be a proper place for an NFL franchise should a valid stadium proposal be submitted. As discussed above, such a proposal was submitted. Mr. Kroenke’s statement that he had to move because he ‘never dreamed [he’d] be put in this position’ and that he was ‘not going to sit there and be a victim’ was so obviously false as to demonstrate that he knew he was not entitled under the Relocation Policy to move the team to Los Angeles.”
The plaintiffs claim the move to Los Angeles benefitted the Rams and the NFL improperly. After the move, Forbes estimated that the Rams’ worth doubled to $3 billion and the NFL gained by the Rams paying a $555 million relocation fee, all at the expense of St. Louis.
“The City of St. Louis has lost an estimated $1.85 – $3.5 million each year in amusement and ticket tax collections,” the complaint states. “It has lost approximately $7.5 million in property tax. It has lost approximately $1.4 million in sales tax. It has lost millions in earnings taxes. The City of St. Louis will have lost over $100 million in net proceeds due to the improper conduct described above. The County of St. Louis has lost hotel and property tax revenue, as well as sales tax revenue. The failure to approve the new stadium cost approximately 2,750 jobs in construction and more than 600 jobs per year in the City of St. Louis. The average annual state revenue impact exceeds $15 million.”
The St. Louis entities seek restitution of the wrongfully obtained relocation fee and punitive damages. The suit was filed by attorneys with St. Louis law firms Blitz, Bardgett & Deutsch and Dowd Bennett.