OT: LA Rams going broke?

Posted on: May 12, 2020 at 19:48:48 CT

Just theorizing here, based on what we know to be true.

But there are some very peculiar things going on with the Rams, that we don't see in today's sports economy.

#1 They aren't paying salary owed to Todd Gurley and Clay Matthews.

They admit they owe it.. but they are playing semantics with contract language on when it is to be paid. Clay Matthews actually filed a greivance. And Gurley is actively, publicly calling out the Rams every few days.

It's weird because it's just suicide to become known as an organization that doesn't pay players what they owe, on time. That they will haggle with you and string you along and force you to file grievances to get it.

Even if that Rams are technically right, they are stupid for not just paying it, since the money is peanuts in the overall grand scheme. They admit they owe it eventually anyway. And they would avoid become an undesirable destination for players.


2. Stadium costs (from $1.8 billion to nearly $6 billion)

In 2015, the estimated cost would be $1.8 billion. Even if that was a conservative number Kroenke used just to bamboozle local LA and CA state officials into fast tracking his development... it's still way, way, way under what the actual costs have become. Which is now around $6 billion in construction costs.

3. STL Lawsuit

St. Louis (on behalf of state and local) filed a very large lawsuit against the Rams, and all other 31 NFL teams.

They are coming for all damages related to expenses of the failed Riverfront project, as well as over $1 billion in the relocation fees the owners were trying to enrich themselves with from the Rams and Chargers moving to LA. ($600 million fee they were each paying to the other 30 owners).

As part of the internal relocation agreement - The Rams agreed to accept full liability for the entire league, should any lawsuits arise.

Little did they know it would get to a point where it would cost them over $1 billion.

They have appealed and been rejected at every step along the way in court... losing their last battle to keep this out of court.

They now have to settle or go to trial.

In the STLPD they said the STL team could try and get 2-3 times the damages - meaning $2-3 billion.

The Rams are listed as being worth $3.8 billion from Forbes... which includes the fact they are getting a brand new stadium.

The construction costs of the LA stadium + relocation costs + lawsuit costs = nearly $8 billion or more. Maybe $9B or $10B depending on how costly the lawsuit ends up being.

There is no way Kroenke would ever let the liabilities of his NFL asset impact his personal assets or his other companies and interests.

I would imagine the liability resides with the franchise. That way if it fails, its upon the league and owners to rescue everything, not his personal finances and other companies.

Are the Rams having cash flow problems?

Is this why they aren't paying two very high profile players from the NFLPA rather insignificant money they are owed?

Kroenke's companies are private and there is a lot we don't know. But I just can't see how the costs he has incurred in construction and lawsuits can be worth the move.

Especially with the uncertainty of how much legal fees he has incurred.

I think this is a much bigger and fascinating story that the media has barely touched upon.