Now that the 2021 season has ended with the Rams winning the Super Bowl, a significant in-season legal setback must be addressed, eventually.
As explained by Ben Fischer of Sports Business Journal, the question of whether Rams owner Stan Kroenke will pay all or most of the $790 million settlement with St. Louis still lingers.
At the time the case was settled at mediation by the NFL’s lawyers — for an amount less than Kroenke’s lawyers would have agreed to pay to St. Louis, as a source with knowledge of the dynamics previously explained it to PFT — the league’s position was simple. The money would be charged to Kroenke’s account. In other words, the league would subtract the $790 million from payments made to the 32 teams via shared revenue, such as the multi-billion-dollar broadcasting deals.
Fischer reports that many owners still regard the situation as “an open-and-shut case,” given that Kroenke agreed to indemnify his partners upon securing permission to move the team from St. Louis to Los Angeles. Kroenke’s position was and still is that the implosion of the common defense wasn’t his fault. His lawyers have blamed, for example, arguments made by the Chargers and Raiders during the competition for L.A. relocation approval as providing the blueprint for the St. Louis lawsuit. Likewise, Kroenke may contend that deposition testimony from other owners (particularly Panthers founder Jerry Richardson) backed the league into a corner, forcing the massive payment to conclude a case the league initially regarded as a pimple on its posterior.
As PFT explained at the time, the indemnity language contains a gaping loophole. By referring only to “costs,” the obligation arguably doesn’t encompass the settlement or judgment.
And while the league would surely take the position that the Commissioner must resolve all relevant legal questions (a handy device for stacking the deck), Kroenke would have a potential avenue to take the fight to court, arguing that the arbitration obligation extends only to the costs that should be paid, and not to the question of whether the settlement constitutes an indemnified cost.
The matter will be discussed at the March meetings, per Fischer. A resolution isn’t expected.
If a fight ensues, it could have real ramifications for the league office, and specifically for general counsel Jeff Pash and the outside lawyers who drafted the indemnity paperwork. If a judge concludes that the ball was dropped on the fairly simple question of whether the paperwork was properly written, the fault begins with the lawyers who wrote it, and it extends to the general counsel who approved it.
Ultimately, the buck (all 790 million of them) stops on the desk of Roger Goodell.