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Wednesday, August 17, 2011 / 4:40 PM

Be Afraid, St. Louis Rams Fans: The Mogul Pushing For an NFL Team in L.A. is Stan Kroenke’s Partner

An effort to bring NFL football back to Los Angeles took a big step forward last week, with the L.A. City Council voting 12-0 to approve the framework of a $1.2 billion downtown stadium deal with Denver billionaire Philip Anschutz.

That step solidified the front-runner status of Anschutz and his giant sports-and-entertainment conglomerate, AEG Live. It also places the story in the category of much-too-close-for-comfort for fans of the St. Louis Rams.

Unreported in St. Louis—but painfully relevant—is this:

Anschutz not only is a good friend—but is a successful business partner—of fellow Denver billionaire Stan Kroenke, sole owner of the Rams. Just two years ago, the two moguls formed a joint venture in Colorado to run the 6,000-seat Broomfield Event Center (now the 1st Bank Center).

They’ve apparently been pretty successful, which isn’t shocking, seeing as how they’re two of the most prosperous businessmen on the planet (a fact that, tellingly, didn’t prevent them from receiving public assistance). And with Anschutz needing to lure an existing NFL franchise to L.A.—the NFL has made it clear that expansion is not on the table—why not throw in with an existing friend and partner?

Their association goes back to at least 2003, when Kroenke purchased the Colorado Rapids of Major League Soccer (MLS) from Anschutz, who at the time owned five of the other nine MLS franchises.

Anschutz has been mentioned before as a possible partner of Kroenke's in the Arsenal soccer club, and last year there was speculation that they would become friendly rivals. The London Guardian reported that “the pair have long been close, are both based in Denver and have intimate business links through shared sports-and-entertainment investment in Colorado.”

This is news to St. Louis. The Post-Dispatch is apparently unaware of any connection between the two men, having never referenced one. In June—when the story broke that Anschutz’s company had approached the Rams and four other NFL teams about moving to Los Angeles—one was left with the impression that Anschutz’s presence actually lessened the prospect of Kroenke heading for the Left Coast.

“If billionaire Philip Anschutz—the billionaire behind the L.A. project—wants a team, the Rams may be the wrong fit. He's apparently looking to purchase a team as part of moving it to L.A.,” wrote Post sports columnist Bernie Miklasz. “Why would Kroenke want to sell the Rams to Anschutz? Kroenke helped bring the Rams to St. Louis in 1995 by stepping forward to become Georgia Frontiere's ownership partner and buying 40 percent of the team.”

Why would Kroenke want to sell the Rams to Anschutz? Well, let’s see. They’re trusted old friends and partners, and together they would bring staggering economic power to an NFL franchise. Last year, Forbes ranked Anschutz as the 34th wealthiest American, with an estimated net worth of $7 billion (three spots ahead of St. Louis’ wealthiest citizen, Jack Taylor). On the same list, Kroenke and wife Ann Walton Kroenke were scraping along with her $3.2 billion (98th place) and his $2.7 billion (130th place).

Together, the two would share (in some fashion) ownership of a revived team in the nation’s second-largest media market playing in a state-of-the-art $1.2 billion stadium. They would be the toast of the NFL for returning football to Los Angeles and might even be forgiven for abandoning the stagnant city that was formerly best known in league circles for having sued the NFL.

Compare that with Kroenke having sole ownership of a team playing in an outdated dome that is hopelessly below NFL standards, in a market that has never embraced him personally, and one that is perceived nationally as old and declining at best. Just this week, American City Business Journals ranked St. Louis as the 7th “most overextended market” with regard to its ability to support its sports franchises, among 85 areas studied in the U.S. and Canada.

Kroenke, who doesn’t live here and never has, would have to be mad to leave all that behind, wouldn’t he?

Even if Kroenke’s goal is to have his very own team to himself, there’s another scenario that wouldn’t favor St. Louis. Kroenke and Anschutz might form their Los Angeles partnership for the relative short run, anticipating that one of them might someday have the opportunity to break off and acquire their hometown Denver Broncos, owned by Pat Bowlen, who is reportedly in poor health. (Kroenke’s family already owns the Denver Nuggets and Colorado Avalanche, among its many holdings in the region.)

That scenario is pure speculation, but this much isn’t: In Los Angeles (admittedly, no St. Louis), the two could hold court as part of Anschutz's amazing L.A. sports empire.

Anschutz is already an icon in Los Angeles for his key role in developing the $2.5 billion L.A. Live complex, adjacent to the famed Staples Center, which he owns, along with two of its primary tenants, the NHL's Kings and WNBA's Sparks, along with a stake in the NBA's Lakers. And so on.

Anschutz’s company, Anschutz Entertainment Group, “is the world's largest owner of sports teams and sports events, the owner of the world’s most profitable sports and entertainment venues, and under AEG Live the world's second largest presenter of live music and entertainment events,” claims its Wikipedia page.

For now, Kroenke’s St. Louis Rams continue to maintain the team's interest in staying in St. Louis and presumably is negotiating for some form of new public subsidy, either to upgrade the Edward Jones Dome sufficiently (likely an impossibility) or to provide them with an entirely new stadium (an improbability, given the region’s financial straits).

In the meantime, though, it might not be a bad idea for Rams’ fans to keep an eye on the proceedings in Los Angeles. The Anschutz stadium plan is far from a done deal: He still faces competition for a franchise in L.A., must clear some tough environmental hurdles, and—most importantly—has to find a team to buy or partner with.

Presumably, the four other NFL franchises contacted by Anschutz—San Diego, Minnesota, Jacksonville, and Oakland—are still in the mix. None of them, however, is known to be owned by a business partner of Anschuetz, so to assume that a return of the Los Angeles Rams isn’t an option would be the height of naivety.

You wouldn’t know this from the pathetic state of denial in St. Louis media. The Post reluctantly covered the news of the Los Angeles City Council’s unanimous pro-Anschutz vote with a wire story headlined, “L.A. stadium study appears to overstate tax benefits.”

Wow. Now that’s some spin.

With the exception of the Riverfront Times and St. Louis Public Radio, the movement toward a new NFL franchise—and its clear implications for St. Louis—received no coverage here at all. Maybe that’s a good strategy: If St. Louis closes its eyes and wishes real hard, perhaps all this will just go away.

Hopefully for St. Louis, Miklasz's June 12 advice is right that it’s “way too early to panic about Rams.”

Or if this comes down to a certain friendship, it may be too late.

SLM co-owner Ray Hartmann is a panelist on KETC Channel 9’s Donnybrook, which airs Thursdays at 7 p.m.

 

When posting, please be respectful. Avoid profanity, offensive content, and/or sales pitches. Stlmag.com reserves the right to remove any comments or to contact you if necessary.

Old to new | New to old
Aug 18, 2011 11:40 am
 Posted by  ProjectX

I don't think you're scenario about breaking off to buy the Broncos is that far off. Kroenke Sports owns most of the franchises in Denver, and Kroenke himself owns the Rams. AEG owns (or partially owns)many franchises in Los Angeles. Anschutz himself can still purchase an NFL team without breaking the ownership rules. Teaming up with Kroenke and waiting out the sale of the Broncos, gives them the opportunity to further consolidate the sports in their respective markets. In the end Anschutz owning the Rams in LA and Kroenke owning the Broncos in Denver is a a solid hypothetical.

Aug 18, 2011 11:54 am
 Posted by  Midwest Mafia

This again?? Anschultz and Kroenke are business partners and friends?? GEE, WE NEVER KNEW THAT! WHAT EARTH SHATTERING NEWS!! Give me a break. All this is is another grassy noll conspiracy theory that will amount to nothing. Stan and the Rams aren't going anywhere and the sooner the people in LA accept that fact the better. I hope when this is all said and done Kroenke changes the name just to completely distance ouselves from LA altogether.

Hope you sold a lot of papers!!

Aug 18, 2011 12:15 pm
 Posted by  Realisitc

While the advice to keep an eye on LA is prudent, this post completely misses the mark regarding situations outside St. Louis. The LA group is looking to move quickly, something that's almost certainly not going to happen with the Rams. The San Diego Chargers are considered odds on favorites to be "the team" in LA circles. Their stadium is even more outdated than the dome, and they're the team that LA football fans have been left watching for the decade and a half since the Rams bolted. The fan base is built in. On top of that, there are other franchises that are in far worse financial shape than the Rams, (see the situations in Buffalo and Jacksonville). A buyer would have much more leverage with those clubs to get a better buy. Also, while St. Louis may be seen as fading, it's a significantly larger TV market(21) than Buffalo(51), or Jacksonville.(49) The league would be giving up many fewer television sets if one of those teams moves. That may not matter to individual owners, but it's an issue for the collective and the commissioner, who would have to approve any sale.
I get the idea that people want to do business with those they trust, but when millions of dollars are on the line, friendship takes a backseat, and the players in this game are shrewd enough to know that.

Aug 18, 2011 03:43 pm
 Posted by  LA RAMS AGAIN

Realistic, Midwest Mafia & ProjectX are among those in denial who hope this just goes away. There will be two teams in the LA Stadium because that's what the league wants.

For all of you who keep pointing out Kroenke's from Missouri, who cares. His U.S. sports interests are in Denver Colorado. If he were so hell-bent on keeping the Rams in St. Louis (which is a possibility)and keeping pro sports in St. Louis solidified, why wouldn't he trade the Colorado Avalanche for the St. Louis Blues? Why doesn't he move the Denver Nuggets to St. Louis? He won't because he can't make the amount of money he makes in Denver with those two franchises in St. Louis.

Same with the Rams. Let's see....the $1 dollar I can make in St. Louis if I keep the Rams in Market #21 would turn into $20 in Los Angeles which is Market #2.....hmmmmmm....let me think. That makes a whole lot of money for me and the other 31 teams!!!

Like I said. It's quite possible the Rams will stay in St. Louis. But the numbers just don't add up to that. St. Louis will need tax-payer $$ to renovate the Jones Dome or build a new stadium. That's not going to happen. FARMERS FIELD is, essentially, given to any team FREE. AEG is flipping the entire bill at no cost to L.A. Tax-payers.

What's reality is L.A. will be back in the NFL soon, and should never have been abandoned 16 years ago in the first place. That happened because both the Rams and Raiders were asking for public (city & taxpayer)help to renovate old buildings or build new ones. To this day, any gov't entity in California will not or ever commit taxpayer $$ for new sports buildings. In 1993, St. Louis was almost done building the then new Jones Dome, using taxpayer $$ to build, and was a profitable option for Georgia, Kroenke and the NFL. L.A. couldn't provide the profit St. Louis could at that point.

The roles have reversed.

The obvious reason the Chargers, Raiders and 49ers are prime candidates to move....because they play in the oldest stadiums in the league.

Using the same model as the New Jersey Meadowlands Stadium shared by the Jets and Giants, the 49ers and Raiders are negotiating to share a brand new, privately funded, stadium in Santa Clara. The league likes that "partnership model" and want the same in Los Angeles. The two teams that make the most sense are the Chargers and the Rams, who moved to St. Louis after 49 years in Los Angeles. They were supported and will be again IF (a big IF for you fine Midwest STL people)they do move back to Los Angeles.

Sep 11, 2011 05:54 am
 Posted by  St. Louis in trouble

To Realistic. Man, do I ever wish you were right. While your points have been made by some, either hopeful or ignorant local STL writers . . . sadly- most don't hold up. No, it is very unlikely the issue of LA wanting to move fast and immediately on putting a team in that stadium, will be a major hang up in the Rams not landing there. At quick glance that might seem to be the case. but everyone close knows that is not a factor. The timing of the L.A. stadium has been pushed back anyway. Buffalo's owner refuses to move and if he does- or if he dies- the NFL is very concerted in having a team in Toronto if possible. And Buffalo has been tagged for that purpose. Jacksonville would seem the team to transfer, but so far Weaver is staying true to his efforts to keep the team in Jacksonville. San Diego seems a possibility though the NFL is not happy about simply moving the team up the highway. They want the NFL market to have San Diego. And even if so . . . there is a great chance that L.A. will end up w/ two teams. REALISTIC, your points made are wishful thoughts- though well intended- conjured up by the STL media in the hopes that the Rams will stay here. It pains me greatly to say it, but not at all likely at this point.

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