NFL, St. Louis Agree to $790 Million Settlement for Rams Relo Suit

·4 min read

The four-year litigation between the NFL and St. Louis over the Rams’ relocation is near resolution. The St. Louis Dispatch reported on Wednesday that the parties have agreed to a $790 million settlement following a mediation session. St. Louis Circuit Court Judge Christopher McGraugh, who would preside over a trial scheduled to start on Jan. 10, 2022, will need to approve a settlement before the litigation is removed from the docket.

A settlement has long been the most likely outcome. Once the NFL failed to convince Missouri courts to dismiss the lawsuit, the case became more threatening to league executives and owners. This has been apparent in recent months. The three plaintiffs—the city and county governments and the public entity that owns the Dome at America’s Center—have used pretrial discovery to compel the NFL and owners to turn over financial records and provide sworn testimony about the circumstances that led to the Rams relocation in 2016.

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A trial, which could have been televised, would have posed multilayers of risk to the NFL. The jury would have consisted of St. Louis residents, who might have been inclined to blame the NFL for their lost franchise and to award billions of dollars in damages. NFL commissioner Roger Goodell, Rams owner Stan Kroenke, Cowboys owner Jerry Jones and Patriots owner Robert Kraft, among others, would have been potential witnesses. They would have faced aggressive cross-examination by St. Louis attorneys. While under oath, NFL witnesses could have been forced to make unflattering disclosures about the Rams move. They might have also contradicted one another, which would have embarrassed them and the league.

The NFL also has a track record of reaching settlements before cases go to trial. This was notable in the concussion litigation, which was ultimately settled for $1 billion. Even in NFL cases that progressed to hearings, substantive rulings and in some instances appeals—such as Murphy v. NCAA, NFL et al. (sports betting), Brady v. NFL (Deflategate) and Collins v. NFL (La’el Collins drug test)—they consisted mainly of assertions raised by attorneys in written briefs and oral arguments.

The $790 million figure is a manageable one for the league, which generates more than $15 billion a year in revenue and features 32 franchises all of which are worth at least $2.4 billion. If each team pays an equal amount towards the settlement, each will pay $24.7 million—about $2 million less than Rams QB Matthew Stafford’s 2021 salary.

Still, the NFL had to overcome five key barriers to a settlement.

First, the plaintiffs enjoyed sizable leverage in settlement talks and had incentives to draw out the proceedings. The case has generated negative publicity for the league, with damaging leaks and indications owners didn’t trust each other. St. Louis would have also been heavily advantaged going into a trial. A trial could have damaged the reputations of influential league personnel.

Second, the league firmly regarded the lawsuit as meritless. The St. Louis plaintiffs sued over a contractual arrangement—the league’s relocation policy—in which they were not parties. The policy was contained in a contract governing the league and owners, but not host cities or associated governments. It also mandated arbitration before litigation. The league logically argued it owed no legal duty to the St. Louis plaintiffs, which contended they were third-party beneficiaries of the relocation policy. The NFL also maintained St. Louis had alleged false facts. The league insisted it fully satisfied contractual requirements that owners engage in good faith efforts to remain in a current market and operate in a manner designed to maximize fan support.

Third, while the media has portrayed the lawsuit as one threatening billions of dollars in damages, the NFL likely projected a lower figure. For instance, the $550 million relocation fee wouldn’t have been paid to St. Louis if the team stayed. While jurors can assign punitive damages that dwarf actual damages, the league’s calculus on damages probably differed from those of journalists.

Fourth, a settlement unavoidably supplies a playbook to future cities that lose NFL teams: They should sue the league and expect to collect.

Fifth, the NFL wasn’t speaking with one voice on the litigation, which disrupted settlement talks. Kroenke and his attorneys threatened to settle without the NFL’s involvement, and they insisted an indemnification agreement, which the league believes requires Kroenke to largely pick up the tab for the litigation, ought to be narrowly construed. NFL governing documents indicate a contractual dispute between Kroenke and the NFL would be resolved in arbitration, though, as explained on Sportico, there are several ways courts could have become involved. It’s unclear if Kroenke and the NFL have fully resolved their internal dispute over shared responsibilities to pay St. Louis, though that issue did not preclude a settlement.

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