In Effort to Keep Rams, St. Louis CVC Offers $60M, Asks Team for $64M to Push Dome to “Top Tier”

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EJ Dome w windowsThis is a story that’s a long way from being finished. Today was step one of several that will reveal whether the Rams will stay in St. Louis. In my opinion, Stan Kroenke already knows if the Rams will stay or go. No matter the details of the lease, if the Rams are determined to go, they will go and the NFL will help them. All that remains is how ugly the break up will be. Of course if the Rams stay, the negotiation now underway presents an opportunity for the Convention & Visitors Commission, Kroenke, and the City of St. Louis to build mutual respect and an impassioned fan base. If they stay, they will likely stay for a long time. L.A. is the outlier and more $1B+ stadiums can’t be expected to pop up in the near future to lure teams to new cities.

But what does the NFL want? Clearly Los Angeles will have a team in the near future. But does the NFL think the Rams are that team? Would the league abandon the 18th largest Metro area in the nation? Surely having a second team leave in less than 20 years would nearly preclude a new team in the future. The Rams were terrible on the field this past season and attracted the second fewest fans per game. Only the Bengals were worse. The Rams returning to L.A. storyline is a good one (for them). Kroenke bidding to buy the Dodgers seems to bolster the probability of a Rams move.

St. Louis Convention and Visitors Commission Stadium Renovation Proposal to the Rams

The requirement that the Edward Jones Dome be in the “top tier” of NFL stadiums by 2015 seems a tailor made “out” for the Rams. But “top tier” is vague and specific at the same time. It’s likely an arbitrator (after the Rams and CVC fail to agree on stadium enhancements, and who pays for them) will decide, and while the dome may seem dingy and dark to some, the “top tier” requirement concerns box suites, club seats, stadium seats, sound, lights, scoreboards, concessions, and so on. Taken one-by-one it would appear that each could be successfully addressed.

The basic bullet points of the proposal are these:

  • Addition of a 96ft x 26ft scoreboard over midfield – making it one of the largest in the league (the screens in Dallas measure 160ft x 72ft)
  • New, three-story addition to the stadium on Baer Plaza connected to the Dome via skybridge over Broadway. The addition would have a 20,000 square-foot lobby, rooftop beer garden and a new entrance for club seats and luxury suites
  • Glass would replace metal panels at the base of the dome’s roof allowing more natural light into the Dome
  • 1,500 club seats would replace 1,800 existing seats and four suites
  • Temporary barricades would close Broadway Avenue on the east side of the stadium on game days to create a fan plaza

rams_baer plaza
baer plaza
{Baer Plaza would become the focal point of fan activity on game day}

The most interesting gambit by the CVC is the proposal to alter the existing lease agreement to state, “It is also acknowledged and agreed that the determination of whether of not this First Tier standard has been met shall not include a comparison to an item in such stadia if such item is generally provided for in the stadia by NFL franchisees at the sole cost and expense of the NFL franchisees.” What does that mean? The CVC is stating that improvements needed to meet “top tier” requirements are only 48% the responsibility of the CVC. How? In their own research, they’ve found that 52% of the cost of stadia built or substantially renovated since 2005 (the last “top tier” deadline) has been born by franchisees (the owners).

With this, the $124M proposal becomes a $59.52M expense with the rest coming from the Rams. The last significant improvements made to the Dome were paid for by restructuring debt obligations. It’s not stated from where the proposed $59.52M will come, but there are likely options (and unlikely ones). The City and County each currently pay $6M annually and the state pays $12M on bonds used to build the Dome. Those amounts are unlikely to increase unless voters can be convinced that the sunk investment deserves more support.

CVC Rams stadium proposal 2-1-12
CVC Rams stadium proposal 2-1-12
{a new central scoreboard and reply screen, as well as natural light, are part of the CVC proposal}

St. Louis currently collects roughly $1.67M per year from an “amusement tax” on ticket sales. Neither the baseball Cardinals or hockey Blues still pay the amusement tax. The most significant city contribution to the new Busch Stadium was the relinquishing of this tax. One would expect this could be an easy option. However, Mayor Francis Slay has stated that any new public money for the Dome would subject to voter approval. In addition, current naming rights for the stadium are up in 2014. It’s possible that $8M or more, per year, could be “found” in a new naming agreement.

On one hand, the proposed 48/52 split seems a significant (10s of millions of dollars) change to which the Rams would never agree. And yet, it also makes perfect sense. There is simply no way that a city, or that city’s convention/stadium entity (really the taxpayers) should be required to compete financially with billionaire owners. The CVC is saying, if Kroenke spends what other owners spend to ensure a top tier facility, we’ll do the same. Only time will tell if this is a productive tactic. The Rams have until March 1 to accept or reject the above proposal, and then until May 1 to present the CVC with a counteroffer. The “top tier” issue would go into arbitration if an agreement isn’t reached by June 15. If the CVC cannot meet the terms of the arbitration result, the Rams would be free to leave after March 1, 2015.

St. Louis Convention and Visitors Commission Stadium Renovation Proposal to the Rams Financial Plan

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  • Dan hell no we don’t want the Chargers here we still have the Raiders and Rams in our veins. Way to many Raider fans here and I am 1 of them and would not attend until the Raiders cane to town to play the chargers. TBH here I think who ever goes to LA will be  coming from Rodger Goodel’s doing along with the league. They will be the ones posturing a deal @ Farmers Field.

  • LARamsFan

    We’ll welcome them back in LA, this IS the beginning of the move…

  • Guest

    NO! I don’t want to pay for this, either! No taxation without representation.They make PLENTY of money; if the private sector doesn’t want to foot the bill, then let them walk!

    Please don’t force me to pay to subsidize a god damn sport. It’s not necessary, I don’t attend football games, and I don’t want to pay in!

    Jesus Christ! $15 Trillion in DEBT! Let’s throw millions of public dollars at football. It’s a god damn BARBARIC sport anyway…

    Once again, where are the priorities?

  • Anonymous

    do these proposed improvements to the dome make for a more attractive Convention Center? Does it help entice more conventions?

    • Alex Ihnen

      Good question, and yes, probably so, though most conventions do not use the dome itself. Maybe they would have access to the “Geek Suite”?

  • Gary Kreie

    So how would the Rams play their counteroffer?  Would an arbitrator be required to pick one offer or the other?  If not, the Rams will ask for the world.  If so, then the Rams might need to be careful.  If they ask for too much and lose arbitration, they have to stay.  If they ask for too little, the CVC might accept their offer and they have to stay.

    • Alex Ihnen

      From what I’ve read, the arbitrator does not need to be pick one offer or the other, but can decide something in the middle. It will be interesting as the Dome itself has limits. Stan can’t ask for the largest replay screen in the country or x number of additional seats, or even substantially more concession stands. I don’t know how an arbitrator would see this. The deal isn’t that the stadium has to be “top tier” while recognizing the physical limitations of the building – though that makes sense. Reading it again, I don’t think that the Rams have a huge lever regarding the top tier measurement. The specific issues are reachable, again, at least as I’m looking at it.

  • Dan

    Great article. A couple thoughts…
    1.       The 48/52 argument really makes sense, and I’m sure it’ll be the strongest consideration of an arbiter. Darn well a genius thought there. The variable, however, is that if such an argument is made, then a move-minded Stan could respond seeking an even grander  yet strictly theoretical enhancement package (i.e. a $400M gross enhancement plan) that, while still paying 52% himself, would still be too costly for STL Metro to pay 48% without a new tax event. That could be an out to LA.
    2.       Then again, should a tax issue be a problem, what if STL’s powers-that-be step up and buy in? Look at how the Blues are now owned by a cabal of local business leaders. Perhaps more monies could be garnered through a private entity seeking more branding opportunities. Perhaps…
    3.       It would have been a better visual if they had included a view of the new scoreboard with the new windows & natural light.
    4.       “Geek Suite”? Really? CVC: Don’t make the Bud Light mistake and condescend to your customers. Even if it rhymes.
    5.       San Diego’s going to LA before the Rams will. Big time, especially with the shared fan base (much more than the LA Rams fans have now), the proximities between LA and San Diego, and the related logistics for such a move. LA Chargers before LA Rams.
    6.       Jaguars, too; the NFL doesn’t want their game seen as less of a choice than the neighboring UF Gators’ games. Even with MJD. It’s embarrassing already.

  • 4thand1

    It’s like putting lipstick on a pig. Ain’t. Gonna. Work. Rams are gone.