Bulls & Bears: NFL wins, St. Louis loses in Rams relocation

 

Tom Mayenknecht hosts The Sport Market on TSN 1040 and TSN Radio, where he regularly rates and debates the Bulls Bears of sports business. He reviews the major winners and losers of the past week every Saturday.

 
 
 
 
Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.
 

Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.

Photograph by: Vancouver Sun graphics, .

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BULLS OF THE WEEK

When you consider the combined enterprise value of the 32 franchises in the National Football League is well north of $64 billion US, it’s not breaking news that the pigskin fraternity is in a league of its own when it comes to many sport business indicators. The $10-billion industry that is the NFL has no peers in North American pro sport.

Yet it found a way to get even bigger this week when it approved the relocation of the St. Louis Rams to Los Angeles for next season. The move fills the black hole that the second-largest media market in the U.S. has been for the NFL since the Rams and Raiders left Tinseltown following the 1994 season. It provides an economic boost that will be many times the $1.8-billion US price tag on the stadium project owner Stan Kroenke has mapped out for Inglewood south of downtown Los Angeles. Kroenke will also pay his NFL brethren a spectacular $550 million US in relocation fees. Outside of football fans in Los Angeles, the biggest winner in all of this is the 66-year-old Kroenke, already the 253rd-richest person on the planet, with a personal net worth of $5.6 billion according to Forbes magazine. That will only rise as his Rams will quickly balloon from $1.45 billion in franchise value in St. Louis to somewhere north of $3 billion, doubling the equity he holds in the NFL club overnight. Revenues for the Rams should also spike from the $290 million per annum estimated at Forbes.com to north of $500 million per year, especially after the team moves into its new 80,000-seat stadium with a translucent retractable roof.

It also gives Kroenke bragging rights with respect to the sports real estate he and his family hold as owners of the NHL’s Colorado Avalanche, NBA’s Denver Nuggets, Colorado Rapids of MLS and Colorado Mammoth of the NLL, not to mention controlling interest in Arsenal FC of the Barclays English Premier League.

BEARS OF THE WEEK

Most transactions in the business of sport — as in the business of business for that matter — have winners and losers. Yet it’s rarely as clear as it is in the case of the relocation of the Rams to L.A. The biggest losers in the business of sport this week are football fans in St. Louis. You have to feel for them — emotionally and financially — especially given the $290 million US invested two decades ago by Missouri and St. Louis taxpayers to lure the Rams to the now vacant Edward Jones Dome.

The NFL wins because it’s back in L.A., but it loses again on how it’s done business on this front. You never had the impression there was a sophisticated process and guidelines around how the NFL would handle the three-way traffic jam into L.A. The lack of any real due diligence or creative efforts to find a win-win solution was painfully obvious when commissioner Roger Goodell waited until last week to file a report declaring the stadiums in St. Louis, San Diego and Oakland sub-standard; a brilliant deduction at least five years too late.

Listen to The Sport Market on TSN 1040 AM Saturdays,7 a.m. to 11 a.m.

Bulls & Bears airs at 9 a.m., followed by Weekend Extra with Sun Sports at 9:30 a.m. Follow Tom Mayenknecht at:Twitter.com/thesportmarket

Follow Tom Mayenknecht at: Twitter.com/thesportmarket

 
 
 
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Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.
 

Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.

Photograph by: Vancouver Sun graphics, .

 
 
 
 
 
 
 
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