Agreements signed by Raiders, Rams and Chargers in 2016 mean those teams are on the hook for all legal fees and possible damages.
The lawsuits against the Oakland Raiders and Los Angeles Rams could prove even more costly for those teams than most people think.
So costly that one source with extensive knowledge of the Raiders called it “distressing.”
The Raiders and Rams are on the hook for all legal fees and potential damages incurred by the teams individually as well as the legal fees and potential damages suffered by all other NFL teams and the league office. Two league sources indicated that the Raiders, Rams and Chargers all signed agreements in 2016 promising to pay in the case of lawsuits over their respective relocations.
The Raiders, who plan to move to Las Vegas in 2020, and Rams, who returned to Los Angeles in 2016, are currently being sued by Oakland and St. Louis, respectively. The suit by the City of Oakland includes all 32 NFL teams and the league as defendants as well.
As a result, the Raiders may be in a far more precarious situation related to the anti-trust lawsuit. As for the Rams, multiple sources said that owner Stan Kroenke has been angered by the high expense related to ongoing litigation in St. Louis.
For the Raiders, the agreement makes owner Mark Davis and the team responsible for potentially millions of dollars in fees alone. Worse, if the Raiders were to lose the anti-trust suit, the damages could be heavy. Under federal law, damages in anti-trust lawsuits are trebled, meaning that whatever is awarded by the court is tripled.
For instance, if the City of Oakland were awarded $50 million in damages based on the actions of the Raiders and league as a whole, the actual award would be $150 million. If the damages are $200 million, the actual award would be $600 million.
And the Raiders would have to pay all of it, along with legal fees for the other owners and the league. The NFL has already retained long-time outside counsel Gregg Levy of Burlington & Coving to represent it against the City of Oakland.
As another source put it, “The league hires the most expensive lawyers around.”
An NFL spokesman did not respond to two messages from FanSided.com regarding the agreements.
The goal for those involved in the Oakland lawsuit is to get damages large enough that Davis might be forced to give up the team’s brand and colors as part of a settlement. Whether that ever happens is a long way from being determined and is considered farfetched by some. Oakland is being represented by attorney Jim Quinn of Berg & Androphy. Quinn has a lengthy history of successful legal action against the NFL and NBA. His firm is funding the case in exchange for a contingency fee if the suit is successful.
As for the Rams, one source said Kroenke has become extremely frustrated by the situation because he feels he was coerced into the agreement. Kroenke has toyed with the idea of suing the league over the matter, but any such lawsuit is unlikely to be successful without a protracted fight.
According to the sources, the Raiders, Rams and Chargers all signed agreements with the NFL on Jan. 12, 2016 to indemnify the league and all individual teams against legal action. The one-page agreements were done on the morning of the day that NFL owners voted on possible relocation of teams to Los Angeles.
“The league basically said each team had to sign this or they would not be considered for relocation,” a source said.
The NFL was weighing two proposals for relocation submitted by the three teams (the Raiders and Chargers partnered on one proposal for a stadium in Carson). Ultimately, the owners voted to allow the Rams to relocate to the Los Angeles suburb of Inglewood and gave the Chargers the first option to join the Rams there.
The Raiders were given the second option to join the Rams and were also allowed to relocate elsewhere. The team eventually struck a deal with Las Vegas to move there. The team is hopeful to open a new stadium for the 2020 season there. In the meantime, the Raiders are weighing where to play the 2019 season in the aftermath of the Oakland lawsuit.
Two sources said individuals in San Diego have reached out to Quinn about possible action. The problem is that the City of San Diego agreed not to file any lawsuit against the Chargers in its final lease with the team. While another group in San Diego could file, the court may determine that the group does not have standing.