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Mike Brown should run AIG

April 24 2009 at 6:55 PM
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BA  (Login bengalavenger)
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Millions in "GM bonuses" for the clown:

http://news.cincinnati.com/article/20090424/SPT02/304250001

"I think I will try to stick to conversations that don't involve politics." - murf, April 17 2009

 
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psychostats
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Re: Mike Brown should run AIG

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April 24 2009, 11:42 PM 

I like the other article even more. A dispute over the will of a Bengals team founder (Dutch Knowlton) sucked Mike Brown into court. He was called as a witness by Knowlton's children, who received nothing in the will. And we consequently hear more dirty laundry about the team:

Court case reveals Bengals' millions
http://news.cincinnati.com/article/20090424/SPT02/304240022/1066

Testimony revealed the contentious, often-bitter relationship between Brown and Knowlton, who feuded for years over many issues, including what Knowlton believed were exorbitant salaries paid by the team to the Brown family members in the front office.

An issue in the lawsuit was a 1994 deal between Knowlton and Brown. Knowlton supposedly wanted cash to live on even though he was multimillionaire and Mike Brown wanted majority ownership of the team.

The agreement resulted in Knowlton selling 60 of his then-236 shares of the Bengals to the Brown family for $6 million $100,000 per share a price Knowltons children considered outrageously low. In exchange, the Brown family gained ownership of two-thirds of the teams 586 shares and Brown agreed the team would pay shareholders the vast majority of team revenues.

The result was that Knowlton got $6 million for those shares and Brown agreed to pay shareholders $80 million, more than half of which $48 million went to the Brown family.

---
This reminds me of the machinations that came out in another court case, when the Brown Family successfully challenged the IRS over PB's estate tax. From an old 1999 article:

Shareholders' take of profits drained Bengals
http://bengals.enquirer.com/1999/12/26/ben_shareholders_take_of.html

It was in May 1983 that Paul Brown, then 75, entered into an agreement that would help his partners in the short term and later give his family the opportunity to own the team. Here's what they agreed to:

- The Bengals reorganized as an S corporation, meaning the income of the team became the income of the individual shareholders. As a result of the agreement, the Bengals were required to pay dividends to the extent of the team's income, the family told tax court.

- Paul Brown sold 117 of his 118 Bengals shares to Mr. Sawyer for $30,000 each, or $3.5 million. Combined with his own shares, this gave Mr. Sawyer 330 of the Bengals' 586 shares, or 56 percent. Though that was a majority, Paul Brown retained control over the team's operations.

- As part of the deal, Mr. Sawyer agreed that Paul Brown's sons, Mike and Pete, could buy 329 of his shares and controlling interest in the team for $25,000 per share, during a three-year period beginning March 1, 1993. Mr. Sawyer sold this option to the brothers, Pete and Mike, for $1.

---
Put the two stories together, and what do you get? The saga of a family who couldn't afford to own an NFL team. But they did come to own it eventually while becoming very wealthy. It took time, patience, very compliant investors, and embarrassingly skinflint team operations. And so the fans were given a perpetually shoddy product, leading ultimately to the grand booby prize -- the worst ownership in football!

The Brown Family could have made plenty of money over the years if they had not angled for full control. They wouldn't have had to go through the desperately lean times with the shoestring budgets. They could have been part-owners who took their profits while making honest efforts at winning. But, no, they had to have full ownership of the team. So they made their clever deals and served-up crappy football. They made out in the long run while we still get screwed today.

-psychostats

 
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BMN
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Re: Mike Brown should run AIG

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April 25 2009, 2:58 PM 

Seriously, I'm pi$$ed beyond belief this news is coming out on draft weekend.

This isn't going to get the attention it warrants.

If you renew your season tickets after finding out about this, you deserve every bit of losing you see.

BONUSES implies "money above and beyond the standard services," which implies "rewarding your magnificent accomplishments."

Disregard Brown as an owner, This is about the bonuses strictly related to being a GM.

WHAT, as a GM, as Mike Brown done to even REMOTELY deserve a bonus?

I'm out of words now.

BMN

 
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Airjawa
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re

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April 25 2009, 3:03 PM 

Unbelievable. This topic is the reason this website exists, it really should be the central topic of conversation here! Funny that it's only got 3 or 4 replies.

 
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Katie
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Re: re

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April 25 2009, 3:20 PM 

Mike Brown received millions in general manager bonuses, even though the team has no such title.

VonderBrink testified the team paid a general manager bonus of $1,237,000 in 1999 and $1,947,695 in 2001. Brown testified in the trial he received a bonus every year since he took over running the team in 1991.

The $48 million paid to the Brown family came as the team also paid five Brown family members annual average salaries of more than $700,000, court documents note. The family members in addition to Mike Brown are: Browns brother, Pete Brown; Browns son, Paul Brown; Browns daughter, Katie Blackburn; and her husband, Troy Blackburn.

Those five family members, VonderBrink testified, were paid combined salaries of $3,926,000 in 1999 an average salary of $785,200 and $3,613,000 in 2001, an average salary of $722,600.

Because VonderBrink testified about specific years, pay amounts werent provided during the trial for the Brown family members for all years.

---------------------------------------------------------------------------------------------------------------

Mike Brown took over managing the Bengals in 1991. In those 18 seasons, the team has won 35 percent of its games:

1991 3-13

1992 5-11

1993 3-13

1994 3-13

1995 7-9

1996 8-8

1997 7-9

1998 3-13

1999 4-12

2000 4-12

2001 6-10

2002 2-14

2003 8-8

2004 8-8

2005 11-5

2006 8-8

2007 7-9

2008 4-11-1

Total: 101-186-1

Source: Bengals.com

-----------------------------------------------------------------------------------------------------------------------------------------

In addition to more than $300 million for the stadium, the contract the team and Hamilton County officials signed to keep the team in Cincinnati required taxpayers also to pay for the maintenance at Paul Brown Stadium. That includes work done on the building, utilities, taxes and insurance. That amounted to $96.3 million since the stadium opened in 2000:

. $10,769,316.70 in 2009*

. $7,904,681.07 in 2008

. $8,475,074.17 in 2007

. $10,645,886.80 in 2006

. $13,034,997.02 in 2005

. $12,743,521.14 in 2004

. $13,470,581.33 in 2003

. $12,892,076.31 in 2002

. $6,339,573 in 2001

*projected

Source: Hamilton County

 

Sooooo, a 35% win record, and the guy is giving himself bonuses?!!  The bonus in 2001 was over $1,947,645,  so I can only imagine he is giving himself over $2 million at this point.    I guess he gives himself a bonus because in his mind, he is a great owner!  His goal is raking in profits, and that's what he's doing!  Winning is a low priority on his list.  The truth is, a great owner can rake in profits AND win. 


 
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shapu
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Re: re

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April 25 2009, 10:22 PM 

Since the team has no general manager, wouldn't receiving a general manager bonus constitute some degree of misappropriation? I recognize that Brown is the team owner and is in some degree entitled to receive whatever he wants from the team (as long as it's not patently illegal), but couching it in those terms is just maddening.

 
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psychostats
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Not exactly "honest to a fault".

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April 25 2009, 11:50 PM 

"I guess he gives himself a bonus because in his mind, he is a great owner!"

He might also believe that he's due the money for all the lean times the family endured. Based on his lifestyle, Mike Brown apparently isn't interested in accumulating the trappings of wealth. But obviously he's interested in accumulating money, whether it's for trust funds for his great-great-great-great grandchildren or whatever.

I used to think Brown's problem was purely a misguided do-it-the-right-way mentality. (With the "right way" being arbitrary, yet set in stone.) Eventually I came around to noting his disingenuous side. If you ever read his father's self-serving autobiography, you'll know where the tendency comes from.

A couple of Who Dey Revolution commenters neatly summarize a few points:

"... The Brown family paid themselves millions of dollars in salaries and millions more in bonuses every single year, to Knowlton's fury. They were then able to pocket this money and call it a company expense, and adjust stock income appropriately. Of course, the Brown family would also receive this income per-stock, essentially earning two salaries. The more they paid themselves in salary and bonuses, the less they would have to value the stock, and thus they would keep more of the money for themselves, and pay less to Knowlton. ..." --Mockenrue

"... But I do know that the amount of money the Brown's made while claiming poverty in order to extort voters to pass the sales tax is unethical. ..." --Leeroy Jenkins

http://www.whodeyrevolution.com/whodeyrevolution/2009/04/mike-brown-even-worse-than-we-thought.html#comments

The issue isn't that the Brown Family pays themsleves tons of money. It's the way they simultaneously short-change fans and shareholders. And all the while feigning a sort-of austere nobility.

-psychostats

 
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BMN
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Re: Not exactly "honest to a fault".

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April 26 2009, 10:31 AM 

shapu and psychostats, both well put.

Misappropriation. Period.

BMN

 
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BMN
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Re: Not exactly "honest to a fault".

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April 27 2009, 6:44 AM 

URRRRRGGGHGHHHHHHH! Beyond aggravating this happened on draft weekend, getting zero attention. The sheople will read "great draft" and think all is well.

Sunrise, sunset for this franchise, I suppose.

BMN

 
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psychostats
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Re: Mike Brown should run AIG

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December 4 2017, 9:52 PM 

Bump.

It never hurts to revisit some of these old threads. This week I'll find something on Paul Brown.

    _______________________________________
    Bell-cow quarterbacks are like queen bees. Only one can take you to the land of milk and honey.
      ~ What Mike Brown should have said, versus what he did say.
 

 
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