02-17-2025, 03:11 PM
(02-17-2025, 01:47 PM)Fullrock Wrote: 1. If the Brown family is cash strapped they must be REALLY poor money management people.
2. When you are worth $4B and have an asset worth as much as a NFL franchise, even if you are somehow cash-strapped, you can borrow whatever you want. Corporations take on debt all the time. If they’re serious about competing for Super Bowls, you get it done.
This seems right, but there are a couple of things that mitigate this somewhat. I agree that this rep for being great business people is overrated. Sure they are worth $4 billion, but you'd pretty much have to be if your patriarch was Paul Brown. He was the football genius and a decent businessman. Mike Brown is a great lawyer. That is different.
First, while the Brown family has owned the team for 57 years, the current group has only owned it since the early 90s after a messy inheritance transfer where Mike Brown's legal education paid off in allowing them to somehow limit the huge amount of cash the family owed the IRS; this is what allowed them to keep the team in the family (its a pretty famous tax case). While they were able to keep the team, they bought out a couple of limited partners and still had to pay the IRS something. I think this is a big source of the unfathomable cheapness and failure of the 90s. They really were cash strapped in that era. They have had plenty of time to recover and I'm sure they have. I don't know what the tax implications are when Mike passes, but the family MAY be hoarding cash for that eventuality (the cap gain may be in the BILLIONS depending on how everything is structured).
Second, the league has pretty strict rules about debt loads to prevent exactly what many advocate they do: blow past the salary cap with debt backed by the franchise. So, they may not able to borrow as much as they'd like. However, given everything else they do, I'd assume they are no where near those limits.
Third, it doesn't really matter if 1 and 2 are trueish, they definitely have access to what appears to be very large amounts of cash. However, they really don't have nearly as many sources of outside cash as other teams. Therefore, even if they wanted to compete just like everyone else (debatable, at best) they ARE at a disadvantage relative to what other ownerships seem able to do. If everyone else can afford $500 million cash per year and they can only do $400, that is a lot money they can't/won't spend on scouts and players.
My belief has always been that if you think of the Brown family aside from founder Paul as lawyers, rather than businessmen, everything makes sense. Very risk averse, careful to a fault. They enjoy winning contract negotiations more than nearly anything else. And that seems to be what they are best at (see the IRS, Hamilton county, many many players, etc).
