11-03-2019, 10:53 AM
A 2009 article that has other details:
Court case reveals Bengals' millions
By Kimball Perry • kperry@enquirer.com • April 24, 2009
In a case that provides a rare glimpse into the closely held finances of the Cincinnati Bengals, the Ohio Supreme Court this month validated a stock deal that gave Mike Brown’s family unquestioned control of the NFL team.
The court upheld a 2007 ruling in a contentious Hamilton County lawsuit.
Through the years, Bengals’ finances have been so closely held that even informed guesses of the team’s value made by experts in the lawsuit varied widely – from $141 million to $1.18 billion.
The Enquirer analyzed transcripts of that trial that give tantalizing glimpses of the finances of the team and the Brown family.
Among details of the team’s finances that emerged from the case is that from 1994 to 2000 – as Brown campaigned for and got a new publicly funded stadium to remain solvent and stay in Cincinnati – the team paid Brown and his family in excess of $50 million.
That amount includes money the team paid to the Brown family as the team’s majority shareholders, as well as millions annually for their salaries and bonuses as team employees.
The numbers came from expert testimony given during the hard-fought 2007 Hamilton County Probate Court trial over the $300 million estate of Austin “Dutch” Knowlton, a Bengal founder who also was an owner of the Cincinnati Reds.
Knowlton died in 2003 at age 93, but left a will that excluded his adult children.
The children sued, saying they were improperly cut out of their father’s will, and blamed Knowlton’s lawyer – prominent Cincinnati attorney and Bengals shareholder Charles Lindberg.
They accused Lindberg of violating his duty as Knowlton’s lawyer and his interest as a trustee of Knowlton’s $300 million charitable trust because while he served as Knowlton’s personal lawyer, Lindberg was the managing partner of the Cincinnati law firm of Taft Stettinius & Hollister that also represented the Bengals and the Brown family in legal issues – including the stock deal in question.
The case went to trial in 2007, and Lindberg and Brown testified. A jury found the stock deal valid, a ruling upheld in an opinion authored by Judge Patrick Dinkelacker of the Ohio 1st District Court of Appeals. That was appealed to the Ohio Supreme Court, which declined April 8 to hear the case, effectively ending it.
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.
The centerpiece of the lawsuit was a 1994 secret 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 Knowlton’s children considered outrageously low. In exchange, the Brown family gained ownership of two-thirds of the team’s 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.
Trial evidence shows Mike Brown got unquestioned control of the team and the right to determine how much the team would pay his family members employed there.
The Bengals declined to comment for this story, and also declined to confirm the validity of the finances testified to during that 2007 trial. The Enquirer presented the finances used in this story to the Bengals and asked if the numbers were accurate, but the team declined comment.
“The information requested by The Enquirer from the Bengals is proprietary and will not be made public by the Club,” Bengals spokesman Jack Brennan wrote in an e-mail to The Enquirer.
At about the same time Brown and Knowlton made the deal between themselves, Brown was leading a campaign – ultimately successful – to have Hamilton County voters approve a sales tax increase that would pay for a new football stadium, named for Brown’s father, Hall-of-Fame coach Paul Brown.
That sales tax hike convinced Brown to keep the team in Cincinnati – with lease terms that critics say are far too favorable for the team. Hamilton County went to court in 2003 to amend lease terms, claiming the lease was “grossly one-sided in the Bengals’ favor.” That claim was eventually disallowed by the courts.
Part of the team’s lease with the county is for stadium maintenance. Hamilton County records show that since Paul Brown Stadium opened in 2000, the public has paid $96.3 million for stadium maintenance, including a projected $10.7 million bill this year.
Shareholder finances were just some of the team’s finances it and the Brown family fiercely guard.
Edward VonderBrink, an accountant hired to review the team’s audited financial reports as part of the trial, had to sign a confidentiality agreement to reveal none of that financial information except in court.
During his trial testimony, Brown often refused to answer questions about team finances and his lawyers fought to prevent him from answering finance questions.
Others findings include:
• 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: Brown’s brother, Pete Brown; Brown’s son, Paul Brown; Brown’s 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.
Court case reveals Bengals' millions
By Kimball Perry • kperry@enquirer.com • April 24, 2009
In a case that provides a rare glimpse into the closely held finances of the Cincinnati Bengals, the Ohio Supreme Court this month validated a stock deal that gave Mike Brown’s family unquestioned control of the NFL team.
The court upheld a 2007 ruling in a contentious Hamilton County lawsuit.
Through the years, Bengals’ finances have been so closely held that even informed guesses of the team’s value made by experts in the lawsuit varied widely – from $141 million to $1.18 billion.
The Enquirer analyzed transcripts of that trial that give tantalizing glimpses of the finances of the team and the Brown family.
Among details of the team’s finances that emerged from the case is that from 1994 to 2000 – as Brown campaigned for and got a new publicly funded stadium to remain solvent and stay in Cincinnati – the team paid Brown and his family in excess of $50 million.
That amount includes money the team paid to the Brown family as the team’s majority shareholders, as well as millions annually for their salaries and bonuses as team employees.
The numbers came from expert testimony given during the hard-fought 2007 Hamilton County Probate Court trial over the $300 million estate of Austin “Dutch” Knowlton, a Bengal founder who also was an owner of the Cincinnati Reds.
Knowlton died in 2003 at age 93, but left a will that excluded his adult children.
The children sued, saying they were improperly cut out of their father’s will, and blamed Knowlton’s lawyer – prominent Cincinnati attorney and Bengals shareholder Charles Lindberg.
They accused Lindberg of violating his duty as Knowlton’s lawyer and his interest as a trustee of Knowlton’s $300 million charitable trust because while he served as Knowlton’s personal lawyer, Lindberg was the managing partner of the Cincinnati law firm of Taft Stettinius & Hollister that also represented the Bengals and the Brown family in legal issues – including the stock deal in question.
The case went to trial in 2007, and Lindberg and Brown testified. A jury found the stock deal valid, a ruling upheld in an opinion authored by Judge Patrick Dinkelacker of the Ohio 1st District Court of Appeals. That was appealed to the Ohio Supreme Court, which declined April 8 to hear the case, effectively ending it.
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.
The centerpiece of the lawsuit was a 1994 secret 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 Knowlton’s children considered outrageously low. In exchange, the Brown family gained ownership of two-thirds of the team’s 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.
Trial evidence shows Mike Brown got unquestioned control of the team and the right to determine how much the team would pay his family members employed there.
The Bengals declined to comment for this story, and also declined to confirm the validity of the finances testified to during that 2007 trial. The Enquirer presented the finances used in this story to the Bengals and asked if the numbers were accurate, but the team declined comment.
“The information requested by The Enquirer from the Bengals is proprietary and will not be made public by the Club,” Bengals spokesman Jack Brennan wrote in an e-mail to The Enquirer.
At about the same time Brown and Knowlton made the deal between themselves, Brown was leading a campaign – ultimately successful – to have Hamilton County voters approve a sales tax increase that would pay for a new football stadium, named for Brown’s father, Hall-of-Fame coach Paul Brown.
That sales tax hike convinced Brown to keep the team in Cincinnati – with lease terms that critics say are far too favorable for the team. Hamilton County went to court in 2003 to amend lease terms, claiming the lease was “grossly one-sided in the Bengals’ favor.” That claim was eventually disallowed by the courts.
Part of the team’s lease with the county is for stadium maintenance. Hamilton County records show that since Paul Brown Stadium opened in 2000, the public has paid $96.3 million for stadium maintenance, including a projected $10.7 million bill this year.
Shareholder finances were just some of the team’s finances it and the Brown family fiercely guard.
Edward VonderBrink, an accountant hired to review the team’s audited financial reports as part of the trial, had to sign a confidentiality agreement to reveal none of that financial information except in court.
During his trial testimony, Brown often refused to answer questions about team finances and his lawyers fought to prevent him from answering finance questions.
Others findings include:
• 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: Brown’s brother, Pete Brown; Brown’s son, Paul Brown; Brown’s 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.
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