Brown Family/Bengals Finances

[*pally*]

Unlike some teams you can not separate the Brown family and Bengals' finances. The family wealth comes from the team and the team only.

Mike Brown is generally considered the 2nd poorest (relative term) NFL owner next to Mark Davis of the Raiders who shares ownership with his mother. As an only child, when she dies, he should inherit full ownership.

Brown's net worth is estimated to be $925 million. For perspective, Rob Walton, the new Bronco's owner is worth around $60 billion.

How much of Brown's wealth is from outside sources or is liquid is unknown.

As we move into negotiations with the team's biggest stars, cash assets or the ability to access cash is paramount because of the escrow rules. It is unlikely that the Browns, despite their overall wealth, have the cash on hand to place hundreds of millions of dollars into an escrow account for multiple guaranteed contracts unlike owners like Haslam and Walton. But we really don't know that for sure.

One financial concern that must be at the forefront of the Bengals' planning, is the fact that their principal owner, Mike Brown, will be 87 in 3 weeks. They have to plan for his death, the transition of ownership, and the impact that will have on the family and team's overall finances. Granted, having dealt with the whole tax impact of his father's death has taught Mike valuable lessons which I'm sure he has already taken into consideration. It would not surprise me to find out that Mike has quietly been transferring team stock to his children Katie and Paul to lessen the impact of his death.

So, what do you all think may be the Brown Family and the team's overall financial position? Is the reluctance to pay out large guarantees due to cash restraints, their contract philosophy, the particular player, or some other reason?
Numerous teams whose principal owner has died (Bills, Titans, Broncos) have had to be sold to satisfy estate issues. What impact do you think Mike Brown's inevitable death will have on the team's finances and management.

[XenoMorph]

Good post a lot of people tend to forget these other owners especially the newer ones were super rich outside of football... Where as the Browns are a football family. (one of the last few left)

I think the browns contracts are usually very fair and practical.

I also think some owners are trying to price them out of the league with these Guaranteed #s

Succession will be a worrying time

[wcu]

Surely Mr. Brown has secured the best estate planning possible, and I'd be surprised if the NFL didn't ensure they had an iron clad succession plan in place. The management of his estate as it applies to the team is somewhat less worrisome than potential cash flow issues that could arise.

I do certainly think the Bates-non-extension could be an indicator. Not only are there salary cap consequences, but they've got to have enough operating capital in just a few years to pay out several massive, potentially guaranteed contracts and still have enough left over to run the business. Again, surely they're already making contingencies for such a situation.

[WeezyBengal]

This was being discussed in another thread.

The fact that the Bengals (Brown Family) don't have income coming from any other ventures should be concerning, especially with how contracts are going toward guaranteed money.

That being said, it's not the end all be all. The Blackburns are VERY smart people, so I have no doubt that they will figure out how to obtain the capital (if they don't already have it) to pay guaranteed money to those that they think deserve it - whether that's through loans, investors, or other revenue streams.

One of the biggest red flags should be them renaming the stadium. They wouldn't DARE to rename the stadium unless they REALLY needed the capital. Like really, really needed it.

Another part of this is how much Joe Burrow actually cares to have guaranteed money. I know that sounds crazy, but if they Bengals give him 5 million more over the life of his contract than the highest paid player in the NFL but don't guarantee it - would he accept it (especially if you knew it was essentially guaranteed)? I really think the Bengals could get contractually creative to help the situation and this is the Blackburns specialty.


PS - I think the Bates situation is a unique one. I honestly am not sure that was entirely based on guaranteed money but rather the guaranteed money + how they evaluated his played over the past year. Yeah is a very complicated case.

[J24]

If they can't afford it then sell the team; I'm tired of making excuses for the Brown and the Blackburns when it comes to money.

[RiverRat13]

While they might not have the cash on hand to put guaranteed money into escrow, they can easily get loans to do so. The field naming rights would probably come close to covering the interest.

I doubt even the richest owners are plopping their own cash into escrow. They are most likely getting loans as they would pay a lower interest rate from a loan than what that money would make in the market. Rob Walter may be worth $60 billion, but he doesn't have $60 billion sitting in the bank.

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[WeezyBengal]

(07-22-2022, 03:19 PM)RiverRat13 Wrote: While they might not have the cash on hand to put guaranteed money into escrow, they can easily get loans to do so. The field naming rights would probably come close to covering the interest.

I doubt even the richest owners are plopping their own cash into escrow. They are most likely getting loans as they would pay a lower interest rate from a loan than what that money would make in the market. Rob Walter may be worth $60 billion, but he doesn't have $60 billion sitting in the bank.

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The Bengals only get the first 16.5 million of naming rights to the stadium. The rest goes to the county. 

[SunsetBengal]

(07-22-2022, 01:09 PM)pally Wrote: Unlike some teams you can not separate the Brown family and Bengals' finances.  The family wealth comes from the team and the team only.  

Mike Brown is generally considered the 2nd poorest (relative term) NFL owner next to Mark Davis of the Raiders who shares ownership with his mother. As an only child, when she dies, he should inherit full ownership.

Brown's net worth is estimated to be $925 million. For perspective, Rob Walton, the new Bronco's owner is worth around $60 billion.

How much of Brown's wealth is from outside sources or is liquid is unknown.

As we move into negotiations with the team's biggest stars, cash assets or the ability to access cash is paramount because of the escrow rules.  It is unlikely that the Browns, despite their overall wealth, have the cash on hand to place hundreds of millions of dollars into an escrow account for multiple guaranteed contracts unlike owners like Haslam and Walton. But we really don't know that for sure.

One financial concern that must be at the forefront of the Bengals' planning, is the fact that their principal owner, Mike Brown, will be 87 in 3 weeks.  They have to plan for his death, the transition of ownership, and the impact that will have on the family and team's overall finances.  Granted, having dealt with the whole tax impact of his father's death has taught Mike valuable lessons which I'm sure he has already taken into consideration.  It would not surprise me to find out that Mike has quietly been transferring team stock to his children Katie and Paul to lessen the impact of his death.

So, what do you all think may be the Brown Family and the team's overall financial position?  Is the reluctance to pay out large guarantees due to cash restraints, their contract philosophy, the particular player, or some other reason?
Numerous teams whose principal owner has died (Bills, Titans, Broncos) have had to be sold to satisfy estate issues. What impact do you think Mike Brown's inevitable death will have on the team's finances and management.

Mike Brown may have a net worth of $925M, but the Bengals team is worth more than double that amount.

Quote:Mike Brown net worth

ESPN reported that Brown, based on Forbes data from 2015, has a net worth of $925 million. It has been several years since the report so there could be some variance, however. That number, adjusted for inflation, would be about $1.09 billion.
According to a 2021 Forbes report, the Bengals, as a franchise, are valued at $2.275 billion, which is actually the second-lowest valuation of any NFL team. Back in 2015, they were valued at just $990 million. Needless to say, Brown's net worth has likely climbed in the years since that last valuation.
By comparison, Rams' owner Stan Kroenke, the owner of Kroenke Sports and Entertainment, has a net worth of $10.7 billion, per Forbes.

[RiverRat13]

(07-22-2022, 03:21 PM)WeezyBengal Wrote: The Bengals only get the first 16.5 million of naming rights to the stadium. The rest goes to the county. 

This says the first $60.5 million goes to the Bengals and then a 70-30 split in the Bengals' favor:

https://www.sportsbusinessjournal.com/Daily/Issues/2022/07/21/Facilities/Bengals-stadium-naming-rights.aspx#:~:text=Bears%20'%20Soldier%20Field-,.,%25%20of%20the%20remaining%20revenue.%22

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[QueenCity]

(07-22-2022, 03:21 PM)WeezyBengal Wrote: The Bengals only get the first 16.5 million of naming rights to the stadium. The rest goes to the county. 

The team's lease with the county “outlines a complicated profit-sharing formula that gives the county less money from a naming rights deal as time goes on.” Under the lease, the Bengals would "get the first $60.5 million and then 70% of the remaining revenue."

[WeezyBengal]

I saw the new NFL TV deal is going to get teams an estimated 300 million per year per team...so all the talks about not having any money to guarantee should be put to bed...

[*pally*]

(07-22-2022, 03:30 PM)WeezyBengal Wrote: I saw the new NFL TV deal is going to get teams an estimated 300 million per year per team...so all the talks about not having any money to guarantee should be put to bed...

There is a 40% tax on estates worth more than a billion dollars.  The Bengals, of which Mike Brown reportedly owns 97%, are worth at least 3 billion dollars, if not more.  

[Essex Johnson]

(07-22-2022, 01:09 PM)pally Wrote: Unlike some teams you can not separate the Brown family and Bengals' finances.  The family wealth comes from the team and the team only.  

Mike Brown is generally considered the 2nd poorest (relative term) NFL owner next to Mark Davis of the Raiders who shares ownership with his mother. As an only child, when she dies, he should inherit full ownership.

Brown's net worth is estimated to be $925 million. For perspective, Rob Walton, the new Bronco's owner is worth around $60 billion.

How much of Brown's wealth is from outside sources or is liquid is unknown.

As we move into negotiations with the team's biggest stars, cash assets or the ability to access cash is paramount because of the escrow rules.  It is unlikely that the Browns, despite their overall wealth, have the cash on hand to place hundreds of millions of dollars into an escrow account for multiple guaranteed contracts unlike owners like Haslam and Walton. But we really don't know that for sure.

One financial concern that must be at the forefront of the Bengals' planning, is the fact that their principal owner, Mike Brown, will be 87 in 3 weeks.  They have to plan for his death, the transition of ownership, and the impact that will have on the family and team's overall finances.  Granted, having dealt with the whole tax impact of his father's death has taught Mike valuable lessons which I'm sure he has already taken into consideration.  It would not surprise me to find out that Mike has quietly been transferring team stock to his children Katie and Paul to lessen the impact of his death.

So, what do you all think may be the Brown Family and the team's overall financial position?  Is the reluctance to pay out large guarantees due to cash restraints, their contract philosophy, the particular player, or some other reason?
Numerous teams whose principal owner has died (Bills, Titans, Broncos) have had to be sold to satisfy estate issues. What impact do you think Mike Brown's inevitable death will have on the team's finances and management.

I think the issue you are missing is not their finances and future afyer mike, it is the $$$$ that will be offered by the mega rich to relocate...if im Mike i might want to sell to set my family up for a big payday

[*pally*]

(07-22-2022, 03:55 PM)Essex Johnson Wrote: I think the issue you are missing is not their finances and future afyer mike, it is the $$$$ that will be offered by the mega rich to relocate...if im Mike i might want to sell to set my family up for a big payday

It is all part and parcel concerning the team's future.

[fredtoast]

(07-22-2022, 03:19 PM)RiverRat13 Wrote: While they might not have the cash on hand to put guaranteed money into escrow, they can easily get loans to do so. The field naming rights would probably come close to covering the interest.

I doubt even the richest owners are plopping their own cash into escrow. They are most likely getting loans as they would pay a lower interest rate from a loan than what that money would make in the market. Rob Walter may be worth $60 billion, but he doesn't have $60 billion sitting in the bank.

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Money in an escrow account can still earn interest income as long as the principle is guaranteed.

[Essex Johnson]

(07-22-2022, 04:06 PM)pally Wrote: It is all part and parcel concerning the team's future.

Not following your point, elaborate

[WeezyBengal]

(07-22-2022, 03:52 PM)pally Wrote: There is a 40% tax on estates worth more than a billion dollars.  The Bengals, of which Mike Brown reportedly owns 97%, are worth at least 3 billion dollars, if not more.  

Im not following - what does that have to do with what I said? 

[Soonerpeace]

I’m not a long time Bengal fan or local. But it appears to me that Mike’s daughter, SIL, and granddaughter are all firmly entrenched in the team. What they’ve done recently should make most feel better about decisions moving forward. They are emotionally invested and that’s a good thing.

[RiverRat13]

(07-22-2022, 04:33 PM)fredtoast Wrote: Money in an escrow account can still earn interest income as long as the principle is guaranteed.

I think I read the Browns put around $170 million into escrow to cover Watson's $230 million guaranteed.

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[CarolinaBengalFanGuy]

I'm assuming a lot of the other owners are rich due to being in other businesses?

Could we reasonably expect the Browns wealth to increase along with the potential national interest in the Bengals as a Super Bowl contender and young stars as well?