Mike Brown’s business savvy

As mentioned earlier, I’ve got a story on Hamilton County’s beleaguered stadium fund coming soon in Cincinnati Magazine. The story runs to 4,000 words, but there were still lots of traumatic Mike Brown stories we couldn’t fit in.

Sometimes these stories seemed too tangential. (Remember when an aging Barry Larkin asked for grass in Riverfront Stadium? Brown [allegedly] blocked it because of the decades-long feud between the Bengals and the Reds — even though Larkin wanted off the knee-grinding astroturf so badly he was ready to pay for the switch himself.) Sometimes the stories were too detailed. (It would take plenty of space to explain how, since they’ve moved into Paul Brown Stadium, the Bengals have managed to sue their own fans — twice.) Sometimes the stories felt too thinly sourced. (Last year, Cincinnati CityBeat reported the recollections of a former township trustee who said Stuart Dornette and Bob Bedinghaus — two key members of the Bengals’ braintrust — came to him in 1995 with a quid-pro-quo election offer so long as he agreed to provide “a second vote on the County Commission for the stadium sales tax proposal.”)

Like I said, lots of stories. But there is one other episode, alluded to in my story, that I’d like to summarize here since it highlights one of the most frustrating aspects of the Mike Brown era. The Cincinnati media loves to praise Brown’s “business savvy.” They’re wrong to do this — Brown’s stubborn belief in Family First, and in his own football acumen, has cost him millions in profits and a whole lot of capital appreciation. But Brown does seem to be a near-brilliant litigator. And that’s what’s so frustrating — he becomes quite creative in legal matters, even as he refuses to spend on players or to delegate football decision-making.

One thing my story tries to do is show just how much money Brown made in the mid-1990s (and, by extension, how much he continues to make today). It’s not just the Bengals’ year-to-year profits, though those consistently rank near the top of the NFL. It’s the millions in salaries and bonuses collected by Brown and his family — and, more than that, the appreciation in the Bengals’ value, which is how modern sports owners make their real money.

This last point isn’t news to Brown. In fact, one reason he ran the Bengals so cheaply the 1990s — players flying in coach, whirlpools that didn’t work, and so on — is because he was funneling every spare dollar toward his attempt to buy out the team’s other major shareholders. In this, Brown succeeded. “From 1984 to 1993,” the Enquirer noted in 1999, “the Bengals paid out every penny of profit — $66 million — to shareholders.”

Why could the Enquirer note those numbers? Well, the Bengals ended up in tax court because of their deal, and even more numbers came out when the shareholders’ heirs decided to sue. You can see why they were angry: the Bengals’s valuation has skyrocketed from $8 million, when Paul Brown co-founded them in 1968, to $875 million today — and most of that growth came after Brown bought up all those shares. Again, he can be near-brilliant when the business matters line up with his worldview. But Brown also feels zero guilt when it comes to diverting money from the team’s best interests to his own. In 1989, the Bengals went to the Super Bow. Over the next decade — a time when Brown was maximizing profits in order to buy up stock — the Bengals ranked last in the NFL in wins and next-to-last in payroll.

In short, Mike Brown ran his team into the ground in order to hoover up its shares. If that angers you, it’s only because his priorities are not your own.

Speaking of priorities, here’s a sublime quotation from the Brown family’s testimony in that tax court case:

Super Bowl teams do not make as much money as the public thinks. Revenues are shared among all 28 teams and expenses are only borne by the teams that play in the Super Bowl. Super Bowl teams lose more money in the following years because they have to pay their players more for their superior performance.