SBJ/Aug. 5-11, 2013/Franchises

Haslam, NFL develop Plan B

Father would take reins at Browns if necessary

If Jimmy Haslam were to step down from owning the Cleveland Browns because of an adverse turn in the continuing federal investigation into his truck stop company, his father would take over the club, sources said.
The NFL and the junior Haslam developed a contingency plan in the aftermath of the April 15 FBI raid on the headquarters of Pilot Flying J, a move that fueled speculation Haslam might give up his team, which he bought last year for more than $1 billion.

There are no indications at the moment that Haslam is stepping down, temporarily or otherwise. Haslam’s father, Jim Haslam II, 83, founded Pilot in 1958, seven years after playing on the University of Tennessee’s first national championship football team. He ceded day-to-day control of Pilot to his son in 1997, and is chairman of the Knoxville, Tenn.-based, $30 billion-a-year business.

The truck stop company of Browns owner Jimmy Haslam is under federal investigation.
Photo by: STEVEN BRIDGES
Several lower-level company executives cooperated with authorities, with one, Jay Stinnett, having been publicly identified as contending that senior management was aware of the alleged fraud that sparked the investigation.
Stinnett in June pleaded guilty to conspiracy to commit mail fraud.

Jimmy Haslam many times has said he did not know of the alleged scheme to defraud Pilot customers by shortchanging them on gasoline and diesel rebates. The company has already reached a $35 million class-action settlement.

His father, whose day-to-day dealings with the company are limited, has not been linked in any way to the scandal.
The Browns declined to comment.

NFL spokesman Brian McCarthy said in a statement, “To our knowledge, no decision to step back has been made, so looking into who would take over is purely speculative. Jimmy is the best judge of how to keep the focus of the Browns on football and the fans.”

Questioned about the contingency plan crafted by the NFL and the Browns, McCarthy responded, “We are not commenting on any potential scenarios.”

If Haslam’s father were to take over the team for a period of time, it is not believed the league would require an increase in his equity ownership.

The elder Haslam does own part of the team but not enough to meet the league’s rules governing how much of a club the general partner has to own (30 percent, though less when combined with other family members).

The senior Haslam would not be viewed as a general partner in this case but practically akin to an executive whose owner has designated that person authority and voting rights.

There is some case history here for the NFL to rely on in selecting a family member. In 2000, Commissioner Paul Tagliabue suspended San Francisco 49ers owner Eddie DeBartolo Jr. for his role in a bribery scandal in Louisiana. DeBartolo never returned to the team, ultimately agreeing to cede his share of the team to his sister, Denise DeBartolo York. Her son Jed now runs the 49ers.

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