Ohio Supreme Court Upholds Brown Family's Control Over Bengals

The Ohio Supreme Court this month upheld an '07 ruling in a Hamilton County Probate Court, which "effectively validated a stock deal that gave" Bengals Owner Mike Brown's family "unquestioned control" of the team, according to Kimball Perry of the CINCINNATI ENQUIRER. The case, which involved the $300M estate of late Bengals investor Austin Knowlton, revealed that from '94-'00 -- 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" $50M. An issue in the case "was a 1994 deal between Knowlton and Brown" in which Knowlton sold "60 of his then-236 shares of the Bengals to the Brown family" for $6M. 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." Knowlton "got $6[M] for those shares and Brown agreed to pay shareholders $80[M], more than half of which -- $48[M] -- went to the Brown family." Trial evidence indicated that Mike Brown "got unquestioned control of the team and the right to determine how much the team would pay his family members employed there." Court documents indicated that the $48M paid to the Brown family "came as the team paid five Brown family members annual average salaries of more than $700,000." Perry noted the trial also revealed that Mike Brown "received millions in 'general manager' bonuses, even though the team has no such title." The team was found to have "paid a 'general manager' bonus of $1,237,000 in 1999 and $1,947,695 in 2001," and Brown testified that he "received a bonus every year since he took over running the team" in '91 (CINCINNATI ENQUIRER, 4/25).

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