In the three-plus weeks since the FBI and IRS unexpectedly appeared at the headquarters of Pilot Flying J to execute on a search warrant, the NFL has taken an “all is well” approach to the potential impact of the problems facing the company Jimmy Haslam runs upon the NFL team Haslam owns in Cleveland.
Privately, a higher level of concern apparently exists.
According to Mike Freeman of CBSSports.com, “several” team officials fear that the situation ultimately will “drain” Haslam’s finances. “This is more worrisome than people know,” an unnamed team official (presumably from a team other than the Browns) told Freeman.
Freeman points to a rash of lawsuits filed by Pilot Flying J customers as the primary reason for the concern. But it would take a significant amount of civil liability to drive Pilot Flying J into bankruptcy; the bigger concern in our view should be the impact of the scandal on the ability of Pilot Flying J to generate revenue in the future.
Competitors surely are trying aggressively to convert customers from Pilot Flying J, citing uncertainty and fundamental mistrust as the main reasons for making a change. If the business shrinks, Haslam may not generate enough money to service the debt associated with buying the Browns.
This leads to the separate question of whether Haslam even needs income from his interest in Pilot Flying J to pay the bills associated with owning the Browns. Absent more information about the money Haslam has stockpiled over the years and the monthly “nut” he needs to meet in order to keep everything moving, it’s impossible to link the financial troubles of Pilot Flying J to the eventual demise of Haslam’s ownership of the Browns.
Thus, potential criminal liability provides the greatest possible threat to Haslam’s short reign as Browns owner. The 120-page affidavit submitted in connection with the search warrant contains limited evidence that Haslam knew about the alleged rebate/discount fraud against the company’s customers. If there’s more proof that hasn’t been made public — either in secretly taped conversations or in information seized from company headquarters — or if any of Haslam’s key lieutenants trade testimony against him for favorable treatment from prosecutors, Jimmy could be getting indicted.
And if he gets indicted, it’s hard to imagine a league that cracks down aggressively on misbehaving players allowing Haslam to continue to keep his hands on the wheel of the Browns.