Skip to content

Debt or indictment could pose threat to Haslam’s ownership of Browns

Jimmy Haslam AP

As Browns owner Jimmy Haslam sweats out the question of whether he’ll be indicted by prosecutors who are working their way up the Flying Pilot J corporate ladder, a question unrelated to his potential criminal liability in connection with customer rebate fraud potentially could force him to sell the team.

It’s a dynamic mentioned in last week’s Wall Street Journal treatment of the controversy and highlighted on Sunday by Terry Pluto of the Cleveland Plain Dealer.  The debt that Pilot Flying J assumed from 2010 to 2012 could, if the company-owned truck-stop business falters, force Haslam to find another way to make its payments.

The company’s debt “nearly doubled” during that two-year period to $4 billion, when the company’s owners (the Haslam family) provided to themselves a total payment of $1.7 billion.  In 2012, the company assumed $1.1 billion of debt, in large part to fund a $700 million dividend issued “partly so Jimmy could buy the Cleveland Browns.”

Presumably, the numbers were crunched at the time to determine that, in the normal course of business, the debt could be repaid, even though Standard & Poor’s downgraded the company’s debt, calling the associated risks “significant.”

Whatever the risks were, they became more significant after the FBI and IRS raided corporate headquarters and other locations on April 15 — and after executives began lining up to plead guilty and to volunteer cooperation in connection with efforts to prove, as one exec’s plea deal said, “senior management” knew of the rebate scam.

As a result, Jimmy Haslam’s ongoing ownership could be jeopardized on two separate fronts:  Legal and financial.  Even if he’s never personally charged with wrongdoing, the aftermath of the scandal could sufficiently impact the company’s business to force the kind of influx of cash that would come only from selling off the one very major asset that reportedly was acquired at least in part with the money issued by Pilot Flying J last year.

Permalink 24 Comments Feed for comments Latest Stories in: Cleveland Browns, Home, Rumor Mill
24 Responses to “Debt or indictment could pose threat to Haslam’s ownership of Browns”
  1. pooflingingmonkey says: Jul 1, 2013 6:34 PM

    The Browns found another owner indicative of their horrible play.

    Worst franchise in sports? The Browns.

  2. sbdt says: Jul 1, 2013 6:36 PM

    This is a huge amount of effort to exert to get out of the Weeden situation

  3. tirdbirgler says: Jul 1, 2013 6:47 PM

    Corporate America perpetrates this kind of fraud on consumers all the time. It would be nice if it were so aggressively prosecuted all the time and not just when the victims happen to be other businesses instead of average Americans.

  4. thetooloftools says: Jul 1, 2013 6:49 PM

    We’re Cleveland. We’ll be fine. His problems are not our problems. As long as we have a team and can go to the stadium and tailgate and party, we’ll survive.
    Mike Holmgren and his total apathy did more damage to this team then Jimmy Haslam will ever do. Holmgren was just horrible. He should be ashamed, but he has no shame.
    Mike is all about Mike.

  5. MichaelWrites says: Jul 1, 2013 6:53 PM

    This is a team I wouldn’t buy if I came into a sudden windfall.

  6. aaroncurryisbust says: Jul 1, 2013 6:58 PM

    Does anybody still care about this tired story?

  7. mccannagm says: Jul 1, 2013 7:08 PM

    I really wish this team could just on track. From Art to Haslem, these fans have dealt with enough. I’m in Buffalo with a 93 year old owner who has refused to sell. Local efforts have been made through the years to Wilson who scoffs at it. Hope it works out Browns fans!

  8. seaeagle707 says: Jul 1, 2013 7:10 PM

    What we don’t know at this point, are the total assets of PFJ. If we were to assume that the truck stops and the Browns franchise are the sum total, and add in the possibility that the family might fork over enough cash to allow PFJ to weather the storm, then it would be a bumpy ride for the Haslam’s, but a survivable one. But if they don’t have the liquidity available to them, then the quick sale of the biggest asset, the Browns, would be highly desirable. The sale of the baseball team tells us that they may not have much of a portfolio to draw from.

    I’m sure that Roger, is paying very close attention to the proceedings in Cleveland. The last thing he needs now is to have a team go belly-up close to or during the season.

  9. noburghfan says: Jul 1, 2013 7:55 PM

    Yes , i’ll say it again , if you don’t support the big O ,you will be punished !

  10. istateyourname says: Jul 1, 2013 8:16 PM

    You can just call him Little Debbie for now on because he’s selling the Brownies…woo hoo…

  11. sparky151 says: Jul 1, 2013 8:36 PM

    The Browns are owned by Haslam personally, not by his company Flying J. If Flying J’s business suffers and they default, the Browns are unaffected. That’s the whole point of legal structures, to isolate liabilities.

  12. kd75 says: Jul 1, 2013 8:39 PM

    Maybe I’m not a truck driver but what is a Pilot Flying J?

    I’ve never seen one of those on I-95.

  13. kane337 says: Jul 1, 2013 8:43 PM

    Jimmy may have to sell the team to LA to recoup his money.

  14. harrisonhits2 says: Jul 1, 2013 8:47 PM

    Presumably, the numbers were crunched at the time to determine that, in the normal course of stealing huge sums of money from their customers, the debt could be repaid

    There, fixed that sentence for you.

  15. seaeagle707 says: Jul 1, 2013 8:53 PM

    If I could afford to buy the Browns (assuming they were for sale) I’d do it in a heartbeat. I believe that they can be a winning team. They just need the right people at the top, the best “mesh” of talented players and positive attitudes from everybody in the organization. If Paul Allen can get the best (he isn’t going to spend beyond the limit of expected returns), then dagnabbit, so can I.

    But I do wonder how much it would cost me to shanghai John Schneider out of Seattle and John Harbaugh out of Baltimore?

  16. hedleykow says: Jul 1, 2013 8:57 PM

    Call me skeptical, but I still find it highly suspect that this billionaire clown’s brother is the Gov of TN.

  17. pajoe says: Jul 1, 2013 9:21 PM

    It’s another sad face of all the clowns
    that call themselves the Cleveland browns……

  18. hedleykow says: Jul 1, 2013 9:31 PM

    One billion dollars was a crazy figure to pay for the Browns. When Haslam sells the franchise for 750 million in 12 months (or less) from now you will not doubt me.

  19. godofwine330 says: Jul 1, 2013 9:45 PM

    We had an absentee owner who was such a putz that his father wrote in his will that he was to own the team for 10 years after the father passed trying, “to make a man out of him”…and it didn’t work.

    After years of turnover an inconsistencies in the front office/coaching staffs, we thought we had an owner who would keep it consistent for once…now he has legal problems causing financial issues and may be forced to sell the team…leading to the inconsistencies we thought we had escaped from for good. If he has to sell the team, the new owner is going to want to put in his own people and start the Browns over one more time.

    As a fan I will quote Roger Murtaugh…”I’m getting too old for thisssssshh…yeah.”

  20. darkneptune73 says: Jul 1, 2013 9:50 PM

    I suppose the Browns fans can just hope 8-8 is a victory for them. Because overcoming this big of a distraction would be rather incredible for a team that is lingering in rebuilding mode.

  21. joemammy says: Jul 1, 2013 10:32 PM

    Billionaires’ problems exist on some other plane.

    Me? I’m just trying to figure out how I’m gonna pay for my Obamacare.

  22. bryans49ers says: Jul 1, 2013 11:17 PM

    Lol!!!!

  23. citnetter says: Jul 2, 2013 8:00 AM

    I’m sure Haslam’s dad would be real proud of what he did (or is doing) to the family business and name. This guy will not be the owner of the Browns by 2015.

  24. benlw2 says: Jul 4, 2013 10:10 PM

    Letter to the Commissioner

    Mr. Goodell,
    In this unfortunate instance with Brown’s ownership I submit this alternative to stabilize this team and restore a modicum of honor to the shield. Should Mr. Haslam be forced to forfeit ownership of the Browns, I propose the remaining 31 owners vote to allow a one time exception that would allow the city of Cleveland to the same ownership structure employed by the Green Bay Packers.

    Submitted for your consideration.

    Sincerely,
    NFL fans

Leave a Reply

You must be logged in to leave a comment. Not a member? Register now!