This past year, the Green Bay Packers saw their operating profit rise $2.2 million over the previous fiscal year, a modest increase for a Super Bowl champion.
Interestingly, the boost may not have been even that much had it not been for the NFL’s work stoppage, according to team officials who discussed the financial report with packers.com.
The $2.2 million increase in operating profit – from $9.8 million last year to $12 million this year – was almost entirely due to a $2 million drop in player costs. That drop was mostly a function of the work stoppage, which prevented the team from signing any players to contracts during March, the final month of the fiscal year when the normal free-agent signing period opens.
Had there not been a work stoppage, it’s reasonable to assume the Packers would have signed another player or two in March and the operating profit would have remained stagnant, or even fallen below last year’s, despite a Super Bowl title.
That would have continued the trend of player costs rising at a faster rate than revenues, the primary reason for the league’s and the Packers’ push for a new collective bargaining agreement.
“Player costs are still going to continue to rise, so we still need to work to increase local revenue to keep pace with the rest of the league,” Packers President/CEO Mark Murphy said. “The hope has been that we could agree to a system that balances out the previous trend.”
That new agreement was approved by the owners last Thursday and then by the players on Monday, finally signaling the start of the new league year.
“The lockout has been difficult for everyone,” Murphy said. “I appreciate how hard both sides worked to reach a deal that’s good for the game.”
Gross revenues reached another all-time high for the Packers, rising 9.5 percent to $282.6 million. Expenses rose nearly as much, however, jumping 9 percent to $270.6 million. Player costs and team expenses, which included four postseason road games, accounted for 72 percent of all expenses.
National revenues, such as those from television contracts, rose a modest 3.6 percent. Local revenues, or stadium revenues such as those from the Lambeau Field Atrium businesses, saw a significant 18 percent rise, mostly due to two factors – a major boost in Pro Shop sales during the team’s playoff run and following the Super Bowl title, and a ticket price increase. That helped offset the cost of the four postseason road games.
Overall, the Packers’ net income increased from $5.2 million in fiscal 2010 to $17.1 million this past year, with most of the increase attributed to investment income.
“The gains offset investment losses from the previous two years,” said Paul Baniel, the Packers’ vice president of finance. “That has returned the investment portfolio to its level prior to the economic downturn.”
Moving forward, the challenge remains to find new local revenue streams and maximize on those that exist.
The Packers continue to study potential expansion of Lambeau Field, and team officials appreciated that both parties in the CBA negotiations recognized that stadium development is important to the league as a whole and a big part of the viability of the game.
Other economic development projects for the area surrounding Lambeau Field continue to be discussed as well.
“The agreement will continue to help us plan for more development, which will help generate more local revenue and add economic value for the community,” said Jason Wied, vice president of administration/general counsel. “Continued development will be a priority for the Packers.”