Packers' Finances On Solid Ground



The Green Bay Packers once again posted strong profits for the past fiscal year, however the boost in profits was modest considering the team hosted playoff football in January for the first time in three seasons.

As the team released its annual figures this weekend, profits rose roughly 6 percent, from $22 million last year to $23.4 million this year. Once again, the annual report indicates the franchise is on solid financial ground, having maximized on the revenue-generating opportunities available via the renovated Lambeau Field the past five years.

But the notion that two home playoff games in January would have led to record profits for the franchise simply didn't hold true in the NFL's current marketplace.

While total operating revenues were up more than 10 percent, from $218 million to $241 million, operating expenses actually rose at nearly twice that rate (19.6 percent) from $184 million to $220 million.

The revenue increase was split between a $10.7 million boost in national revenues, which encompass national television money, plus radio, internet and licensing revenues and are shared league-wide, and a $12.6 million boost in local revenues, which come from the trio of marketing, Atrium and Pro Shop business.

"A sizeable piece of the increase in local revenues did come from the Pro Shop, which had a record year," Packers President/CEO Mark Murphy said. "That's where the team's successful season and the two home playoff games provided a significant benefit."

The team's overall revenue ranking within the league won't be known until the fall. Last year's $218 million ranked 11th among the 32 clubs, and the Packers expect to be in the second quartile (between 9th and 16th) once again. The top 15 teams in the revenue rankings contribute to supplemental revenue sharing.

The team's overall profits, though, didn't rise substantially from the prior year for multiple reasons.

First, player costs rose $14 million, from $110.7 million to $124.7 million. That rise trumps the $10.7 million increase in national revenues, which is the primary reason the league's owners unanimously opted out of the current collective bargaining agreement with the players' union in May.

"The salary cap is rising faster than national revenues, and that's why the owners have said the agreement isn't working for them. It's definitely a concern of ours at the Packers," Murphy said. The current CBA is now scheduled to expire following the 2010 season, with that final year being an uncapped one if a new agreement isn't reached prior to that.

Second, the team also saw significant bumps in both team expenses (from $17.7 million to $26.5 million) and general and administrative expenses (from $27.5 million to $35.2 million). Those increases were due in part to the cost of strengthening the balance sheet through payments of long-term retirement obligations. The team makes annual payments to these funds but took the opportunity this year, coming off a successful season both on the field and financially, to make additional payments toward this future obligation.

"The organization decided to make the additional retirement contributions at a time the balance sheet dictates it's affordable and makes sense," team treasurer Larry Weyers said. "Those are future considerations that always must be kept in mind."

There also was an impact from new contracts that were entered into with GM Ted Thompson and Head Coach Mike McCarthy, as well as costs related to the leadership transition to Murphy.

Another part of the increase is due to a higher contribution to the Packers Foundation and other community outreach and donations in the past year. Packers contributions resulted in an impact of roughly $5 million to charities and other organizations in the past year.

Those contributions included money raised by thousands of charities and foundations from donations made by the Packers, such as autographed footballs or jerseys that were raffled or auctioned off. They also included money donated through the NFL to support youth football, as well as direct financial contributions from the Packers to charities and community organizations.

"The community involvement of the Packers has increased in recent years, and that continues to be a priority for us," said Vicki Vannieuwenhoven, the team's vice president of finance. "We've always been thankful for the community's support of Lambeau Field, and we're committed to remaining a big part of the community and its support network."

Another future consideration is the Packers Franchise Preservation Fund, which received an additional $2 million and now totals $127.5 million. The PFPF, which was created three years ago from the team's corporate reserve fund and is designed to give the team resources to compete in the NFL should the franchise's viability be threatened, had received larger contributions the past couple of years. The smaller addition this year was due to the money the team invested in purchasing several properties around Lambeau Field, keeping options open for future economic development.

The team also continues to study ways to enhance the fan experience and stadium experience, and some noteworthy improvements have added to capital costs. Last year, the club expanded the Pro Shop by 2,000 square feet and streamlined the checkout process on game days, which fans appreciated. The team is now undertaking another expansion of 2,000 feet to the Packers Pro Shop Game Day store on the stadium's west side.

"We're always looking for ways to improve the fans' experience here at Lambeau Field," Murphy said. "That's an ongoing priority and we always have an eye on what might help in those areas."

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