Packers report financial 'bounce-back'

Bottom line improved dramatically for most recent fiscal year; franchise in position to navigate upcoming uncertainty

Lambeau Field

GREEN BAY – A year ago at this time, when the Packers revealed an atypical bottom line due to various irregular, one-time expenses, President/CEO Mark Murphy insisted the organization remained in a strong financial position.

This year's financial report, released Tuesday, backed up that stance.

The Packers' operating profit rose from $724,000 a year ago to $70.3 million for the fiscal year that ended on March 31. Net income rose from $8.4 million to $34.9 million. Each figure is comparable to levels seen in recent years prior to last year's report.

The coronavirus pandemic was only a few weeks old when the fiscal year ended, so these numbers do not reflect its impact. Next year's finances will.

Revenue increased by $29 million while expenses fell a little over $40 million compared to the prior year, resulting in the huge change on the income statement.

"It was kind of a bounce-back year," Murphy said in a conversation with "A number of things came together, but after two losing seasons, being out of the playoffs, winning on the field was certainly part of it.

"The previous year we had one-time, extraordinary expenses we didn't have this year, and that makes our financial picture quite a bit different now."

Those abnormal expenses from 2019 fell into three major categories – significant player contracts, the coaching staff changeover, and the team's obligations to the concussion liability fund, the legal settlement being drawn upon by former players. They accounted for $56 million of last year's $477 million in total expenses. This year's total expenses came in around $437 million.

Most of the revenue increase, from $478 million to $507 million – the first time the franchise hit half a billion in revenue in one year – came from a $22 million boost in national revenue, as the league's TV contracts have built-in escalators. A $7 million increase in local revenue was due mostly to local broadcasting and sponsorships, plus the benefits of a home playoff game.

Net income was roughly half of the operating profit due to a change in the U.S. Generally Accepted Accounting Principles (GAAP) that required reporting of unrealized investment losses from the March bear market. The market has recovered significantly since the end of March.

"Obviously we've grown at a steady rate, and the ratings and broadcast television networks will continue to grow at a healthy rate as well," Murphy said.

The coming year amidst the pandemic will be a different story, however. While the NFL is planning to play all 16 regular-season games as scheduled and reap the full rewards of the television contracts, questions remain as to whether fans will be allowed to attend games, and if so, how many.

The organization shut down its Lambeau Field Atrium businesses (Pro Shop, Hall of Fame, stadium tours, 1919 Kitchen & Tap) for several months, with some recently resuming limited operations.

There's still much to be determined moving forward, but Murphy believes the Packers remain well-positioned to manage any economic fallout over the next year.

"We're very fortunate with the television contracts the league has with its broadcast partners. Roughly two-thirds of our revenue is national, and our national revenue covers our player costs, which is our biggest expense," Murphy said.

"Obviously our revenue will be impacted, but I don't see it as being catastrophic for the organization."

Two main factors play into that sentiment.

First, the league and players' union have a new collective bargaining agreement in place through the next decade, and long-term labor stability should help both sides navigate the immediate uncertainty.

Second, the Packers have long maintained a corporate reserve fund, which is currently just north of $400 million, should it need to be tapped into.

"What really helps us work through this is what the organization has done over the last 10-15 years," Murphy said. "The corporate reserve fund, it's there for emergency situations like this. We never thought it would be a pandemic, but here we are. That will really serve us well over the next year or so."

Additionally, the organization's investment in the Titletown development across the street from the stadium is ongoing, with construction of townhouses, an office tower and apartment building continuing through the pandemic. The long-term goals for the project and its positive impact on the community and organization remain intact, as evidenced by the private investment the development has attracted, from townhouse purchases to joint ventures with the office tower.

The team also reported a charity impact of more than $9 million through the Packers Give Back program and continued to boost the endowment of the Packers Foundation.

Much of the team's charitable efforts in the current fiscal year have been directed toward COVID-19 relief efforts, and the organization continues to work with the players to fund social justice initiatives as well.

"Right now I think our focus is on getting the team ready, being able to play games, and we'll make decisions as we go forward whether we have fans in the stands and how many," Murphy said, adding that if there will be fans for games at Lambeau Field, the capacity would be in the 10-12,000 range.

"It's going to be a very different year in every way possible. But I think our priority is to make sure our players are safe, our staff is safe, and the most important thing is being able to play the games."

Related Content