Green Bay The Green Bay Packers said Wednesday that its net proft was up slightly last year, but so are operating expenses, especially player costs.

Team executives released their financial report in advance of the July 29 shareholders meeting at Lambeau Field and stressed that the franchise is still in sound financial shape.

Net profit for the fiscal year ending March 31 was $5.2 million, up from $4 million last year. Profit from operations, which does not include investment income and provisions for taxes, dropped dramatically to $9.8 million, continuing a trend from the past several years.

In the last fiscal year, profit from operations was $20.1 million.

Expenses, especially player costs, increased markedly. Operating expenses jumped to $248 million, up from $228 million. Of that amount, $161 million went to player costs, up from $139 million.

Player costs are defined as not only salary, but signing bonuses, player incentives, and health and pension costs.

In interviews, team executives said the franchise remained in a strong financial position. At the same time, however, they stressed that player costs continue to be a concern. That is and will be the manta the entire National Football League wants to stress as it continues negotiating with the players union on a new collective bargaining contract.

According to team officials, while player costs have gone up 11%, revenue has only gone up 5.5%.
Player costs are growing at twice the rate of revenue, Murphy said. That, he said, helps explain why the league, with the Packers in full support, agreed to opt out of the current contract and go to an uncapped salary season in 2010.

If an agreement is no reached with the just players next March, there could be a lockout for the 2011 season.

Of particular concern, team executives said, is the issue of local revenue. Local revenue, which stays with each franchise, is an important part of the bottom line. For the Packers, local revenue for the fiscal year ending March 31 was $100.4 million, down slightly from $100.8 million.

Murphy said Pro Shop revenue, as an example, was down.

The economy really impacted us, he said.

Weve all been challenged, Murphy said in an interview. Local revenue is the place where the team has felt the economic challenges. Imagine where we would be in we hadnt done the renovation of Lambeau Field.

Murphy and other executives noted that, in order to grow more local revenue, the franchise did not want to do it on the backs of season-ticket holders. Rather, Murphy said, the team is looking and planning at possible projects that include land the team owns west of Lambeau Field, and the possibility that the south end zone will get more seating in the future.

One bit of good news was that the team recovered somewhat in investments. Last year, the investment account was only down $2.1 million. The year before, the team said it had lost $11.2 million.

The Packers also reported that its Packers Preservation Fund, an account designed as a piggy-bank of sorts, had been kept at $127.5 million. That fund is designed to act much in the way a private owner of a sports franchise would tap into his personal wealth to fund a team.

1. Team executives also said that sales and marketing revenue for the team, which includes Atrium revenue and the Packer Hall of Fame revenue, totaled $43 million, down from $43.7 million the year before.
2. National TV revenue totaled $95.7 million, just higher than the year before, when it was $94.5 million. Total national revenue was $157 million, compared with $147 million the year before.
3. Road game revenue, which also is part of national revenue, totaled $16.1 million, compared with $16 million the year before.

Ill post more as the day unfolds.

Packers financial snapshot has impact 
by Andrew Brandt

Today is the long-awaited release of the Green Bay Packers financial report for the preceding fiscal year, a report sure to draw a lot attention and interest in the ongoing labor dispute between the NFL and the NFLPA.

In my nine years with the Packers, I remember the release of the annual report well. As our profit was reported for all to see, I would count the minutes until the calls came in from agents advising on how I could spend some of that profit. It was also a tougher task to ask for pay reductions or stonewall negotiations, as it was transparent about how well we were doing financially.

Teaching tool

The Packer financials would also be part of an annual NFL program for young executives at Stanford. While there my alma mater -- to lecture on the Cap, I also watched sessions analyzing what else the Packers financial report (I couldnt shake it).

Bigger meaning

In the ongoing labor negotiations, the NFL wants the players to share more risk on things like stadium construction, team travel and even practice facility and training costs, arguing the CBA extension of 2006 ratified by a 30-2 vote is too rich for the players and a rollback is needed. The response from the union, of course, has been Show us your books to which the NFL says no. Now one teams books -- the publicly owned Packers will be shown, and the union waits.

Gene UpshawICONUpshaw treated the Packer report as an important marker for the NFL.

The former Executive Director of the NFLPA, the late Gene Upshaw, used treat the Packer financials like the Magna Carta, saying that if tiny Green Bay the smallest NFL market could show profit, imagine how well rest of the league fares?

I would tell Gene that he was technically correct but that Packer nation is unique. Not to underestimate other passionate fan bases, it was rare to find a following as ardent as the Packers. I knew this from the first moment I stepped off the plane and saw half the people wearing Packer gear; from looking for a home and finding Packer "shrine rooms common; from being asked by strangers how negotiations were going with players, etc. I told Gene that the Packers were a national treasure that was hard to replicate.

The numbers

Following the renovation of Lambeau Field in 2003 and its revenue streams -- tours, meetings, weddings, restaurants and the ever-busy Packer Pro Shop creating ancillary income of roughly $20 million per year, our net income went from a loss in 2000 and small profits in 2001 and 2002 to the $20-$30 million range in the middle of the decade.

That was then; this is now. Last year, as the clouds gathered for labor unrest, the Packers showed $4 million in net income, and 83% drop from the prior year. Profit last year was $20 million, a significant drop from two years prior when we had profit of $34 million. Now comes the latest crop report, with onlookers prepared for the worst.

Exhibit A for Commissioner

And in another twist to this bargaining year, Commissioner Goodell will be attending the Packer annual report to its shareholders on July 29, a festive event for thousands of owners to descend on Lambeau field to hear reports on the team. Goodells presence is strategic in the bargaining context, standing in front of the shareholders of the most passionate fan base in the NFL while bemoaning the financial situation of the team and its partners.

The Packers will likely fall in line with the league today in discussing its challenging financial environment in light of a player-friendly CBA. The union will be skeptical and ask for the rest of the teams to show the same, and we will be back to where we started.

At least agents wont be calling with ways for the team to spend its profit.

UPDATE: The Packers report has been released, showing a net profit for the preceding year of $5.2 million, up from $4 million a year ago, while noting that profit from operations, which does not include investment income, dropped dramatically by $9.8 million.

Predictably, the team emphasized increased player costs as a concern going forward, as discussed above towards the larger issue of bargaining between the league and the union. Stay tuned for more.

Net profit of 5.2 Milliom. One free agent signing could conceivably wipe that profit out couldn't it ?

"DGB454" wrote:

"DGB454" wrote:

I believe winning is likely the most important factor in determining revenue.

According to the article, player costs are going up twice as fast as revenue. Player cost is 2/3 of the expenses. I think that would qualify as a major concern.

"PackerTraxx" wrote: