Packers Still Profitable, To The Pleasure Of The NFLPA

In the worst economy since the depression, not many businesses are turning a profit. The Green Bay Packers are. According to Chris Jenkins of the Associated Press, the team generated a $20.1 million operating profit in the fiscal year ending March 31. Due to investment losses (join the club), the total net income was only $4 million. Because the Packers are publicly owned, detailed information regarding their finances is available. And the fact that the Packers made so much money in such difficult times will provide significant ammunition for the NFL Players Association in the recently-launched negotiations for a new labor agreement. And that’s likely why the Packers aren’t popping corks regarding their profits, but complaining about the extent to which player costs have limited the franchise’s overall fiscal performance. “It’s a real concern that our player costs continue to grow at a rate much higher than our revenue’s growing,” Packers president and chief executive Mark Murphy told Jenkins. “It’s not sustainable, and it’s the reason we opted out of the collective bargaining agreement.” But how can that be? Per the CBA, roughly 59 cents of every dollar earned goes to the players. So if players costs are outpacing revenue in NFL cities, it’s happening only for the teams earning lower revenues than other franchises, since all revenues are included in the 59-cent formula. And while the league has done a nice job this time around of keeping the issue of revenue sharing from driving a wedge between the owners, the practical import of Murphy’s statement is that the disparity in unshared revenues is causing player wages to chew excessively into the profits of the teams that are bringing in less total cash. Bottom line? Even for a small-market team like the Packers, the bottom line is looking fine, despite these tough financial times.