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.

27 responses to “Packers Still Profitable, To The Pleasure Of The NFLPA

  1. the real idiot here is brett favre, this fool could have taken a sweet $20 million dollar retirement package before the recession hit and cash in quickly, plus he could have made twice as much with marketing deals and appearances around wisconsin, plus he could have lined up an easy front office job, but since he chose to be childish and run to the jets and now the vikes, he screwed himself and all he has to show for is a beard that gets more grey every single day.

  2. Does anyone have the amount the Packers were below the salary cap? Certainly that need to be looked at in these #’s. Green Bay under Ted Thompson has refused to spend big money. If the issue is not addressed and a salary cap remains (through a new CBA). You will see the trend of Bigger markets flirting with the salary cap and the small market teams flirting with the salary floor to remain profitable. This would create a atmosphere of the have and have nots that has destroyed MLB and truly thrust the “even playing field” NFL into being the most dominant league in all of sports.

  3. I would’ve expected them to be doing a littler better than that, even with the economy. A boatload of their money comes from tv deals that were made before the bubble burst.

  4. Hey Florio, you’re a lawyer, so I don’t expect you to know anything about business, but..
    “And the fact that the Packers made so much money”
    Really?
    $4 million in profit against $247.9 million in total revenue. That’s a 1.6% profit margin. You could get a better return in a savings account.
    OK, so take away the investment losses and just use the operating profit number of $20.1 million. That’s an 8.1% profit margin. Whoop dee friggin’ do!
    Who the hell wants to put up their multi-millions of dollars to own an NFL team for an 1.6%/8.1% margin?
    This only strengthens the owners hand.
    Don’t worry though Florio. Now that you are a full fledged entrepreneur, you’re going to learn to grasp these concepts real quick. Seriously though, a sincere congratulations on your success. I’ve been a loyal reader since NFLtalk.com. Glad to see you doing so well.

  5. “Due to investment losses (join the club), the total net income was only $4 million.”
    80% loss in investments? What did they invest in? Mortgage brokers and Bernie Madoff? The Dow lost 34% in 2008. So, the Pack lost over double that? What chimp have they got running their money? 80% means someone was taking inappropriate risks with the company’s money.

  6. Truwarier,
    Its posts like that compel me to make comments on these sites. I highly doubt you are, or over were an athlete. If you are, or have ever been, then you are the type to plays for money and not the love of the game. Did it ever occur to you that he enjoys playing and could give to sheets about being offered millions to retire and opportunities to show up at various promos? Give me a break! The majority of pros play because they’re good enough to make it to the big stage and LOVE TO PLAY THE GAME. Favre fits that description and isn’t hurting for cash after all his years in the NFL.
    Next time take a deep breath, think about what you want to say, type it out, walk away from your PC for 5 min, come back, read it again and then consider if you should hit the send button. You, I and all the other fans will thank you for it.

  7. Truwarier,
    Its posts like yours that compel me to make comments on these sites. I highly doubt you are, or ever were an athlete. If you are, or have ever been, then you are the type to plays for money and not the love of the game. Did it ever occur to you that he enjoys playing and could give to sheets about being offered millions to retire with opportunities to show up at various promos? Give me a break! Pros play because they’re good enough to make it to the big stage and LOVE TO PLAY THE GAME. I’m pretty sure Favre isn’t hurting for cash after all his years in the NFL.
    Next time take a deep breath, think about what you want to say, type it out, walk away from your PC for 5 min, come back, read it again and then consider if you should hit the send button. You, I and all the other fans will thank you for it.

  8. So the Packers LOST 16.1 Million dollars in money they invested?
    They should have bought P.F.T. from YOU April 1st… 2008 and sold out to NBC April 1st 2009.
    Do me a favor Mr. Florio….. Sign Greg Jennings on a personal services contract, and have him play for the Packers for the next 5 years. It is the right thing to do.

  9. PJW….
    “FINE ?????????????????????????
    $ 4 Million won’t even let you hire a mediocre cornerback ”
    i think they’re referring to profits after player costs…we usually stay below our cap…also i hate when you people talk about the pack not spending “big money.” get a grip. im glad we dont pay over 100million on bums like haynesworth in FA…this is why your posting here, not managing an NFL franchise, and this is why i laugh at statements like this…

  10. The team reinvest a lot of their profits. The 4 million is what is left after their loses and that doesn’t include player’s salary. That has nothing to do with their salary or the cap.

  11. Looking fine?…. for how long? Sustainable growth and the abiltiy to weather the storms comes from having cash on hand. I am not sure $4M operating profit allows for much of anything.
    Perhaps that Little Debbie you had after midnight while writing this sent a jolt of sugar to the financial lobe of your brain.

  12. Murphy mentions the continued rise in players costs. You mention just the current per dollar distribution so what I’d like to know is distribution over the last few years. If it has been 59 cents year after year then that would not seem to make sense. But if that number has gone up each year and the value of the dollar continues to go down then his statement makes total sense (even without the value of the dollar taken into consideration). I did not major in finance though so I might be missing the big picture.

  13. Brett Farve you idiot doesn’t need the money………besides he wanted to play football more than marketing the packers. I feel once he finally retires…he’ll do so at his home and not out in the public like a lot of other athletes. He truly enjoys being home with his family.

  14. Does anyone really think that owning an NFL team is about profit?
    With a few exceptions, these teams are the equivalent of some middle class guy making $40k a year owning a Corvette, Mustang, or Challenger.
    It’s all about the prestige.
    Have you ever noticed that almost every game on television the camera is aimed at the owner’s box. Almost every fan in America could pick out Dan Snyder or Jerry Jones from a police lineup. Do you think that’s a coincidence?

  15. This is terrible.
    That’s a razor thin profit. The Packers have one of the lowest payrolls in the league as it is. If things continue as they are, they will soon hit the minimum cap. Then what?
    Even if you consider the profit next year to be $20 million with no further decreases in investments, that’s an awful return on a business that is valued at almost a billion dollars. I could put it in a savings account and make that almost much. No corporation worth its salt would stand for it. Judged as most of corporate America does it, the Packers are in the red. Way in the red.

  16. While many corporations posted financial losses and announced cutbacks the Packers still made a small profit. That’s good news to Packer fans, but the size of this profit certainly can’t be considered as a gain for the player’s association in their bargaining attempts for a new CBA. No company would attempt to expand based upon a history of such a small profit margin and I think the opposite result may come from this. The Packer’s financial report might well work in the favor of the owners at the bargaining table. If the contracts for Greg Jennings and Nick Collins would have been settled (and assuming that there would have been a large payout for guaranteed money) the Packers would have shown quite a loss instead of the measly $4 million profit.

  17. 1) The author of this may call the Packers a small market team but they have been in the upper third of NFL teams generating revenue (and thus having to share their profits with the bottom feeders like the vikings).
    2) They being an above average revenue team should tell everyone that most teams did not do as well.
    3) The Packers are a non profit organization. Their “rainy day” fund after losses is only approximately equal to one season’s salary cap. Losing 16 million on a 130 million portfolio is not so bad considering the stock market fell much further.
    4) Player costs were up 11% over the previous year. That is unsustainable. Total Revenue was up 3%
    The Packers generated 247.9 million dollars, 146.3 million of that for the players union. The remaining 101.6 million had to pay for everything else.
    It just doesn’t look very good for the owners. Buy a team for a billion dollars and have profits of 20 million a year. 2% return on investment!!
    No wonder they ask the public to help fund money losing stadiums.
    Look how far local revenue dropped without Brett Favre! Without the #1 selling jersey of all time. A large chunk of the 5 million drop off in local revenue. Last year the Jets had to the biggest selling jersey.
    That’s why Brett Favre should be paid more than any other player. He generates lots of revenue for the franchise.

  18. “He truly enjoys being home with his family. ”
    Playing in the NFL is not the best way to spend time at home with the fam.

  19. So, with no investment loss, they “owner” would have made $20.1M. About the same as McNabb is going to make the next 2 years. So the “owner” who has all those millions invested makes the same as a starting QB. Nice. Your labor lawyer/pro player side is coming out Mike. Get over it, the owners deserve some ROI. If they were maxed out against the cap, the “owner”(if the Packers had one) would be clipping coupons.
    Maximum per player limit of 12M per year, rookie scale, and a salary floor and ceiling set by a more fair number than 59%. I’m sure the trainers, coaches, ushers, toilet scrubbers, and ticket takers would like a raise every now and then.

  20. “more proof that even in a down economy, the Pack have the best fans”
    Add to that the most ignorant.

  21. sharperpicks9 says:
    June 21st, 2009 at 3:17 am
    PJW….
    “FINE ?????????????????????????
    $ 4 Million won’t even let you hire a mediocre cornerback ”
    i think they’re referring to profits after player costs…we usually stay below our cap…also i hate when you people talk about the pack not spending “big money.” get a grip. im glad we dont pay over 100million on bums like haynesworth in FA…this is why your posting here, not managing an NFL franchise, and this is why i laugh at statements like this…
    ———————————————————
    It’s called an analogy. You miissed the point of the comment like a kicker attempting a field goal and putting it though the uprights on the wrong end of the field (another analogy).
    As far as the skinny profits go, there may be items in the balance sheet that make a healthier picture. For example if they wrote off 15 million in capital improvements. (being a non-profit, I’m not sure how the Packers accounting differs from a for profit business)

  22. brett favre just plays the game for the money, prestige, media hype, and gain more revenue for wrangler.

  23. George Halas lent money to the Packers twice to keep them from folding and helped raise the funds to finance the construction of Lambeau Field.
    Of course the Packer fans have forgotten about this because they are just inbred hillbillies but that is ok.
    We never told them the secret about indoor plumbing so I understand why they are so bitter.

  24. Philtration says:
    June 21st, 2009 at 10:02 pm
    George Halas lent money to the Packers twice to keep them from folding and helped raise the funds to finance the construction of Lambeau Field.
    Of course the Packer fans have forgotten about this because they are just inbred hillbillies but that is ok.
    We never told them the secret about indoor plumbing so I understand why they are so bitter.
    —————————————————————
    Right…you must be a Bears fan…but how ironic you say that as the Northsiders are still urinating in troughs at the world’s largest outdoor bar, aka, Wrigley.

  25. east96st says:
    June 21st, 2009 at 1:35 am
    “Due to investment losses (join the club), the total net income was only $4 million.”
    80% loss in investments? What did they invest in? Mortgage brokers and Bernie Madoff? The Dow lost 34% in 2008. So, the Pack lost over double that? What chimp have they got running their money? 80% means someone was taking inappropriate risks with the company’s money.
    ————————————————————————–
    No, that’s not true…the Packers have a capital preservation fund. The majority of their net income goes into this fund, which is somewhere around $150M
    I presume you got to the “80% loss” by taking the $4M net profit divided against the $20 operating income…that’s not a measure of market loss. The $16M in investment losses came from a MUCH bigger pool of money (the preservation fund).

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