National Football League: Green Bay Packers release financial report
The Green Bay Packers released their annual financial report to the public on Wednesday, July 14th. The Packers are the only publicly owned non-profit franchise in the NFL, and thus are the only franchise required to release a financial report. According to the report, the Packers posted record revenues for the fiscal year but their operating profits still fell substantially.
The team reported $258 million in the last year, but with that, they also reported a record operating cost of $248 million. Those costs were significantly higher in comparison with last year’s $228 million. Their 9.8 million dollars operating profit is a far cry from the $20 million last year, and even more disturbing considering 2008 saw a $34 million operating profit. However, factoring in their investment losses, their net income of $5.2 million was still higher than last year’s 4.
The team attributed their rapidly rising operating costs to player salaries. The Packers said that all other expenses, minus player salaries, fell during the fiscal year from $89 to $87 million. The overall operating costs still rose to record levels. In a statement issued by the CEO of the Packers, Mark Murphy, it was reported that since the collective bargaining agreement had been signed, the team’s income grew by $132 million; of that total, $123 million went to the Packers’ players.
Murphy told the press that they took advantage of all protections available to them but the players’ costs still jumped. He said that the NFL’s current labour situation is simply not sustainable. Although the Packers are the only team to have released their financial details, all franchises have expressed reservations about player costs and concessions they made in the 2006 collective bargaining agreement to the National Football League Players Association. According to the agreement, the players were entitled to almost 60% of the total revenue of the League.
In Murphy’s opinion, NFL owners were serious and united on getting the system changed, and unless something acceptable is agreed, the collective bargaining agreement might end with a lockout in 2011. Negotiations are slow and troublesome. The executive director of the NFLPA asked for the more detailed financial reports from other teams, and the teams denied the request, arguing that enough information was available to come to an acceptable labour agreement.
However, from the NFLPA’s point of view, using the Green Bay’s financial reports to make a generalized statement about all NFL franchises wouldn’t be right. The Packers are unique in the NFL. They have the most loyal fan base and have never moved from their city. That said, they are still based in a city of just slightly more than 100,000 people. The larger NFL franchises, the franchises that are in effect driving up costs of the Packers in this collective bargaining agreement, can’t use the Packer’s report to make arguments about their financial situation, or use them in the CBA negotiation.
The small town Packers have to cope with player salaries rising with rising combined revenue of the NFL. That leaves the Packers having to cover player salaries rising 11.8% annually, with revenues rising 5.5%. Contributing to the disparity is the fact that the Packers’ local revenues stayed flat, decreasing only very slightly to $100.4 from last year’s $100.8.
Murphy said that the poor economy prevented the Packers from seeing a rise in local revenues after a winning season of 11-5. The fact that there were no playoff games in Green Bay also made its impact on total revenue. Regardless, he believed that the organization was in good enough shape and quite capable of supporting football operations. His concerns were more for the future of the game and the disparity between rising revenues and player costs.
“That's what we're looking to address in the CBA negotiations, because if the current trend continues, it's not good for the Packers or for the NFL,” Murphy said.
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