SBD/March 8, 2013/Franchises

NFL Panthers Dispute Profitability Numbers In Leaked Documents

Bank of America Stadium could receive over $200M in publicly financed renovations
The NFL Panthers on Thursday said that the team “made $66.5 million during the 2010 and 2011 seasons, after an audit of the team was published” by Deadspin, according to a front-page piece by Steve Harrison of the CHARLOTTE OBSERVER. The audit showed that the team’s “net income for those two seasons was just under $100 million,” and a net income of “nearly $72 million for the year ending in March 2011, after the team went 2-14.” The Panthers said that the team’s profitability “is much lower,” and its “cash flow -- before taxes -- for those two seasons was $66.5 million.” The Panthers said the figures are an “isolated snapshot … during an unusual time as the NFL lockout loomed.” The team said that it had “purposefully reduced spending before a labor agreement with players was reached.” The Panthers said that the “audit shows how difficult it is to compete in the NFL while also trying to undertake a large renovation of their stadium.” The team is seeking “more than" $200M in public funds to renovate Bank of America Stadium. The audit “doesn’t cover the most recent season.” It said the team made $112M in “income from operations in 2011 and 2012.” The team had $14.7M in “interest expense” those two years, reducing its net income to $97.3M. The audit said the team’s “net cash” from operations was $26.7M in ‘11 and $39.8M for the fiscal year ending in March ‘12. During that same year, the Panthers’ “total revenue" was $254M. That includes the team’s “share of the national television and radio contract," along with $47M from NFL Ventures (CHARLOTTE OBSERVER, 3/8).

ON THE SURFACE: Univ. of Oregon business professor Dennis Howard said, "These franchises are a license to print money. This team is pretty damn healthy." Howard estimated that under the terms of the league’s TV deal, the Panthers “could bring in an additional $60-$65 million in annual TV revenue alone.” DEADSPIN’s Tommy Craggs in the original report noted the Panthers last fall “began drawing up plans for renovating Bank of America Stadium.” The Panthers “figured renovations would cost $300 million, $200 million of which, they'd hoped, would come out of the public till.” The city of Charlotte “has been eager to help, to the tune of $144 million.” But the state of North Carolina “thus far has been less accommodating, and with good reason.” Howard in an e-mail wrote, "Based on the team's financial condition, there is absolutely no justification for such a large public subsidy" (DEADSPIN.com, 3/7).

ON THE FLIP SIDE: In Charlotte, Tom Sorensen writes the revelation “might be business as usual in the NFL,” but fans “don't know how much other teams make.” In Panthers Owner Jerry Richardson’s “defense, he's entitled to make money.” He had “hoped to invest $300 million and make middle-aged Bank of America Stadium, one of the NFL's best, less old,” with $200M “from the city and state, $100 million from the Panthers.” Although Charlotte's investment “makes sense economically, the pressure on Mayor Anthony Foxx and the city council to assess their commitment will be enormous.” It is “not about truth.” It is about the “appearance of truth.” Sorensen: “How do the Panthers ask people who on a big day might have $112 in their wallet to support a team that, in a two year span, allegedly made $112 million?” (CHARLOTTE OBSERVER, 3/8).
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