SBJ/June 21 - 27, 2004/Finance

Packers turn big-city profit: Record $23M

The Green Bay Packers earned a record $23 million during their 2004 fiscal year, making the smallest market in the NFL one of its most lucrative.

Buoyed by the first full season in a completely renovated Lambeau Field, the Packers’ operating revenue rose 17 percent to $179 million for the year ended March 31, which encompassed the 2003-04 season.

“I am happy to report we were 10th [in league revenue ranking] for the 2003 season,” said John Underwood, the team’s treasurer. “We were able to hold that rank even with Chicago and Philadelphia coming on line with new stadiums. … We can compete.”

Indeed, while the team ranks 10th in revenue, it is almost surely in the top handful of clubs in terms of profit because the Packers have so little debt. By contrast, the teams Underwood mentioned have large debt loads.

The Packers are the league’s only public team, and the company’s reported results, scheduled to be released Sunday, offer a rare snapshot into an NFL team’s and the secretive league’s finances.

In the 2003-04 season, for example, the club received $99.9 million of leaguewide revenue, $81.2 million from television, $11.4 million from its road-game share and $7.3 million of “other NFL revenue.” The other is everything but broadcast and cable TV money, and includes DirecTV, national sponsorships and licensing.

The Packers’ take of this category was padded by about $1 million because of the benefit from the league’s stadium financing fund and national radio broadcasts, said John Jones, the team’s chief operating officer. That would mean that the league on average distributed $6.3 million to each of its 32 clubs in this area, or $202 million.

If there is one area troubling the Packers, at least for management, it is the alarming rise in player bonus payments. The Indianapolis Colts’ Peyton Manning, for example, received a reported $34 million bonus for signing his $98 million deal.

“That percentage caught our eye,” Jones said. As a result, the team may revise the amount of money it is plowing into its corporate reserve fund, which is now where all profits go. The team had set a goal of having the fund equal the operations budget, but it now may set a higher target to account for the large bonus payments.

In fiscal 2004, the reserve fund reached $84.5 million, while the operating budget hit $113 million. The reserve fund is essentially a rainy-day pot, as the publicly owned team is without a deep-pocketed owner to fund large bonuses. The club thus needs another source.

The big increase in local revenue for the Packers derived primarily from the new Lambeau Field, which was financed primarily with public money. Ticket income jumped 30 percent to $26.5 million; marketing revenue rose 34 percent to $14 million; and Pro Shop dollars surged 38 percent to $15.3 million.

The team’s Atrium of a restaurant and shops enjoyed $3 million in revenue in its first year of operations.

The Packers’ income looks to decline slightly in the current fiscal year because of the lack of any further expansion fee payments, and investments in practice fields. More than 9 percent of the fiscal 2004 profit was derived from the Packers’ share of the Houston Texans’ expansion fee.

Green Bay Packers financials
(millions)
Year
Net income*
Operating revenue
Operating expenses
Revenue rank
2004
$23.0
$179.1
$150.0
10
2003
$18.8
$153.1
$129.9
10
2002
$7.0
$132.0
$128.7
20
2001
$8.7
$123.8
$121.0
18
2000
$5.8
$108.8
$109.0
16
1999
$17.0
$102.7
$95.7
15
1998
$6.3
$82.2
$74.8
9
Note: For fiscal years ended March 31
* Includes after-tax expansion fees from the Houston Texans from 2000 to 2004 and a one-time after-tax expansion-fee payment from the Cleveland Browns in 1999 of $10.6 million
Sources: Green Bay Packers annual reports, team executives

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