On Wednesday, the team reported record revenue of $258 million — mostly because of revenue sharing from NFL Network. With a slumping economy leading to high unemployment and less discretionary income to spend at the stadium, that's welcome news for the team located in the NFL's smallest market.
However, the Packers reported only a modest net profit of $5.2 million, up from $4 million last fiscal-year. Operating profit plunged from $20.1 million to $9.8 million. The difference between operating profit and net profit can be attributed to investment losses.
The modest profit, according to the team, is because operating expenses soared from $228 million to $248 million. That increase is hitched entirely to player costs, which soared from $139 million to $161 million — a 15.8 percent increase. Player costs are defined as salaries, signing bonuses and incentives, and health and pension costs.
While the team said expenses not tied to player costs fell from $89 million to $87 million in the last fiscal-year, player salaries have been rising by about 11.8 percent while revenue has been increasing only 5.5 percent since the collective bargaining agreement was agreed to four years ago. According to Murphy, the team's income has grown a total of $132 million over those four years. Of that, $123 million went to the players. That's a major reason why the owners opted out of the CBA, leading to this being an uncapped year and leaving the specter of there being no football in 2011.
"We took advantage of all the protections available under the new rules and our costs still went up dramatically," Murphy said. "There wasn't a change in the way we do business. We're still focused on drafting, developing and retaining our own players, and paying as we go."
The pattern of expenses outstripping revenue is not sustainable, the Packers and the league maintain — and no doubt is why Goodell is making an unprecedented visit to the shareholders meeting.
The union's response was surprisingly weak, hammering only at the owners' solution — an 18-game regular-sesaon that would generate more revenue.
"It's 1/32nd of the financial information we've requested in response to their demand that we give back $1 billion and increase our risk of injury by playing two additional games," NFLPA President Kevin Mawae said in a release issued to Packer Report.
No doubt, the union will seize upon the fact that the Packers indeed made a profit even while the stock market continued to spin its wheels and that local revenue stayed relatively steady even with consumers having less to spend. Under the assumption that the economy finds a solid footing and the market takes off, those issues will no longer exist.
For the second consecutive year, the team did not add to its Franchise Preservation Fund, which stands at $127.5 million.
"The organization is in good shape financially, and we remain fully able to support our football operations and provide all the resources needed to field a championship-caliber team," Murphy said. "But over the last few years we've been concerned with the escalation of player costs relative to overall revenue and reduced incentives to ownership to grow the game. 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."
The Packers are the only team that opens its books, so the numbers certainly will be seized upon by Goodell when he comes to town in two weeks.
On another item, Murphy said the team continues to look into expanding Lambeau Field. The venerable stadium, which seats 72,928, could be expanded by about 9,000 by adding more seats or Dallas Cowboys-style standing-room-only tickets in the south end zone.
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Bill Huber is publisher of Packer Report magazine and PackerReport.com and has written for Packer Report since 1997. E-mail him at firstname.lastname@example.org, or leave him a question in Packer Report's subscribers-only Packers Pro Club forum. Find Bill on Twitter at twitter.com/packerreport and Facebook under Bill Huber.
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