Packers Financials

[Patriot Missile]

You would think the stadum so ancient that it is also paid for outright. It's a total different scenario than someone making payments for the state of the art stadium of today. I realize that new stadiums bring in higher revenue. Enough to pay the cost of the stadium? Not sure. The books would tell a great deal.

 

[cmasspatsfan]

You guys are getting confused about the Packers being non profit. They're non profit in the sense they dont distribute any profits, they stay in the kitty for future operating costs. They dont have an owner with deep pockets that can dig into his pockets if theres a loss one year or a big expense comes up like a stadium upgrade/maintenance.
Of course they dont have the owner getting a big paycheck or an owners family and cousins on the payroll but thats the other teams rights to do that.

 

[BradyManny]

The Packers are "non-profit" and community owned. But the poster above ^^^ explains correctly what that "non-profit" means in this sense.

Either way, it's not at all a comparable for the other 31 teams in the league.

And it's not a measuring stick for these negotiations. To pick the most unique team out of the 32, the one team run unlike any others, and use that as an example when it comes to financial info is rather silly.

 

[Ring 6]

The Packers are "non-profit" and community owned. But the poster above ^^^ explains correctly what that "non-profit" means in this sense.

Either way, it's not at all a comparable for the other 31 teams in the league.

And it's not a measuring stick for these negotiations. To pick the most unique team out of the 32, the one team run unlike any others, and use that as an example when it comes to financial info is rather silly.

You are 100% wrong, and I dont think you even understand what non-profit means.
They had profits that they paid taxes on right in that report.
The fact that they retain the profits rather than distribute them to owners is entirely irrelevant.

 

[patsfan-1982]

heres the way i see it if the packers are only makeing 5 million per year profit then we know teams like the pats cowboys jets and giants make at lest 20 million profit but even what that said what the players want is not fair... to many small market teams like the bills will have to move sale or just fold up

 

[patsfaninpittsburgh]

You would think the stadum so ancient that it is also paid for outright. It's a total different scenario than someone making payments for the state of the art stadium of today. I realize that new stadiums bring in higher revenue. Enough to pay the cost of the stadium? Not sure. The books would tell a great deal.

Lambeau was recently upgraded and rebuilt.

As a finance guy, here is what I would review

Player costs as a percentage of revenue and how it cuts across the league. In the Packers case, were the signing bonuses were fully expensed? Is that normal? What period do they cover because that essentially brings expenses forward and means higher future profit.

What would a rookie cap limited in years do for this number.

Stadium costs and amortization schedules. This has to be reviewed with future capital costs and expansions. Is the recent drop in Packer profits the result of Lambeau improvements? If so, when is it paid off and when is the next capital program required?

The one thing players should consider is future facility activity financed by the public will be met with increased hostility.

What are total coaching costs? Could we see some sort of coaching "cap"?

Changes is additional revenue streams. Has merchandising been maxed out? Hot dogs? My guess is the best thing to do is go 17 games with the 17th played overseas at a neutral site. The last major revenue source is international.

The cash flow statements would be quite interesting.

 

[patsfaninpittsburgh]

heres the way i see it if the packers are only makeing 5 million per year profit then we know teams like the pats cowboys jets and giants make at lest 20 million profit but even what that said what the players want is not fair... to many small market teams like the bills will have to move sale or just fold up

Huge problem here.

Cash flow is much more important. So is the balance sheet.

Pats/Cowboys/Giants/Jets may make "$20 million".

They also have debt payments. Those stadiums didn't build themselves.

Look at cash flow. Only interest is expensed. if the stadiums are held in separate company the 'rent" or "lease" will be expensed. However, the company that Owns the stadium will have to be audited.

I may be dumb but I highly doubt Jerry Jones only has an annual $15 million in debt payment.

 

[PatsWickedPissah]

Lambeau was recently upgraded and rebuilt.

As a finance guy, here is what I would review

Player costs as a percentage of revenue and how it cuts across the league. In the Packers case, were the signing bonuses were fully expensed? Is that normal? What period do they cover because that essentially brings expenses forward and means higher future profit.

What would a rookie cap limited in years do for this number.

Stadium costs and amortization schedules. This has to be reviewed with future capital costs and expansions. Is the recent drop in Packer profits the result of Lambeau improvements? If so, when is it paid off and when is the next capital program required?

The one thing players should consider is future facility activity financed by the public will be met with increased hostility.

What are total coaching costs? Could we see some sort of coaching "cap"?

Changes is additional revenue streams. Has merchandising been maxed out? Hot dogs? My guess is the best thing to do is go 17 games with the 17th played overseas at a neutral site. The last major revenue source is international.

The cash flow statements would be quite interesting.

I hope BB doesn't read this forum...coaching cap indeed.

Back to financials, the entire facilities issue is where teams differ tremendously and unpredictably. The primary reason cited by owners for wanting the extra gigabuck was facilities infrastructure. After 20 years or so most stadia need upgrades. Kraft just replaced his video displays. Even if the owners disclosed all their financials the variability in future plans and cost estimates leaves huge room for machinations.

 

[patsfaninpittsburgh]

I hope BB doesn't read this forum...coaching cap indeed.

Back to financials, the entire facilities issue is where teams differ tremendously and unpredictably. The primary reason cited by owners for wanting the extra gigabuck was facilities infrastructure. After 20 years or so most stadia need upgrades. Kraft just replaced his video displays. Even if the owners disclosed all their financials the variability in future plans and cost estimates leaves huge room for machinations.

I wouldn't be shocked if the coaches start to try to do some organizing. If the Packers topline is about $260 million, look at what Ted Thompson and Mike McCarthy's extensions do.

My guess is facility requirements will be tough because public financing will be tough. However, with so many new stadiums, major capital expenditures should be less. I wonder if this topline money will be required to go into escrow.

I can understand the owners wanting games overseas at existing facilities.

 

[DaBruinz]

Aren't the owners the citizens of Green Bay or something like that?

Also, is there reason to think this isn't a representative sample, or do you think it is representative?

So 2 cents on the dollar means the owners get 5 million in profits. Given that they aren't playing the game, that's a pretty good sum of money to take home. Maybe not the best return on their investment, but if they are in this field as an investment....

Say what?? You think 5 million in profits is a good number? On 258 million in revenue??? That is less than 2% profit. Could you please show me any successful business that runs on less than 2% profit?

 

[DaBruinz]

Not sure, but it is the only publicly owned team and in the smallest NFL market, so I don't see how this relates to the rest of the league.

Smallest NFL market based on what?

With the advent of DirecTV's Sunday Ticket, NFL Red Zone, and the "Sports Bar", the idea of "markets" has been minimized. Like Patriots fans, there are huge numbers of Packer fans who no longer live in the GreenBay area. And they follow their team from afar because it's a thousand times easier than it used to be.

In my living in different parts of the country. I've found that, beyond Pats fans, Packer fans, Steeler fans, and Cowboys fans are the pre-dominant out of market fans.

It's my opinion that the Packers are probably closer to the league average than many people want to admit when it comes to financials.

 

[Dragda]

Any business that earns 2 cents of profit on every dollar of earnings is a bad year from bankrupt.

Retailers must be exept from this declaration. I think grocery stores run just around that 1-2% profit.

 

[PatsWickedPissah]

Retailers must be exept from this declaration. I think grocery stores run just around that 1-2% profit.

I believe that to be within bounds of accuracy. Google ran around 30% in 2009 and GE at 9%. Every industry has different profit margin ranges usually inversely indicative of risk and future investment needs.

 

[smg93]

Retailers must be exept from this declaration. I think grocery stores run just around that 1-2% profit.

Grocery Stores may run at a 1 to 2% profit, but since they are likely heavily leveraged owing to the fact that they have a predictable cash flow, then their return on equity should be a lot higher.

I'm not sure if NFL owners are that highly leveraged to have a justifiable ROE. It would be interesting to see what the Packers or any other NFL team's Balance Sheet really is like.

 

[DaBruinz]

Retailers must be exept from this declaration. I think grocery stores run just around that 1-2% profit.

You'd be thinking wrong. It's why grocery stores have a diverse range of things. There are only some products that they get less than 10% profit on. But many which they get more.

 

[townes]

Convertedpatsfan found this link to the Packers financials.

When I looked them over they showed many things that are very different than what posters have been saying.
Essentially in 2010 the Packers received about 258mill in revenue.
Out of that revenue approximately the following happened for every dollar

63 cents went to player costs
37 cents was left

33 cents went to the other expenses of the franchise
4 cents was left for gross profit
2 cents of that went to 'other expenses' or taxes

2 cents was left for a net profit for the owners.

In 2005 about 12.5 cents of every dollar was left for net profit.

Revenues were 58mill more than 2005, yet owners made 20 mill less while player cost was increased by 63million.

So comparing 2005 to 2010:

The Packers generated 58mill more in revenue while seeing non-players costs rise 18mill.
There was 40million more left to 'share' between players and owners and the players got 63mill of it.

So from the Packers perspective while other costs are rising, players costs have risen faster than revenue.

I have asked many posters what would follow if the owners turned over their financials.
Well we have a preview, because 1 of the 32 have, so we can discuss it here.

Let's see the other 31 and then we'll know. Cherrypicking to make your argument is weak. On one hand you argue they shouldn't turn them over and then you take one that favors your argument and use it as proof, really really weak. i guess you now favor full disclosure, go figure?


Have a good day Mr. Pash, i'm goin surfing.

 

[patsfaninpittsburgh]

You'd be thinking wrong. It's why grocery stores have a diverse range of things. There are only some products that they get less than 10% profit on. But many which they get more.

Retail has lower return on sales because of minimal "value added". The 1-2 percent is the accepted number for the entire company.

Their push for things like prepared foods/ floral arrangements/bakery is done to capture margin through "value added".

Return on Investment/Assets a better method. Look at what the current owners paid and the profit.

 

[bucky]

Retailers must be exept from this declaration. I think grocery stores run just around that 1-2% profit.

That's kind of comparing apples to oranges. NFL owners are used to getting a whole lot more than 2% profit.

If you just look at the provided Packers' financials between 1997 and 2010, you see that the pre-tax profit in 2009 and 2010 were 3% and 3.6%. The 2 lowest profit margins of the 13 year period. The average margin over the other 11 years - 12.7%.

That's a big dropoff, especially considering their industry is doing great and the salary cap is growing by 5-7% every year.

 

[bucky]

Let's see the other 31 and then we'll know. Cherrypicking to make your argument is weak. On one hand you argue they shouldn't turn them over and then you take one that favors your argument and use it as proof, really really weak. i guess you now favor full disclosure, go figure?

Nobody's cherrypicking here. The Packers are the only public company in the NFL. That's why this info is available to the public. I'm pretty sure the NFL makes this type of information available to the NFLPA for every team. I think what the NFLPA wants is to dig deeper and say "Why is your G&A up 50% from 2005?"

 

[Ron Sellers]

I think there may be some confusion between gross profit and net profit here. Also, not only do different industries have a wide variance in gross and net margins, but where they are in the supply chain will result in different markups and margins too. The company that makes IC's has one profit structure, the contract company that makes the boards another, the brand name companies like Cisco and Hewlett Packard a separate %, the wholesale distributors work on miniscule profit margins, and the companies that finally sell the product to the end user another profit margin. All of those just mentioned may be considered to be in the IT industry, but all five of them have different labor costs as a percentage of revenue and all five of them have different expectations for a reasonable net profit percentage.

Bottom line is we can't compare the NFL's labor costs to revenue percentage, or net profit percentage to a company or industry we are familiar with and hold that up as proof that they are in good or bad shape.

Back to the original topic: as patsfaninpittsburgh pointed out, without knowing the cash flow and seeing the balance sheet, it's difficult to make a judgement. Expenditures being fully expensed rather than amortized would make a huge difference.

I also recall reading somewhere that a big reason for the Packers' drop in profits in 2009 was due to investments the club had; when the stock market went south their investments did too. Their profits were up a bit in last summer's financial statement but not back up to where they were in 2008. Until those investments start to rebound, perhaps it is not reasonable to expect earnings to return to the levels they were at a few years ago. Remove those paper losses and the financial picture of the team changes dramatically.

Granted the numbers the Packers had last year - a return of 3.8 cents on every dollar of revenue - are pretty low. With few exceptions, anything below 4% is not considered to be good. But one still needs to dig deeper to get a truly accurate picture of the financial well being of the team.