The Packers play in the smallest market in the league, by a large margin, and are the only publicly owned team to boot. It's quite a leap to assume that they're representative of the rest of the NFL.
Wow, a 400 post thread with lots of research and valid points made on both sides. I envy those who can balance day jobs with some of the posting volume and appreciate all that folks have done to enlighten the rest of us.
I come down marginally on the side of the players for the reason that the owners are claiming that they can't earn an acceptable return and, no matter how we might characterize its relationship to past or future benefits ceded, that they need additional funds set aside for them off the top of the pyramid.
It seems to me that the Players are, then, entitled to see the owners' books. Every major union in the US has access to fully audited financials of the major publicly held companies for which they are working, including details of compensation of the top management. Every public employees union has access to the financial data on the states and municipalities for which they work.
If the Packers' statements are representative, then the Owners will have a strong argument for their position. However, there are enough "lines of interest" in the Income Statement to make looking at the books a useful exercise.
In the Packers' case (as far as I know, the only publicly owned Franchise in the NFL, but I am open to being corrected), Net Income before taxes and expansion revenue declined by 31.9MM between 2005 and 2010.
This was driven primarily by an increase in Player Costs of 62.9MM. Other Operating Expenses seem to have been managed reasonably well, growing at about 5% per year, from 68.4MM to 87.4MM over the five years and actually declining in the past two years. A trained eye, however, would want an explanation of the G&A expense growth at 9.1% per year, even though it seems to have been controlled in the last two years. Other Income/Expense went down 7.9MM from net 5.8MM of income to net 2.1MM of expense. Something else that warrants exploration.
During the same period, total Operating Income only grew 5.2% per year, Media Revenue growing 2.6% (from a large base) and game revenue growing 4.0%, all on a CAGR basis. However "Other Operating Income," a reflection of how the Franchise is marketing itself, grew at a robust 8.2% per year, suggesting that the Packers have been aggressively marketing their brand.
So, if all the books looked like this, the Owners would have a very strong case.
However, there are enough lines of interest, such as Marketing, Administrative, Team and G&A expenses along with "Other Operating Income" and "Other Income Expense" to make looking at the books a worthwhile exercise.
My guess is that some Franchises have been a lot less aggressive than the Packers in marketing their brands and a lot more aggressive in stuffing expenses into the business that pass muster with the IRS but might otherwise be dubious. But, there is only one way of finding this out to the reasonable satisfaction of an objective observer.
Finally, the players have clearly decided that litigation is more in their interests than negotiation. Only Judge Nelson will be able to tell them if that is true.
