Welcome to the Packers’ shareholders meeting—an event unlike any other in the NFL
Today is one of the most unique spectacles in all of sports, the annual shareholders meeting for the Green Bay Packers. With profits at an alltime high, thousands of “owners” (fans who hold Packers’ stock certificates) will gather in an 80,000-seat boardroom (Lambeau Field) to hear about the state of the franchise (excellent, if you’ve gotten over last January’s playoff loss). During my time as the Packers vice president, I presented several of these reports breaking down the cap situation to the friendliest group of shareholders you’ll ever find.
The schedule of presentations typically begins with an overview of the previous year from the President/CEO—now Mark Murphy—and a few remarks about the future. But it’s the next speech that everyone comes to hear: the general manager’s report, broken down by position group, addressing the team’s prospects and personnel.
Former general manager Ron Wolf was always quite revealing when describing the team’s strengths and weaknesses. He played to the crowd, saving the quarterback position for last and being sure to describe Brett Favre as “the finest quarterback in the National Football League” to wild applause. The most common question that I received from fans at the annual meeting was, “Is Aaron Rodgers really going to be the guy who takes over when Brett retires?” I always said yes, yet few believed me. Most thought we would pursue a veteran quarterback. Current GM Ted Thompson is far less expansive in his comments, using bland descriptions of players like, “He’s a fine young man and we think he’ll play well for us this year.” Nevertheless, Thompson will draw steady applause.
Following the general manager’s report, the crowd thins. Subsequent reports on finance, marketing, investments, and community relations are important, but the majority of people want to hear about football, not business. And hey, the Packer Pro Shop and Curly’s Restaurant beckon! In recent years the Packers have given shareholders a free tour of Lambeau. It was important to add value, especially to those traveling long distances to attend the meeting, which now occurs before camp opens instead of at the end.
The shareholders’ meeting always reaffirmed my belief that the Packers are much more than a football team. They’re a community, a way of life. Many consider their Packers stock, which isn’t transferable and has no dividend potential, to be one of their most valuable possessions. When managing the Packers’ payroll and contracts, I often thought about what was in the best interest of shareholders. I viewed myself as a steward of a public trust. The closest approximation the Packers have to an owner is the Executive Committee, which deals with only off-field matters. The football operations staff is given complete autonomy in managing the team and player finances.
A key element in the run-up to the shareholder meeting is the release of the team’s financial statement (always a profit) for the previous fiscal year. Within minutes of that document going public, I would get calls and texts from player agents who playfully (and sometimes not so playfully) had suggestions on ways we could put that profit to good use for their clients. A strong showing on the financial report made it especially difficult when I was negotiating over a relatively small amount of money. Agents would point to the newspaper headlines about our tens of millions in profit, with no debt to retire, but I would gently tell them that if we showed a loss I would never ask their client to take less to help the cause.
Just last week, the rosiest report in franchise history came out: the Packers had a record profit of $54.3 million on revenues of $308 million. The profit represents a 26% increase from last year’s then-record of $43 million. Murphy, however, will try to tamp down the report and point to the cyclical nature of contract negotiations skewing the numbers—this offseason’s lucrative extensions for Rodgers and Clay Matthews will not be reflected until the next year’s report. No matter, this year still illustrates the huge uptick in financial performance for NFL teams since the 2011 CBA. Speaking of which…
A Bargaining Issue
Although the Players Association has long implored NFL teams to “show us your books,” the Packers financial statement is the league’s only one available for viewing. Which increases scrutiny on Green Bay from an array of observers. I remember giving a presentation at Stanford during the NFL’s career symposium and being peppered with questions about the report. I begged off, saying I didn’t have the documents in front of me. Upon saying that, the entire audience pointed to the screen behind me, where our revenue and expense chart was being displayed on a PowerPoint!
On a macro level, the Packers’ financials have always been an interesting subject when it comes to collective bargaining. Just like his predecessor, the late Gene Upshaw, NFLPA executive director DeMaurice Smith argues that such a healthy profit—in the league’s tiniest market, no less—is compelling evidence that all teams should be sharing more money with players. I remember having many conversations with Upshaw over lunch during his annual visit to Green Bay. He would look out my office window, down at the Lambeau Field Atrium where tour groups and restaurants hummed along, and say wistfully, “We need to get some of that money.”
I would always remind him that while the Packers are one of the great success stories in all of sport, its unique brand doesn’t compare to anything else in the NFL. More more than 100,000 people are on the season-ticket waiting list, more than a million have toured Lambeau, and practice squad players routinely get recognized on the street. He knew all this, of course, but he couldn’t pass up the opportunity to argue his case. And to be sure, there is a key number in the Packers’ report that shows a glimpse into all teams’ financials. It’s the national revenue from the league, largely from broadcast deals, of $180 million. The import of that number is this: every team should be able to cover its player payroll from national revenue alone, allowing other income to be used elsewhere. Because there is no true owner taking the money for his/her own personal benefit, the Packers’ profit goes toward renovations and is put into a reserve fund that now exceeds $250 million. For a franchise with no stadium debt, this represents quite a healthy balance sheet.
During the 2011 CBA negotiations, however, the owners argued that Green Bay’s drop in profit from $20 million to under $10 million the previous year was linked directly to player costs outpacing revenue growth. Now, in the two years since the new CBA clipped the players’ share of revenue to add to the owners’ bottom line, the Packers’ profit has spiked in consecutive years to startling record levels. Not wanting to give the impression that they took advantage of the players in the CBA negotiations, these are certainly figures the owners don’t want publicized quite as much. But that, my friends, is a column for another day.