The
Packers have reported a profit of $42.7 million for the fiscal year ending
March 31st, 2012. The number smashes the previous record profit of
$25.4 million (set in 2004-2005), and does not include the net $64 million generated
from the most recent stock sale. For the NFL’s smallest market team, this feat
is nothing short of amazing. While profits were no doubt goosed by increased
merchandise sales following the team’s Superbowl XLV, team President and CEO
Mark Murphy deserves a ton of credit. Approximately 100,000 people call the
city of Green Bay home, but the fan base is so deeply committed to its team
that the Packers can compete (and indeed outperform) the likes of Dallas, New
York City, San Francisco, etc. both on the field and on the books. Call this
news a MAJOR win for the long term viability of our beloved franchise.
Excitement
following the team’s Superbowl win, the momentum generated during the regular
season winning streak and decreased expenses all led to the Packers’ massive
profit. Again, the $64 million generated from the stock sale (with the intent
to partially fund the south end zone expansion) is not included in this net
figure, which paints an even rosier picture. Much of the expansion dollars are
being used to build additional box seats, which are truly the difference between
the haves and have nots in the NFL. Ticket revenue is shared between the home
and visiting team as a part of the NFL’s revenue sharing agreements. Revenue
from box seats and ticket license fees (essentially payments for the right to
own season tickets), however, is not shared. This means that teams with large
box seat capacities and healthy demand for season tickets have a tremendous
opportunity to outperform other franchises financially. Considering the 70 some
odd thousand person waiting list for season tickets and the new box seats in
addition to the existing spots, I’d say the Packers are well positioned to take
advantage of this revenue disparity. It’s clear that Mark Murphy is not only
generating huge amounts of revenue for the franchise, but is indeed spending it
in ways that will solidify the Packers’ long term sustainability as a
franchise.
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| Packers stock has consistently outperformed the Dow Industrials |
A
‘Franchise Preservation Fund’ (formerly known as the ‘corporate reserve fund’)
has ballooned from $58 million in 2003 to $127.5 million today. The Packers, apparently
feeling quite comfortable with that buffer, have decided against adding to that
fund with the team’s record profits. One has to wonder what type of
accounts/securities those funds are held in, but that’s a boring discussion for
another day. The fact is, with the Packers in such a strong position
financially, we are positioned as a team to use every penny of salary cap space
we are afforded by the collective bargaining agreement, can pay top dollar for
coaching, training and office staff, can fund lucrative expansions and improvements,
and most importantly ensure that our grandkids will be able to enjoy watching
the Packers play on Sundays. Ongoing real estate investments surrounding the
stadium will continue to present new opportunities for the Packers to expand
their facilities and increase revenue. Indeed there seems to be no end to the
good news for the Packers.
Prior
to this news, I would have had a hard time deciding whether Mike McCarthy or
Ted Thompson had done more for the Packers’ organization in their time here. I
now have to add Mark Murphy to this list. His long term focus coupled with a willingness
to be aggressive now make his relatively low-profile 2007 hiring a pivotal
decision for the Packers. What he lacks in charisma (have you seen this guy on
camera?) he more than makes up for in business acumen and thoughtful determination.
I literally cannot imagine a better situation for my team than Mark Murphy
employing Ted Thompson employing Mike McCarthy employing Aaron Rodgers.
Seriously, we are in a golden age of Packer football, so let’s all just enjoy
this.
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