woodbuck27
06-18-2006, 08:23 AM
Packers Rise To No. 7 In NFL Revenue Rankings
by Mike Spofford, Packers.com
posted 06/17/2006
When the renovated Lambeau Field debuted in 2003, the goal was for the stadium to keep the Green Bay Packers' annual revenues in the upper half of all NFL teams.
It has done that, and then some.
For what is believed to be the first time in franchise history, the Packers have cracked the top quartile in NFL revenue rankings, rising to seventh of the 32 teams according to financial figures released for the past fiscal year. The Packers had ranked 10th for the past three years running.
"To be honest, I was a little surprised to find out we were that high," said Larry Weyers, Packers treasurer. "We've always talked about staying in the second quartile, that second group of eight, so this is very positive.
"It's a tribute to the Packers organization that this facility is doing exactly what they told everybody it was going to do."
For the nation's smallest NFL market, a No. 7 ranking is a remarkable accomplishment, attributed primarily to the fact that the $208.4 million in total revenues is split almost evenly between national and local revenues.
National revenues, such as television contracts and other NFL ventures that are shared across the League, accounted for 55 percent of the Packers' total. Television revenue alone totaled $87.3 million, or 42 percent of the total.
The other 45 percent came from local revenues, which are not shared to the same extent. A significant chunk of local revenues for the Packers came from the stadium in what are termed non-game revenues from the Lambeau Field Atrium, the Packers Pro Shop and the team's marketing efforts (corporate sponsorships, signage fees, etc.).
That Lambeau Field revenue totaled $41.4 million, similar to last year's figure except that it was achieved without the benefit of a postseason game and with two games last season falling on holiday weekends (Christmas and New Year's). Other events, such as the Frozen Tundra Hockey Classic between the University of Wisconsin and Ohio State this past February, helped to offset that.
As a publicly owned franchise, the Packers are the only NFL team that releases its financial figures, so there is no way to verify the six teams that ranked ahead of Green Bay in revenues last year. But the bottom line is the Packers are outpacing much of the rest of the league in using its stadium to generate revenue.
"I think a lot of the credit goes to the fact that this stadium is what it is, it's a 365-day-a-year destination for people," Weyers said. "But it's also a tribute to the fact that the Packers followers are nationwide and worldwide. They like to touch the Packers, like to come to Green Bay and like to come to Lambeau Field."
Overall profits down
Despite the 4.2 percent rise in revenues to $208.4 million, the team's after-tax operating profit dropped 29 percent from $25.4 million to $18 million.
Overall operating expenses rose 12.8 percent to $187.5 million, which included a 5.1 percent increase in player costs from $97.9 million to $102.9 million, and a 59 percent increase in team expenses, from $21.2 million to $33.6 million.
Weyers said there are primarily two reasons for the dramatic increase in team expenses. One is the team had a change in accounting policy, resulting in immediately expensing some benefit costs that had been deferred in the past. The new method is more conservative in an effort to strengthen the balance sheet, Weyers said.
The other factor was the change in the coaching staff, as Head Coach Mike McCarthy and other assistants were brought in at the end of the 2005 season to replace the former staff, some yet under contract when dismissed.
"Any time a major corporation changes the starting team, it's going to cost some money," Weyers said. "Corporations in almost any industry find it necessary to do that occasionally.
"The Packers made that decision and incurred the expenses to do that this year."
Franchise Preservation Fund Still Growing
The drop in profits did not stop the growth of the Packers Franchise Preservation Fund (PFPF), however.
The PFPF was created last year, designated from the team's corporate reserve fund, and is designed to give the Packers the resources to compete in the NFL should the franchise's viability be threatened, and to assure the team's long-term future in Green Bay.
The fund was increased by $17.8 million, or 18.2 percent, to $115.5 million.
Weyers noted that the fund must continue to grow in the event that the structure of the League's finances change in a way that could hurt the Packers.
For example, last year there was the possibility of the salary cap vanishing in 2007 should a new collective bargaining agreement not be signed, but an uncapped year never happened. Also, there was financial uncertainty as the League was negotiating a new national television contract, but that was resolved as well.
"Those are the reasons for putting the Franchise Preservation Fund in place, so we can address challenges like that," Weyers said. "Fortunately, it all worked out quite well. The TV contract was signed, and the collective bargaining agreement was put in place, and that will go through 2011."
Revenue Ranking May Be At Peak
Rising from or even simply staying at No. 7 in the revenue rankings may be nearly impossible for the Packers in the coming years. Not because revenues won't continue to grow, but because other teams soon will begin using new stadiums and benefiting from the same types of revenues the Packers have been generating since 2003.
Arizona is scheduled to open its new stadium this year, followed by Indianapolis in 2008, and Dallas and the N.Y. Giants/N.Y. Jets in 2010.
"This may be an all-time high for us in that ranking," Weyers said. "Four new stadiums are coming into play here in the next 3 1/2 years, and they will certainly pass up the Packers in generating local revenues if they do it right."
That presents the team with the challenge of finding new and innovative ways to use its stadium to continue to increase local revenues. Now that the novelty of the renovated Lambeau Field has diminished, new opportunities are in the planning stages or have been recently launched.
Four more areas - the Lee Remmel Press Box, the Miller Lite End Zone, Club 1919 in the indoor club seats, and the Hall of Fame Grill - have been opened for special events to maximize the options for the public and local businesses.
"We knew there would be a period of great interest in the first couple of years, which there has been," said Vicki Vannieuwenhoven, the Packers' director of finance. "That's one of the things we're working on is to keep those levels up there now that everyone has tried it once."
Profits Trending Downward?
The 29 percent drop in profits this year may have been an anomaly due to the coaching change, but in the coming years it won't surprise the Packers to see profits drop some from the record $25.4 million mark a year ago.
That's primarily due to the new collective bargaining agreement between the owners and the players, which already has increased this season's salary cap from an expected $94.5 million to $102 million. In 2007, the cap is expected to rise to $109 million.
That sharp increase in player costs, combined with the new supplemental revenue sharing that will have the Packers contributing roughly $4 million into the league's revenue sharing pool, will make it difficult to re-establish profits in the $20 million range.
But that won't stop the Packers from trying, and from continuing to use a crown jewel like Lambeau Field to remain competitive financially with the rest of the League.
"We compete against some very innovative and creative people who are owners of these franchises," Weyers said. "But it's important for the Packers to look toward the future and be creative and be innovative and find ways to generate revenues using the facilities they have right here. We're going to be addressing that to make sure the Packers stay competitive."
by Mike Spofford, Packers.com
posted 06/17/2006
When the renovated Lambeau Field debuted in 2003, the goal was for the stadium to keep the Green Bay Packers' annual revenues in the upper half of all NFL teams.
It has done that, and then some.
For what is believed to be the first time in franchise history, the Packers have cracked the top quartile in NFL revenue rankings, rising to seventh of the 32 teams according to financial figures released for the past fiscal year. The Packers had ranked 10th for the past three years running.
"To be honest, I was a little surprised to find out we were that high," said Larry Weyers, Packers treasurer. "We've always talked about staying in the second quartile, that second group of eight, so this is very positive.
"It's a tribute to the Packers organization that this facility is doing exactly what they told everybody it was going to do."
For the nation's smallest NFL market, a No. 7 ranking is a remarkable accomplishment, attributed primarily to the fact that the $208.4 million in total revenues is split almost evenly between national and local revenues.
National revenues, such as television contracts and other NFL ventures that are shared across the League, accounted for 55 percent of the Packers' total. Television revenue alone totaled $87.3 million, or 42 percent of the total.
The other 45 percent came from local revenues, which are not shared to the same extent. A significant chunk of local revenues for the Packers came from the stadium in what are termed non-game revenues from the Lambeau Field Atrium, the Packers Pro Shop and the team's marketing efforts (corporate sponsorships, signage fees, etc.).
That Lambeau Field revenue totaled $41.4 million, similar to last year's figure except that it was achieved without the benefit of a postseason game and with two games last season falling on holiday weekends (Christmas and New Year's). Other events, such as the Frozen Tundra Hockey Classic between the University of Wisconsin and Ohio State this past February, helped to offset that.
As a publicly owned franchise, the Packers are the only NFL team that releases its financial figures, so there is no way to verify the six teams that ranked ahead of Green Bay in revenues last year. But the bottom line is the Packers are outpacing much of the rest of the league in using its stadium to generate revenue.
"I think a lot of the credit goes to the fact that this stadium is what it is, it's a 365-day-a-year destination for people," Weyers said. "But it's also a tribute to the fact that the Packers followers are nationwide and worldwide. They like to touch the Packers, like to come to Green Bay and like to come to Lambeau Field."
Overall profits down
Despite the 4.2 percent rise in revenues to $208.4 million, the team's after-tax operating profit dropped 29 percent from $25.4 million to $18 million.
Overall operating expenses rose 12.8 percent to $187.5 million, which included a 5.1 percent increase in player costs from $97.9 million to $102.9 million, and a 59 percent increase in team expenses, from $21.2 million to $33.6 million.
Weyers said there are primarily two reasons for the dramatic increase in team expenses. One is the team had a change in accounting policy, resulting in immediately expensing some benefit costs that had been deferred in the past. The new method is more conservative in an effort to strengthen the balance sheet, Weyers said.
The other factor was the change in the coaching staff, as Head Coach Mike McCarthy and other assistants were brought in at the end of the 2005 season to replace the former staff, some yet under contract when dismissed.
"Any time a major corporation changes the starting team, it's going to cost some money," Weyers said. "Corporations in almost any industry find it necessary to do that occasionally.
"The Packers made that decision and incurred the expenses to do that this year."
Franchise Preservation Fund Still Growing
The drop in profits did not stop the growth of the Packers Franchise Preservation Fund (PFPF), however.
The PFPF was created last year, designated from the team's corporate reserve fund, and is designed to give the Packers the resources to compete in the NFL should the franchise's viability be threatened, and to assure the team's long-term future in Green Bay.
The fund was increased by $17.8 million, or 18.2 percent, to $115.5 million.
Weyers noted that the fund must continue to grow in the event that the structure of the League's finances change in a way that could hurt the Packers.
For example, last year there was the possibility of the salary cap vanishing in 2007 should a new collective bargaining agreement not be signed, but an uncapped year never happened. Also, there was financial uncertainty as the League was negotiating a new national television contract, but that was resolved as well.
"Those are the reasons for putting the Franchise Preservation Fund in place, so we can address challenges like that," Weyers said. "Fortunately, it all worked out quite well. The TV contract was signed, and the collective bargaining agreement was put in place, and that will go through 2011."
Revenue Ranking May Be At Peak
Rising from or even simply staying at No. 7 in the revenue rankings may be nearly impossible for the Packers in the coming years. Not because revenues won't continue to grow, but because other teams soon will begin using new stadiums and benefiting from the same types of revenues the Packers have been generating since 2003.
Arizona is scheduled to open its new stadium this year, followed by Indianapolis in 2008, and Dallas and the N.Y. Giants/N.Y. Jets in 2010.
"This may be an all-time high for us in that ranking," Weyers said. "Four new stadiums are coming into play here in the next 3 1/2 years, and they will certainly pass up the Packers in generating local revenues if they do it right."
That presents the team with the challenge of finding new and innovative ways to use its stadium to continue to increase local revenues. Now that the novelty of the renovated Lambeau Field has diminished, new opportunities are in the planning stages or have been recently launched.
Four more areas - the Lee Remmel Press Box, the Miller Lite End Zone, Club 1919 in the indoor club seats, and the Hall of Fame Grill - have been opened for special events to maximize the options for the public and local businesses.
"We knew there would be a period of great interest in the first couple of years, which there has been," said Vicki Vannieuwenhoven, the Packers' director of finance. "That's one of the things we're working on is to keep those levels up there now that everyone has tried it once."
Profits Trending Downward?
The 29 percent drop in profits this year may have been an anomaly due to the coaching change, but in the coming years it won't surprise the Packers to see profits drop some from the record $25.4 million mark a year ago.
That's primarily due to the new collective bargaining agreement between the owners and the players, which already has increased this season's salary cap from an expected $94.5 million to $102 million. In 2007, the cap is expected to rise to $109 million.
That sharp increase in player costs, combined with the new supplemental revenue sharing that will have the Packers contributing roughly $4 million into the league's revenue sharing pool, will make it difficult to re-establish profits in the $20 million range.
But that won't stop the Packers from trying, and from continuing to use a crown jewel like Lambeau Field to remain competitive financially with the rest of the League.
"We compete against some very innovative and creative people who are owners of these franchises," Weyers said. "But it's important for the Packers to look toward the future and be creative and be innovative and find ways to generate revenues using the facilities they have right here. We're going to be addressing that to make sure the Packers stay competitive."