While still managing to secure a profit of $724,000, the Packers saw a 98% decrease in operating profit compared to the season before. While recent poor performance by the team is a factor, more importantly, the team’s spending increased dramatically.
Mark Murphy spoke on the subject to the Associated Press:
From a financial standpoint, it was a unique year for the Packers. We were a little more aggressive than we’ve been in a number of years. If we can get back to the playoffs and get to the Super Bowl, that always helps. We have a policy regarding our season-ticket pricing. We want to be just below the league average. We don’t want everything to be on the backs of our season ticket holders. We don’t have a rich, deep-pocketed owner, so we have a $400 million corporate reserve. Three or four years ago, we put $50 million into the corporate reserve. It’s grown since then with investment returns, and we’ve made significant investments in real estate around this area.
A strong factor contributing to recent expenses is the massive contract extension for Aaron Rodgers and offseason acquisitions such as Za’Darius Smith, Preston Smith, Adrian Amos, and Billy Turner. The team spent a total of $113.5 million on just these moves alone. It is not a coincidence that these big spending moves coincide with the departure of Ted Thompson.
As mentioned, they did still manage to turn a profit so the $400m reserve fund remains untouched. The team certainly isn’t in financial dire straits, but the miniscule profit is atypical to how the team was ran under Thompson.
The Wall Street Journal reported recently that some NFL team owners are pushing for an 18 game season. One creative new spin on the idea to try and garner more support is the idea of limiting players to 16 games a season in an effort to get the approval of the NFL Players Association.
Murphy spoke with WSJ on the idea of a season expansion:
Quite honestly, that is a hard sell to fans. We’re looking at the overall structure of the season. And quite honestly, our preseason is not very good. I would be very concerned about the health and safety aspects of adding two regular season games. And so I think there’s a number of things we’re looking at. I think also the possibility of expanding the playoffs. I think that could be a positive for the league. And the other is the international aspect. There’s some things that we can do in the season structure that would allow us to play more games at neutral sites, either internationally or non-NFL cities that would help us grow the game.
While the move towards 18 games a season would generate a lot of additional revenue for teams and players, it seems like fans are getting marginalized in the process. Imagine a scenario in which a fan travels far to attend a game only to find out that one or more star players will be benched to satisfy the 16 game player limit. Murphy’s suggestion would include a 17th neutrally located game or international games, something the Packers have pushed for in the past.
Well…..it isn’t quite this simple.
“From a financial standpoint, it was a unique year for the Packers. We were a little more aggressive than we’ve been in a number of years” – Mark Murphy
This is Murphy’s way of deflecting the blame on the expense of player procurement. That maybe be the smallest part of the problem when it comes down to P&L.
The Packers (and all other teams were given 274.3 million in revenue sharing for 2018. Out of that the Packers paid player salary’s totaling 205 mill and some change. When NFL revenue increases, then and only then does player expense increase.
Player salary’s are basically a fixed cost based on the amount of revenue under the CBA. So where are the real problems? Lets take a look.
Another question that begs to be asked is where does all the cash come from for acquiring real estate, hiring extra personnel and building and maintaining the new Disney Packer Park called TitleTown? It surely doesn’t sound like it’s coming from the reserve fund and if it’s coming from yearly revenues, then that has a direct effect on profitability. What do we need to know about this? Lets find out.
Also included in the Packers’ numbers are their investment in Titletown, the real estate development surrounding Lambeau Field, which Packers president Mark Murphy says is performing up to expectations, but isn’t yet profitable nearly two years after launch.
What else does Murphy say about the matter….?
” If we can get back to the playoffs and get to the Super Bowl, that always helps.” Gee Mark…ya think? Never mind some very smart people think Murphy’s inaction and his football philosophy of (it will run itself) was cause for the regressive state of this team annually.
Yes…when you lose, fans come to TitleTown less often, they visit the Packer HOF less often, and don’t take as many Lambeau tours, and don’t buy all that highly profitable merchandise from the Pro shop on site, or online.
Then after investing all that cash and revenue capital in creating TitleTown 2 years ago, we find that the Packers endured two losing seasons during that time. Investment analyst might deem that worse case scenario.
Now…lets look at where we might have squandered millions elsewhere. Where does the money come from that was/is being paid to Ted after he sold his home and moved to Texas? Also…where does the money come from to pay off McCarthy’s one year (lets keep this a secret) extension. while he sits on his couch every Sunday watching football. That isn’t money that could have been profit is it?
Maybe…..Instead of Murphy working with the NFL, being on the rules committee, worrying about an 18 game season, maybe his time would have been better spent the last 5 years watching over his Packer Team and taking action as Team President BEFORE years of regression. Just throw’in that out there.
So….yea, Murphy can point to being “aggressive” in free agency. But if he really wanted to know why the Packers didn’t make any money, Murphy simply has to walk in front of a mirror.
“Golly Gee guys…after talking to some people here i just discovered we have silo’s inside this building, no one talks to each other and some don’t even like each other. That’s news to me and i’ve been here 11 years. I guess no one talked to me either and i wasn’t paying attention i guess.” – Your Team President
Murphy would make Sgt. Schultz proud . “I see nothing, I hear nothing, I know nothing.” Those damn silos. The truth is Rogers and McCarthy both raised their voices in public about the lack of veteran free agency procurement, and retaining veterans. McCarthy complained about some of the drafts, mostly after seasons were complete. Rodgers complained about play calling and young player accountability. Murphy didn’t hear. Thompson was working in a daze and was physically having issues. All could see it except “I see nothing”, Murphy. If you don’t hear or see nothing then obviously you know nothing.
I don’t think there were silos as Murphy claimed. The silos were invented by Murphy to try and justify his failure to take appropriate and timely actions as President of the Packers. Murphy created the only silo, a single silo after Gutekunst was hired.
I have high confidence Murphy makes no decisions past, present, or future without the protection of a committee decision. Murphy has always been that way and always will be that way. Murphy needs the cover of a committee, or a silo to try and protect Murphy.
Although i agree 95% with all that you wrote. I do believe there were silo’s, maybe Murphy had a clue about them(which would be even worse), i don’t know. But regardless….under either scenario, at the end of the day, there was blatant negative issue’s of non communication at Packer headquarters and it conveyed under his watch. whether he wants to admit responsibility or not. Non communication is also cause, from the effect of bad relationships. So there were probably more internal relationship issues among employee’s we don’t, and may never know about..
As Team President….he can’t just come out and say, there have been years of silo’s and non communication, and offer that up as an excuse and bear no responsibility. Which is what happened as i didn’t hear him acknowledge any responsibility at all. Years back i commented on things like…..”do these guys even talk to each other?” and “it seems like they don’t communicate at all” along with….”i wouldn’t be surprised if these guys didn’t even talk to each other”. Not blowin my horn at all….i’m just sayin….Such a fuck story this team has become. It was hidden…by the fact the team was winning. But when skilled player acquisition regressed, Rodgers could no longer cover it up all the sins, and hear we are today, waiting for season 3 of “Dead Man Walking”.
I’ve said it before and i’ll say it again….With no Executive NFL experience, Murphy wasn’t/isn’t qualified for his position. I don’t think that can even be argued.
As a Packer fan, Murphy makes my skin crawl. He’s a disease that won’t go away, it just gets worse each year.
You can’t be serious with these comments? Anyone been to titletown recently? Still cranes, still construction going on that costs money. Even if they stopped with what was constructed 2 years ago, it takes more time then that to pay it off. Couple that with increased expenses for players this year (yes the cap number is a fixed amount, actual cash expenditures vary as signing bonuses are averaged over a number of years), and it is pretty obvious how this years numbers don’t look great. As much as I don’t like Murphy, what he says makes perfect sense to anyone with a little business smarts. The Packers are not even close to financial trouble, and over the next 5-10 years profits will skyrocket, with or without an increase in national revenue.
Jodi, must be brand new in here, never seen that name before. It couldn’t be a regular hiding under a new name. No Sir, not in here.
Listen…Jodi….if you read the article (not this one) the original, you’d see i didn’t write anything that wasn’t stated. Matter of fact i copied and pasted 2 sections. What you read in my comments came directly from the article, so your beef is with the AP. Now….you saw some cranes, i get it. And whose cranes were they, whose paying for them, and what were they working on? Yea…it matters. You are correct about taking more than 2 years to get a positive return on investments, but again, the words were from the original article, not i..
Again, when player cost increase, it’s because revenue went up, its directly related. They get that increased money from the NFL without lifting a finger. The NFLPA is the watchdog overseeing all things financial concerning the NFL, for obvious reasons. Each year, for about the last three or four years, teams revenue share has gone up 20 million +/- each season…..if my memory serves me right..
As far as the rest of the comments i made, You didn’t dispute any of those, so i’ll assume you think they are righteous.
Finally someone exposing the salary and FA moves as an excuse. All teams have a salary cap, and no one can spend more than that, and even more so, it is tied to the revenue, which keeps going up.
On a 5-year average, teams cannot spend much less than the salary cap value, and that would not be desirable either, as it would mean the team is not putting a strong effort to field a competitive squad. So you can’t save a lot without looking bad.
Then they will say “oh, we have to increase ticket prices, we are below the league average”. OK… How have you then improved the product? Gotten rid of those ridiculous benches? Their excuse is “oh, but seats take up more space, we can’t fit them instead of the benches”. That’s true for the lower ranks. And how about instead turning season tickets to new ticket holders, they instead blocked them from being annually purchased, and by the time they recoup enough spots, they finally replace frigging benches with actual seats? They don’t even need to sell less tickets until they are ready to start the upgrade. With a turnover rate of about 50 holders a year, that shouldn’t be to many years, it’s only the lowest lying rows. With true seats, the experience will eb better and they can charge something closer to or slightly above the league average.
They didn’t improve the product, they improved “The Experience”.
Show me one other NFL stadium where you can go sledding across the street from the stadium. :)
As far as ticket prices, i really don’t have a big issue with that. But i would say, that the Packers know other teams will raise ticket prices annually, thereby driving up the average. Thus giving the Packers the built in excuse to raise prices, regardless of the product they deliver, or (don’t deliver).
Here’s the problem as i see it in a nutshell. These days our Green Bay Packers number 1 priority is to reach in our pockets and take every dollar of disposable income we have. I can remember back when winning was the priority.
Although the Packers have a fiercely loyal fan base. Much like Harley Davidson, their hardcore fans are getting older. The newer breed of Packer fan (about 40 and under) only knows 2 things…1) HOF QB’s…2) Winning. If this team doesn’t start winning, a good chunk of the new breed of Packer fan will lose interest….and take their wallets with them.
The one way to ensure you have the optimum amount of revenue, is to win. That’s the easiest way to get into your fans bank account. The proof of that is…..what happened after each of the last two Super Bowl wins?….a stock sale, People couldn’t spend their money fast enough. If….i said if…the Packers won another Super Bowl anytime soon. You can bank on a stock sale directly after. But the catch is….i was told you have to get into the playoffs to win a Super Bowl.
It’s this simple, WIN! I spend more cash when GB is winning or at least playing exciting football. Already bought my Savage jersey for this season.
….and there you have it. But it’s easier said than done when you don’t draft well. You finally get into free agency again, but you don’t sign well. Winning starts at the top. Being clueless is not a good start. The Board and Executive Committee might need to wake up also.
It’s all fun and games and everyone eats….when your winning.
Since Murphy “took over” and proclaimed himself large and in charge 2 years ago, this team is 0-2 in the success department.
Yawn…..In other ex Packer player news…..It seems (per 105.7 The Fan) Jeff Janis is now selling tires somewhere…i know, i know.
Can you believe a guy who had combine metrics, Julio Jones like, is selling tires? I am just as shocked as ya’ll are. Who would have thought…..?
I agree with younger packer fans knowing only winning could lead to some major issues if Murphy doesnt get his head out of his ass but really looking jn to it you can paint a more dire picture.
Not only does this age group only know winning..they also have far more entertainment products easily accessible. This isnt just netflix.. this is also the bucks and brewers. Getting to greenbay is a pain in the ass from the economic center of milwaukee and an uberride to see Giannis and yelich is far more cost effective and the product is superior to live football which amounts to being forced to sit there and watch nothing during commercial breaks ever 11 seconds.
Couple this with the 40 under age group having a shrinking real income… and the packers could easily be squeezed to third tier in the future.
Not to mention youth basketball is the number 1 sport in America as it an easily accessible sport and there is rising parental concern over football injuries.
Dont gr me wrong football will be a juggernaut for the foreseeable future…but mark Cuban may have been right and franchises like the packers will be the first to feel the squeeze.
Of all my friends who still live in milwaukee…none of us bother to ever go to packer games even when they are a top team…unless of course it is someone’s dads season tickets or a work comp.
Do we buy merchandise? If you count Christmas gifts I suppose…
That’s a great point. Green Bay is unique as a public team in a relatively small city. Economically, that niche only works these days if you are winning.