Green Bay Packers Local Revenue Declines $150 Million

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Hey friends,

The NFL’s Green Bay Packers have an ownership structure unlike any other major U.S. professional sports franchise. Rather than being owned by a single wealthy individual, the Packers have existed as a publicly owned nonprofit since 1923.

Today, we’ll look at their unique ownership structure, why other teams haven’t followed their lead, and how COVID-19 has impacted their financials.

How Does It Work?

The Green Bay Packers pride themselves on being the only publicly-owned, not-for-profit, major league professional team in the United States.

Rather than having a single wealthy owner, or multiple partners, the Packers are owned by fans — 360,760 shareholders owning a total of 5,011,558 shares, to be exact. The “articles of incorporation” also prohibit any person from owning more than 200,000 shares, ensuring that no individual can take control of the team.

The story goes like this: In 1923, the Packers found themselves in financial trouble, so they sold shares to local residents to keep the lights on. Since then, the team has held four additional stock offerings in 1935, 1950, 1997, and 2011.

The Packers sold shares in both the US and Canada in 2011, with all proceeds from the offering supporting the expansion of Lambeau Field. The project cost $146 million and included a new audio sound system, two new HD video boards, and approximately 7,000 additional seats in the south end zone.

What Do Shareholders Get?

Essentially, nothing. Packers shareholders are able to “vote on Green Bay’s board of directors and a seven-member executive committee that represents the team at league meetings.” However, shareholders “have no real say in team decisions, football or otherwise.”

Fans looking to make a profit will have to look elsewhere. The Packers stock pays no dividend and isn’t tradeable or able to be sold. The last time a sale was conducted, in 2011, a single stock went for $250, which bought shareholders a souvenir certificate to hang up on the wall, a chance to buy shareholders-only merchandise, and an invite to Lambeau Field to attend the annual shareholders meeting during training camp.

The point being, buying shares in the Green Bay Packers is more similar to a fan club initiation fee than it is to an investable asset.

Fun Fact: An original 1923 Green Bay Packers stock certificate purchased for $5 in 1923 sold for more than $10,000 last year.

Why aren’t other NFL teams publicly owned? In 1960, the NFL implemented the “Green Bay Rule,” which states that “charitable organizations and/or corporations not organized for profit and not now a member of the league may not hold membership in the National Football League.”

In simple terms, the Packers were grandfathered in as the NFL’s sole publicly owned team.

Show Me The Money

As the only NFL team to release an annual report, the Green Bay Packers are typically used as a proxy to determine the overall financial health of all NFL franchises.

This year, the numbers told an interesting story. National revenue — the amount that each team receives from the league primarily through its multi-billion-dollar TV contracts — was great. Since all games were played, the result was a record $309 million payout per team.

That means the NFL distributed almost $10 billion overall to its 32 franchises.

Packers National Revenue

• 2014: $209 million

• 2015: $223 million

• 2016: $244 million

• 2017: $256 million

• 2018: $274 million

• 2019: $296 million

• 2020: $309 million (+4.5% YoY)

But local revenue — ticket sales, sponsorships, game-day income, merchandise sales, etc. — told a completely different story due to COVID-19.

Packers Local Revenue

• 2014: $168 million

• 2015: $186 million

• 2016: $197 million

• 2017: $199 million

• 2018: $204 million

• 2019: $211 million

• 2020: $62 million (-70% YoY)

That $150 million drop in local revenue led the Packers to an operating loss of $38.8 million, which marks the first time in more than 20 years that the NFL’s smallest market team failed to turn an operating profit.

“This was a very challenging year,” says team president Mark Murphy.

The interesting part? Despite posting an operating loss of $38.8 million, the Packers overall net income was still $60 million in the black. How? Because of $120 million in “mostly unrealized investment gains.”

In the end, each NFL franchise will be different. The Packers had limited fans for their final four home games, plus 2 playoff games. Some teams had more, while others had less, reflecting in different local revenue figures throughout the league.

Still, with the NFL distributing nearly $10 billion to its 32 franchises, as long as stadiums can return to normal this fall, the NFL appears to be expanding its reputation as an aggressive & expanding juggernaut.

Have a great day, and I’ll talk to everyone tomorrow.

You can read the Green Bay Packers full report here.

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