This week saw the long-awaited release of the Green Bay Packers' financial report for the preceding fiscal year, a report sure to draw a lot attention and interest in the ongoing labor dispute between the NFL and the NFL Players Association.
In my nine years with the Packers, I remember the release of the annual report well. As our profit was reported for all to see, I would count the minutes until the calls came in from agents advising on how I could spend some of that profit.
Teaching tool
The Packer financials would also be part of an annual NFL program for young executives at Stanford. I would go there -- my alma mater -- to lecture on the Cap and also watched sessions analyzing -- what else -- the Packers financial report (I couldn't shake it).
Bigger meaning
In the ongoing labor negotiations, the NFL wants the players to share more risk on things like stadium construction, team travel and even practice facility and training costs, arguing the CBA extension of 2006 -- ratified by a 30-2 vote -- is too rich for the players and a rollback is needed. The response from the union, of course, has been "Show us your books" to which the NFL says no. Now one team's books -- the publicly owned Packers - will be shown, and the union waits.
The former Executive Director of the NFLPA, the late Gene Upshaw, used treat the Packer financials like the Magna Carta, saying that if tiny Green Bay -- the smallest NFL market -- could show profit, imagine how well rest of the league fares?
I would tell Gene that he was technically correct but that Packer nation is unique. Not to underestimate other passionate fan bases, it was rare to find a following as ardent as the Packers. I knew this from the first moment I stepped off the plane and saw half the people wearing Packer gear; from looking for a home and finding "Packer shrine rooms" common; from being asked by strangers how negotiations were going with players, etc. I told Gene that the Packers were a national treasure that was hard to replicate.
The numbers
The union will surely note the fact that the Packers had its highest gross revenue ever, $258 million, during a challenging environment for new revenue streams. It will also note an increase in net profit from the prior year, up to $5.2 million from $4 million, at a time where ownership is pleading that operational costs are too high.
The NFL will focus of the part of the report showing player costs (player pay plus benefits) rising more than 11% compared to a 5% increase in total revenues. This dovetails nicely with the league position that player costs are outpacing revenues.
Exhibit A for Commissioner
And in another twist to this bargaining year, Commissioner Goodell will be attending the Packer annual report to its shareholders on July 29, a festive event for thousands of "owners" to descend on Lambeau field to hear reports on the team. Goodell's presence is strategic in the bargaining context, standing in front of the shareholders of the most passionate fan base in the NFL while bemoaning the financial situation of the team and its partners.
The Packers will likely fall in line with the league today in discussing its challenging financial environment in light of a player-friendly CBA. The union will be skeptical and ask for the rest of the teams to show the same, and we will be back to where we started.
At least agents won't be calling with ways for the team to spend its profit.