It is, as always, good to be an NFL team owner.
Last season, league-level media rights and sponsorship deals enabled the NFL to distribute a total $14.5B to its teams, or $453.2M per club. That’s an increase of 4.8% over the prior season.
The league distribution was disclosed in the Packers’ annual financial results Friday. But though Packers President and CEO Ed Policy projected strength, highlighting that his team’s net income was up 55% to $132.5M on total revenue of $753M last season, he also stressed that the Packers are at risk of falling behind their competition.
Rising player costs caused the team to take a small $1.1M operating loss last year, its first in a season not affected by COVID since 1989. And as Policy told SBJ earlier this year, the Packers’ nonprofit structure prevents it from cashing in on the NFL’s influx of private equity and other deep-pocketed investors.
Policy pointed to the Dolphins selling a 1% stake to billionaire Lin Bin at a record $12.5B valuation earlier this year.
“They were able to raise $125M by selling just 1% of the team,” Policy told a group of reporters Friday. “It’s like other teams have access to this ATM machine that we just don’t have.”
In response, he expects the Packers will be “aggressive” with new revenue generation efforts. Those will include:
- Hosting more non-Packers events like concerts and college football games, including next month’s season opener between Notre Dame and Wisconsin.
- A more aggressive sponsorship strategy; Policy said the team won’t sell naming rights for Lambeau Field, but it’s eyeing other potential assets, like the recent Titletown field entitlement from Emplify Health.
- Higher ticket prices, though Policy said the Packers will strive to keep the average ticket price around the middle of the league.
The Packers’ local revenue, which includes ticket sales, sponsorships and retail sales, climbed 4.7% to $299.8M last season despite Green Bay hosting one fewer home game than the prior year.
The team’s operating loss was driven by a $130M increase in player spending. Total expenses were up $119M, or 19%, to $754M. Policy said decreased spending in other areas offset the rise in payroll. Total player costs will be just over $447M this year. Packers CFO Maureen Smith shared that depreciation from stadium capital improvements is also contributing to rising costs.
On a net basis, the Packers had a strong year thanks to non-operating income of $133.6M, up from just $2M last year. Policy said the increase could be attributed to investment gains from the team’s corporate reserve fund and its stake in ESPN through the NFL’s 32 Equity.
NFL’s deal with Disney, which won this year’s Sports Business Award for Deal of the Year, granted the league a 10% stake in ESPN. Proceeds from that position are recorded within the Packers’ $133.6M non-operating segment, but Policy would not provide further detail.
Policy noted the team’s corporate reserve fund is now at $701M, up from $579M last year, and he stressed the fund’s importance to the Packers’ future.
“It’s really important to keep in mind that it took us over 30 years to raise that amount of money,” Policy said. “Other teams can sell 5% or 10% of their equity, not give up any control, and they can raise more than that in just a matter of months. So growth in the corporate reserve is going to continue to be really important for our long-term health.”
