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<blockquote data-quote="HardRightEdge" data-source="post: 866232"><p>None of the estimates available suggest the owners are "making billions", far from it.</p><p></p><p>The one professional sports team for which we have actual numbers is the Packers. Forbes estimates from Sept. 2019 have the Packers ranked as the 13th. most valuable franchise with a valuation of $2.85 billion with annual operating income of $39 million, 4th. lowest in the league. This suggests that Forbes may be overstating the profitability of other franchises.</p><p></p><p><a href="https://www.forbes.com/sites/mikeozanian/2019/09/04/the-nfls-most-valuable-teams-2019-cowboys-lead-league-at-55-billion/#ba302e62f1bb" target="_blank">https://www.forbes.com/sites/mikeozanian/2019/09/04/the-nfls-most-valuable-teams-2019-cowboys-lead-league-at-55-billion/#ba302e62f1bb</a></p><p></p><p>In point of fact, the Packers reported operating income of $8.4 mil and net profit of $724,000 for fiscal 2019. The prior year showed a profit of $34.1 mil and $75 mil in 2017. Forbes profit figure for the Packers appears to be an averaging over multiple years. What they put down for the other teams is guess work.</p><p></p><p>The Packers reported that the near zero net for 2019 was the result of unusual expenses. Rodgers 2018 signing bonus payouts along with 2019's free agent signing bonus splurge, which evidently fell in part or in whole in the same fiscal year, have been reported as one cause. I suspect that's the primary cause. McCarthy's and other coaching staff contract guarantee hangovers are also mentioned.</p><p></p><p><a href="https://www.packers.com/news/packers-profits-fall-due-to-unusual-set-of-expenses" target="_blank">https://www.packers.com/news/packers-profits-fall-due-to-unusual-set-of-expenses</a></p><p></p><p>For 2019, national revenue went up 7.2%; Packer local revenue was up around 2.3% which in total comes in a little under the 6% bump in the salary cap.</p><p></p><p>Now, is there something about the Packers expenses, with profit averaging under a 10% net margin which ain't all that great compared to $90 billion market cap companies in the S&P 500 (if that's what the NFL franchises in the aggregate are really worth according to Forbes)?</p><p></p><p>Not really. The only thing in particular I would point to is that given cap rollover has been in place since 2011, and the cap rollover this season is about $5 mil, over the 9 years the Packers have underspent the cap by only about $500,000 per year. Some teams, like Oakland and Cleveland, chronically spent under the cap. I did read in passing some consideration of raising the minimum cap spend in the new CBA but I don't know if that was in fact included in the agreement the players reps voted through. That would be an enhancement over the cap bump from 47% to 48% of revenue.</p><p></p><p>You have to consider all the other expenses that go into running an NFL franchise. Start with non-player payroll and benefits. There are the coaches salaries and then all of these people where the list goes on and on:</p><p></p><p><a href="https://www.packers.com/team/front-office-roster/" target="_blank">https://www.packers.com/team/front-office-roster/</a></p><p></p><p>You have player benefits not included in the cap, stadium and facilities maintenance and improvements, staduim lease payments, debt service, utilities, and on and on, all common to pro sports franchises. While the Packers are a not-for-profit corporation, they are not tax exempt. So add income taxes into the mix as with any franchise.</p><p></p><p>I have no doubt that Dallas, New England, Washington and probabaly the LA teams and maybe Vegas with their new pleasure palace coming on line, are or will be quite profitable. The middle 3rd. are probably decent if not exceptional investments. The bottom 3rd. are probably poor investments.</p><p></p><p>So if most of these teams are not terrific investments (it's worse in MLB), why the clamor among billionaires to own them? Well, I wouldn't underestimate the hobby factor. Once they have all the houses and cars and jets and private schools and designer clothes and jewelry, owning a sports franchise would be the next thing on the list for some to gain some "marginal happiness". They can entertain friends and business associates in the skybox and lord over them their ownership of a centerpeice of American culture. Some of these guys might be ex-jocks who enjoy the vicarious thrill, like they are part of the team. Others prefer fine art or they collect more estates or buy ever bigger jets. That of course does not mean they have outsized profits to share with their employees. It's still a business venture despite all that. Jimmy and Bob might be making outsized profits, but the bulk of the league is not.</p></blockquote><p></p>
[QUOTE="HardRightEdge, post: 866232"] None of the estimates available suggest the owners are "making billions", far from it. The one professional sports team for which we have actual numbers is the Packers. Forbes estimates from Sept. 2019 have the Packers ranked as the 13th. most valuable franchise with a valuation of $2.85 billion with annual operating income of $39 million, 4th. lowest in the league. This suggests that Forbes may be overstating the profitability of other franchises. [URL]https://www.forbes.com/sites/mikeozanian/2019/09/04/the-nfls-most-valuable-teams-2019-cowboys-lead-league-at-55-billion/#ba302e62f1bb[/URL] In point of fact, the Packers reported operating income of $8.4 mil and net profit of $724,000 for fiscal 2019. The prior year showed a profit of $34.1 mil and $75 mil in 2017. Forbes profit figure for the Packers appears to be an averaging over multiple years. What they put down for the other teams is guess work. The Packers reported that the near zero net for 2019 was the result of unusual expenses. Rodgers 2018 signing bonus payouts along with 2019's free agent signing bonus splurge, which evidently fell in part or in whole in the same fiscal year, have been reported as one cause. I suspect that's the primary cause. McCarthy's and other coaching staff contract guarantee hangovers are also mentioned. [URL]https://www.packers.com/news/packers-profits-fall-due-to-unusual-set-of-expenses[/URL] For 2019, national revenue went up 7.2%; Packer local revenue was up around 2.3% which in total comes in a little under the 6% bump in the salary cap. Now, is there something about the Packers expenses, with profit averaging under a 10% net margin which ain't all that great compared to $90 billion market cap companies in the S&P 500 (if that's what the NFL franchises in the aggregate are really worth according to Forbes)? Not really. The only thing in particular I would point to is that given cap rollover has been in place since 2011, and the cap rollover this season is about $5 mil, over the 9 years the Packers have underspent the cap by only about $500,000 per year. Some teams, like Oakland and Cleveland, chronically spent under the cap. I did read in passing some consideration of raising the minimum cap spend in the new CBA but I don't know if that was in fact included in the agreement the players reps voted through. That would be an enhancement over the cap bump from 47% to 48% of revenue. You have to consider all the other expenses that go into running an NFL franchise. Start with non-player payroll and benefits. There are the coaches salaries and then all of these people where the list goes on and on: [URL]https://www.packers.com/team/front-office-roster/[/URL] You have player benefits not included in the cap, stadium and facilities maintenance and improvements, staduim lease payments, debt service, utilities, and on and on, all common to pro sports franchises. While the Packers are a not-for-profit corporation, they are not tax exempt. So add income taxes into the mix as with any franchise. I have no doubt that Dallas, New England, Washington and probabaly the LA teams and maybe Vegas with their new pleasure palace coming on line, are or will be quite profitable. The middle 3rd. are probably decent if not exceptional investments. The bottom 3rd. are probably poor investments. So if most of these teams are not terrific investments (it's worse in MLB), why the clamor among billionaires to own them? Well, I wouldn't underestimate the hobby factor. Once they have all the houses and cars and jets and private schools and designer clothes and jewelry, owning a sports franchise would be the next thing on the list for some to gain some "marginal happiness". They can entertain friends and business associates in the skybox and lord over them their ownership of a centerpeice of American culture. Some of these guys might be ex-jocks who enjoy the vicarious thrill, like they are part of the team. Others prefer fine art or they collect more estates or buy ever bigger jets. That of course does not mean they have outsized profits to share with their employees. It's still a business venture despite all that. Jimmy and Bob might be making outsized profits, but the bulk of the league is not. [/QUOTE]
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