1. Welcome to Green Bay Packers NFL Football Forum & Community!

    Packer Forum is one of the largest online communities for the Green Bay Packers. You are currently viewing our community forums as a guest user.

    Sign Up or

    Having an account grants you additional privileges, such as creating and participating in discussions. Furthermore, we hide most of the ads once you register as a member!
    Dismiss Notice

Packers post record net income of $48.9 million

Discussion in 'Packer Fan Forum' started by captainWIMM, Jun 24, 2016.

  1. captainWIMM

    captainWIMM Cheesehead

    Joined:
    Jul 23, 2012
    Messages:
    12,598
    Ratings:
    +6,592
    The team was able to increase local revenue, which it doesn't have to share with other franchises, by nearly 11 percent to $186.2 million.

    http://pckrs.com/wc93
     
    • Informative Informative x 1
  2. weeds

    weeds Cheesehead

    Joined:
    Dec 9, 2004
    Messages:
    2,376
    Ratings:
    +1,230
    This is what Bob Harlan envisioned when he championed the original Lambeau renovation. It's not "nice" that the Pack can generate this type of net income -- it is essential for the survival of the Green Bay Packers. Thank god for that foresight...and for the guys who still push that income wagon.
     
    • Like Like x 3
  3. El Guapo

    El Guapo Cheesehead

    Joined:
    Dec 7, 2011
    Messages:
    3,518
    Ratings:
    +1,990
    The Packers are the barometer for the rest of the league, being the only team that discloses financial information. I assume that we are in the top third of teams in terms of NOI, mostly due to our consistent sell-outs and strong merchandise sales. None of the teams actually lose money consistently, so they are all somewhere in this spectrum of positive profits. What bugs me is that over 30 years (the current average stadium lifespan in the NFL), teams can't set aside more of this profit for new stadiums. What really needs to happen is that lawmakers need to sit down with the NFL and NFLPA to negotiate how salaries and profits are distributed so that teams can pay for their own stadiums without taxing Joe Smith.

    I bought a share of Packers stock in 2011 to put my money where my mouth was about tax-payer funded stadiums. I wanted to support the renovation for my team. Teams should either fund their own stadiums or raise private capital.

    Off my soapbox.
     
  4. captainWIMM

    captainWIMM Cheesehead

    Joined:
    Jul 23, 2012
    Messages:
    12,598
    Ratings:
    +6,592
    The Packers were ranked ninth in total revenue in each of the last three years so most teams in the NFL don't make as much profit as Green Bay.

    I agree that teams should pay for their own stadiums though but taking a look at the price tag of some of the new fancy ones I don't see that happening.
     
    Last edited: Jun 28, 2016
  5. El Guapo

    El Guapo Cheesehead

    Joined:
    Dec 7, 2011
    Messages:
    3,518
    Ratings:
    +1,990
    Good to see that you agree with me.

    It can happen. All it takes is public will and political fortitude - two things that don't currently exist but are possible.
     
  6. sschind

    sschind Cheesehead

    Joined:
    Oct 5, 2014
    Messages:
    997
    Ratings:
    +498

    I asked my buddy Joe Smith about this and he agrees with you 100%. His brother John said "what do I care Its Joe's problem not mine"

    So you are an owner. If, during the next Lambeau renovation, they said "we are not going to implement a sales tax on the community, instead we are going to ask each owner to kick in 100 bucks" would you support that? After all, that's the biggest beef about publicly funded stadiums, the owners are the ones that should pony up.
     
  7. El Guapo

    El Guapo Cheesehead

    Joined:
    Dec 7, 2011
    Messages:
    3,518
    Ratings:
    +1,990
    I already did kick in several hundred bucks, and would consider it again if asked. That said, I think that the teams should pay 100%. They have the wherewithal. That's not in dispute. They just prefer to pay it out in player salaries and owner's compensation because nobody forces them to save for a new house.
     
  8. captainWIMM

    captainWIMM Cheesehead

    Joined:
    Jul 23, 2012
    Messages:
    12,598
    Ratings:
    +6,592
    The Packers have a corporate reserve currently at $275 million which is primarily used to upgrade Lambeau Field.
     
  9. El Guapo

    El Guapo Cheesehead

    Joined:
    Dec 7, 2011
    Messages:
    3,518
    Ratings:
    +1,990
    I think that you realize that I'm talking about the majority of the league.
     
    • Agree Agree x 1
  10. PikeBadger

    PikeBadger Cheesehead

    Joined:
    Jan 19, 2013
    Messages:
    1,382
    Ratings:
    +453
    Actually yes I would and I would consider kicking in 200 to make up for one stock holder that doesn't support the idea.
     
  11. Half Empty

    Half Empty Cheesehead

    Joined:
    Oct 29, 2014
    Messages:
    1,754
    Ratings:
    +661
    As with almost everything else we discuss, I'd say it's a matter of degree. There is some number representing the tax benefits of having the team (e.g., visitors on game day), so having owners completely fund the stadiums isn't fair, either.
     
    • Agree Agree x 1
  12. Croak

    Croak Moderator Staff Member Moderator

    Joined:
    Aug 15, 2010
    Messages:
    5,489
    Ratings:
    +1,973
    Interesting idea. Would it then be possible to do a proportionate cost sharing plan? If the community gets "x" amount of taxes from the team/stadium and that amount is a certain percentage of the total profits, then the community could be expected to contribute a proportionate percentage of the cost?
     
  13. El Guapo

    El Guapo Cheesehead

    Joined:
    Dec 7, 2011
    Messages:
    3,518
    Ratings:
    +1,990
    I've done a lot of tax research on this in the course of my career, and the communities never ever get the payback. Not even close. From a pure dollar value, there are much better ways to spend taxpayer dollars. Having a sports team though is often thought of as a good "community" investment, bringing citizens together. Only small communities such as Green Bay come close to benefiting because so many of the fans come from outside of the county.

    At the very least, the proportion should be limited to public infrastructure improvements (roads, sewers, parking, etc.) which is a more typical relationship that you would have between a private developer and a city.
     
    • Agree Agree x 1
  14. Cheese Meister

    Cheese Meister Cheesehead

    Joined:
    Jan 19, 2013
    Messages:
    67
    Ratings:
    +21
    Unfortunately, that did not work here in the Twin Cities. Ziggy Wilf threatened to move the Vikings to LA, and the Mpls city council blinked. All the income from Super Bowls will not make up for that price tag. And, of course, the taxpayers are left with the bill.
     
  15. HardRightEdge

    HardRightEdge Cheesehead

    Joined:
    Jul 28, 2012
    Messages:
    7,754
    Ratings:
    +3,695
    A couple of points:

    - So long as teams have options, a municipality/state that balks at contributing to stadium construction will lead a team to seek a deal in another location. Current options would include a second Los Angeles team, Las Vegas, Toronto, St. Louis (if there is seller's remorse), San Antonio (though Jerry Jones would seek to block it), and the eventual European expansion with London first on the list. Simply saying "no" to funding a staduium is a decision to no longer be an NFL city (inelegantly call it NFLexit if you will) until all viable markets are saturated.

    This factor does not, of course, apply to the Packers since the corporate charter prevents the team from moving, or at least presents a unique impediment in the form of a protracted and costly litigation to break the charter if team management went in that direction at some far distant date.

    - While many studies indicate that stadium construction in general at public expense is a net negative economically, it is difficult to fully embrace those conclusions since the counterfactual cannot be proven. There is certainly the element of a local zero sum game, "stealing from Peter to pay Paul", within the local economy, with taxation and higher ticket prices depleting local personal discretionary funds that would spent in other ways.

    - Given the above point, the zero sum game has an offset if the stadium draws discretionary spending from outside the governmental entity that funds the stadium, as you suggest. This is the Packer experiment, and it is a speculation. The stadium improvements and expansions serve to provide a base for fashioning a tourist destination around the stadium, as we all know, in the hopes that a virtuous circle will develop.

    So far, the stadium improvements (together with winning) have generated substantial gains in the team's free cash flow, which is the relevant number, not revenue or earnings.

    Rather than saving up that money for someday building a new stadium, by one estimate the Packers have committed $120 - $130 million, and their leasees having committed $60 million so far, in phase 1 in developing the lodging/dining/entertainment district around the stadium. The question remains as to what degree the spending in this stadium district will cannibalize current spending elsewhere in the community vs. the amount of increase in out-of-area spending. Much of this depends on whether the district becomes a destination for outside spending on other than game weeks.

    My chief skepticism with regard to these efforts is less about whether local GDP growth materializes and more about the quality of jobs created. Once the temporary construction jobs come and go, the job gains fall to the hospitality industry which are notoriously low-paying. It is no secret that many of these jobs in other communities fall to immigrants, whether self-imported or imported corporately. That's not to say I have any objections to giving jobs to immigrants that existing residents won't take. Quite the contrary. It's just not the outcome the locals expected they were paying for and are often promised.

    All this we already know or should know.

    - Your contention that this approach is unique to a small market is questionable. To take just two examples, the Indy dome and LA Forum, investments surrounding these stadiums are measured in $billions in an effort to create a destination drawing outside spending. Indy's "business model" was to create the national capital for amateur athletics. I'll leave others to study whether these propositions are working. Regardless, communities large and small pursue and compete for these opportunities.

    - Your contention that "the proportion should be limited to public infrastructure improvements (roads, sewers, parking, etc.) which is a more typical relationship that you would have between a private developer and a city" does not quite reflect realities.

    You'd be hard pressed to find a state or metro area of any size that does not have an economic/industrial incentive program that goes beyond infrastructure. Among the many kinds of incentives offered, tax breaks are quite popular.

    Among the many thousands of these deals in place, both large and small, I'll mention a couple of high profile deals from communities in which I've lived.

    In the early 2000's Boeing went city-shopping in planning the move of their headquarters from Seattle. There was serious interest from several cities with Boeing settling on the Chicago offer, which included $60 million in tax breaks over 20 years. In exchange, Chicago got 500 jobs, paying in excess of $1 million per job. Clearly Chicago thought they were buying a "prestige affect" landing a Fortune 500 headquarters. How you measure the economic knock-on affects of "prestige" is anybody's guess. At least there were quite a few high paying jobs out of the 500, if that's a sufficient consolation.

    In a development that mirrors the Lambeau investment, the state of New York made a $750 million commitment (out of the projected $1 billion cost) to the construction of the Solar City factory in Buffalo. New York will own the factory (just as the city of Green Bay owns Lambeau) and will be leasing it to Solar City on very favorable terms (just as Green Bay leases the stadium to the Packers on very favorable terms). Solar City initially projected that they will bring 1,500 manufacturing jobs, with the hopes of sourcing ongoing parts and services purchases to local companies that they project will create another 1,500 jobs (just as the Lambeau district is expected to have a knock-on job creation affect facilitated by the stadium improvements).

    Solar City has already cut back their initial hiring to 500 souls, the reasons for which are known, but are outside the scope of this discussion. Suffice it to say, exogenous events have caused promises to go unfulfilled before factory construction has even been completed. Again, however many jobs do get created, there will at least be the consolation they'll be mostly well-paying factory jobs.

    As always, the devil is in the details of any particular incentive deal and whether the projected net positives to the local economy actually materialize. Blanket statements about whether a city should build a stadium or a governmental entity should provide a particular corporate incentive is a ham handed way of looking at it. The proof is in the putting on a case by case basis.

    What's been generally lacking in many of these incentive deals are claw back provisions, whereby metrics are established in advance by which the success of the public investment and the fulfillment of corporate promises are measured. If the metrics are not met, the corporate entity should be bound to give back to some or all of the incentive money. Otherwise, the investment falls somewhere between a-hope-and-a-prayer and wishful thinking, with little space in between.

    In the case of Lambeau and the district, if the end result is a surfeit of chambermaid, dishwasher, janitorial, receptionist, clerical, greeter, etc. low paying jobs, without much else, as a taxpayer I'd expect a claw back from the Packer organization. To reiterate, the public investments in the stadium amount to a quid pro quo...it's puts a ton of money in the pocket of the Packer organization (and money in the pockets of corporate partners or restauranteurs if the district is an economic success for them) with the speculative payback being economic benefits accruing to the populace. Are there any claw back provisions in the public Lambeau funding? I highly doubt it.

    On the other hand, maybe some believe more sh*tty jobs at public expense are better than none. I wouldn't be one of them. In the world of economic development, aiming to build a tourist industry should be among the least appealing options.
     
    Last edited: Jul 4, 2016
    • Agree Agree x 1
  16. weeds

    weeds Cheesehead

    Joined:
    Dec 9, 2004
    Messages:
    2,376
    Ratings:
    +1,230
    Agreed HRE - good "couple of points". ;)

    I don't know whether Harlan's dream extended to the Disneyland type development that we're seeing unfold before our eyes. I also somehow see what is being proposed in the Lambeau district in the form of the restaurants and hotels proposed as not being intended for "the average Joe and the family". I sincerely doubt that I would be part of the preferred demographic at the Kohler hotel. There is a lot of money going into that area ... and it could be argued that the seed money came from tax dollars. In the grand scheme of things, a one-half of one-percent sales tax in Brown County for ... what 15 years? ... put a lot of money into the Packers reserve which has everything to do with their financial success today and, as you said... winning. The two things do indeed go hand in glove.

    Here is an interesting point that was buried in there and immediately caught my attention:
    "The question remains as to what degree the spending in this stadium district will cannibalize current spending elsewhere in the community vs. the amount of increase in out-of-area spending. Much of this depends on whether the district becomes a destination for outside spending on other than game weeks."

    I'm immediately reminded of the Experimental Aircraft Association Fly-in held annually in Oshkosh - about 60 miles south of Green Bay on I-41. If you're not familiar with the E.A.A. Airshow, it is a biggie in the aviation world and pulls give-or-take a half million to three-quarters of a million aviation buffs to Oshkosh. If you've tried to get a hotel room in northeastern and east central Wisconsin, at the end of July...you know what I'm talking about.

    The event is held at Wittman Field in Oshkosh. This airfield sits largely empty and lightly used for all but essentially 3 weeks out of the year, but has two runways that can accommodate the Concorde and Air Force One. In short, this airfield is a publicly funded playground for EAA and as a property tax payer in Winnebago County and the City of Oshkosh, the amount of funding to maintain this monument to excess has not escaped my attention.

    I moved to Oshkosh first in 1979-80 and have lived here off-and-on since then. Continuously since 1993. (Married an Oshkosh girl and made the mistake of moving her back near "Mom". YOUNG GUYS...DON'T EVER DO THAT!!! :whistling: Back in the day, EAA was a sight to behold. Folks from all over the world converging on Oshkosh generated untold millions as they flocked to the downtown area - well, they took over the city to be honest, but talk about GOOD people drawn by this event. At the time, I managed a bar downtown and the economic impact was highly evident in the business district. It was unbelievable AND fantastic.

    Once I graduated from college and set out to points all over the state, I kind of lost touch with the EAA but when we moved back, EVERYTHING had changed. The EAA broadened their offerings on the grounds...restaurants were opened, merchants (beyond aircraft parts) were allowed to set up tents and they began to offer liquor and what-not (it's always the "what-not" that'll get you). Putting a HUGE dent into what "Chamber-type" folks like to call the economic impact of an event. The downtown business people have seen and continue to see dwindling revenues from this event...and me?...well, I can get home from work without being tied up in huge traffic jams for an extra hour. In short, the amount of welfare that the Winnebago County taxpayers toss in the general direction of the EAA frankly doesn't trickle down to anyone but the hospitality industry anymore. It pretty much stays in the pocket of the E.A.A.

    The EAA comparison to the Packer Stadium development might be a bit extreme because as I said, I'm not believing that the likes of The Stadium View or Kroll's will be impacted much because the stuff proposed for that area may or may not be intended for the Game Day experience of those of us who live here. We'll still go gameday and fire up the grill in someone's backyard that we pay $20 to park in. For the sake of illustrating your point though ... I don't see Holmgren Way suffering much really.
     
  17. HardRightEdge

    HardRightEdge Cheesehead

    Joined:
    Jul 28, 2012
    Messages:
    7,754
    Ratings:
    +3,695
    There is no question in my mind that the taxpayers are funding the stadium district, whether or not this is what Harlan envisioned. Probably not. The initial stages were intended to put the franchise on firmer financial footing.

    The relationship between the stadium spending and the stadium district is a straight line:

    stadium expansion/improvements > increased free operating cash flow > stadium district spending

    I question your thesis regarding high end accommodations (Kohler) and other hospitality venues not cannibalizing spending elsewhere especially during game weeks. This implies deep pocketed consumers who would not previously have attended games because of less than top drawer accommodations will suddenly feel compelled to attend. Maybe Surely some. Maybe Kim and Kanye will fly in for a Rams game and make it a "thing". ;) But there are plenty of deep pocketed consumers already attending who will want to upgrade from the lesser and less convenient accommodations they have been using.

    The net benefit to the community really comes down to attracting more visitors on other than game weeks. Even so, whatever increases to local GDP may accrue, the "trickle down" affect to the community at large may be merely more low paying jobs. Whether that's better than doing nothing in terms of economic development via taxpayer funds I could not say.
     
  18. Poppa San

    Poppa San SB I trophy First of four Staff Member Moderator

    Joined:
    Aug 29, 2010
    Messages:
    5,829
    Ratings:
    +1,626
    Let's see, a hotel designed to compete with the better hotels in the valley, a medical clinic that I don't know if it is an expansion or consolidation from other clinics, and a bar and grill relocated from another part of the city. Not many new "support a family" type jobs that would impact the local community much. Two service sector businesses and one medical based. I can't afford to raise my family on the first two and don't have the necessary skills for the third. On gameday weekends, the Kohler hotel will most likely host the opposing team as well as the media people instead of them staying in Appleton or Neenah. If the clinic is truly an expansion, I will grant that would provide quite a few decently paying jobs.
     
  19. Sky King

    Sky King Cheesehead

    Joined:
    Sep 27, 2012
    Messages:
    1,513
    Ratings:
    +951
    After doing a search for articles that evaluate the economic impact that sports teams have on local economies, and there are several very informative ones, I found a common theme throughout: They have very little impact on local economies. As one article from Seattle stated, "It's more like a bunt than a home run."

    This informative article typifies what can be found on the Internet regarding this subject:
    http://news.stanford.edu/2015/07/30/stadium-economics-noll-073015/
     
  20. El Guapo

    El Guapo Cheesehead

    Joined:
    Dec 7, 2011
    Messages:
    3,518
    Ratings:
    +1,990
    HRE - I think that you and I agreed on most of our points. These deals rarely work out in the public's favor. I'm sure that someone will pull out some favorable examples, but politicians are good at cheating voters and businessmen are good at cheating politicians, not vice versa. It's all about how much public money you can get, followed by then rounding out your capital stack with private money and as little owners' equity as possible. The private markets often treat public dollars like equity, so developers and teams dig as hard as they can so that they have as little skin in the game as possible.

    Your point about clawbacks is 100% spot on. Deals need to be defined, measured, and to contain the ability to recover funds. It's easier said than done because the politicians typically don't have the business acumen to cut effective deals.

    Oh well, I'm going back to the football discussions!
     

Share This Page