Monday was a big day around the NFL, thanks to the small-town Green Bay Packers and their ownership structure. The team announced its overall finances for the 2017 NFL season, as is its obligation as a publicly-held entity — the only such pro sports organization with a public ownership structure in North America.
As a result, fans, economists, and other interested parties in the NFL sphere of influence got a feeling for what the trends are across the league, and trends continue to go upward. According to the breakdown of the numbers in Packersnews.com, the Packers set a record in total revenues, with just under $455 million coming in. However, the Packers’ expenses were also at an all-time high, at just under $430 million.
First, the revenues piece was broken down into national revenue ($256 million in total), and local revenue ($199 million). The former piece of that pie is the revenue-sharing piece that every NFL team across the league receives in equal quantities, while the local revenues are from the team’s ticket and merchandise sales and other operating income. Thus, each NFL team raked in a little over $250 million from the league’s TV and sponsorship contracts, which demonstrates that the league isn’t hurting in the television arena, at least as far as the broadcast incomes are concerned.
What does this mean on its own? First, the revenues continue to set records because the TV contracts continue to increase by five percent each year. However, a look at last year’s report indicates that local revenues are up just slightly. Running the numbers against the team’s 2016 report shows that in that year the team brought in $197.4 million in local revenue, an increase of 0.8% year-over-year. However, it is notable that that slight increase came during a season when the team’s biggest star missed half the season with an injury and the team’s record dropped from 10-6 to 7-9. There will be no way to know how much greater that increase might have been had Aaron Rodgers stayed healthy, but it’s reasonable to think that it would have been a larger number.
While the overall revenue numbers may be notable to NFL fans at large, there were also some nuggets of information that are relevant to Packers fans specifically. First, team President Mark Murphy addressed the team’s revenues relative to other NFL teams, telling Packersnews.com that the team will never sell naming rights to Lambeau Field — something from which most other teams across the league derive significant revenue. In addition, the team expects to continue its investment in the Titletown District, which should continue on its development path.
Additionally, Murphy mentioned player contracts as a reason for the increase in expenses in 2017. The new deals for wide receiver Davante Adams and center Corey Linsley near the end of the season likely contributed to this increase; after all, the two combined for $26 million in signing bonuses, which are of course paid out up front.
If Aaron Rodgers signs a new contract extension this summer, however, expect 2018’s expenses to be higher still, as that deal could feature a signing bonus somewhere in the range of $50 million or more.
All told, the Packers are in good financial shape. They continue to turn a profit every year and are in the upper half of overall revenues in the league despite playing in the league’s smallest market. The numbers will also be discussed further at the team’s Shareholders’ Meeting on July 25th. However, individuals around the NFL probably are watching these numbers with more critical eyes than Packers fans, who should simply remain happy that the hometown team is consistently remaining a profitable and stable operation.