Coaches, free agents and concussion settlement drove higher expenses last year for Green Bay Packers.
The Green Bay Packers handled record amounts of money last year, both coming in the door and going out.
The NFL's smallest-market team, and the only one that reports its finances, said it had a record $477.9 million in revenue and a $477.2 million in expenses during the fiscal year that ended March 31.
"For the long term, we are in a strong, stable financial position," said Packers President and CEO Mark Murphy. "It was a unique year. We did have some atypical expenses. I don't see any of these as long-term issues."
Those atypical expenses, which contributed to a $56 million year-to-year increase, included free agent signings, coaching staff changes, payments to a league-wide concussion settlement, and costs of the Packers' 100 Seasons celebration.
The team reported net income of $8.4 million, compared to $38.6 million the year before. Profit from operations was $724,000, compared to $34.1 million the previous year.
Total revenue, rather than net income, is the more significant number in Packers' finances because all money, whether profit or not, goes into team operations or the community. Net income, however, does show how well the team keeps expenses under control.
As always, national revenue was a significant income source for the Packers, providing more than enough to cover player expenses. National revenue includes TV deals, road-game revenue sharing and other income, such as NFL media operations, and is distributed equally to all NFL teams.
National revenue for the year was $274.3 million, an $18.4 million increase from the year before. Packers player costs were $242 million, a $30 million increase, $10 million of which was attributed to an increase in the salary cap.
"We have the resources available to put into our football operations to make sure we can continue to compete for Super Bowls and championships," Murphy said.
Local income was $203.7 million, a $4.7 million increase. Murphy said there was a sense that missing the playoffs two years in a row cut into Lambeau Field Atrium revenue in the form of reduced Packers Pro Shop sales, Packers Hall of Fame visits and visitor spending, but it is difficult to attribute all of that to on-field performance. It is easier to see the impact in the other direction.
"When we were going to the Super Bowl or winning a playoff game or two, that was a spike," he said.
Local revenue includes game-day revenue, local broadcast fees, sponsorships and Lambeau Field Atrium-business income. The latter includes the Packers Pro Shop, Packers Hall of Fame, stadium tours, 1919 Kitchen & Tap and atrium rentals for such things as conventions, meetings and weddings.
The Packers invested $370 million during the last eight years in Lambeau Field expansion and renovation. The team will continue to renovate concourses during the next two to three years, adding more grab-and-go concession stands among other improvements.
Murphy said the Titletown District west of Lambeau field is too new to contribute to profit, but it is developing as expected.
"Titletown is really a long-term investment, and this is at the very beginning of it. At this point, our expenses are well ahead of our revenue," he said. "Over the long-term, we expect to have a responsible rate of return."
The 45-acre Titletown District includes a 10-acre public park and plaza with outdoor games and fitness activities; a winter skating rink and tubing hill located at Ariens Hill; the four-diamond Lodge Kohler hotel; Bellin Health Titletown Sports Medicine & Orthopedics Clinic; Hinterland Restaurant and Brewery; and TitletownTech, a partnership with Microsoft offering digital innovations and expertise to northeastern Wisconsin through an innovation lab, venture studio and venture fund.
Phase two includes townhouses, apartments and an office building. Site work began in June.
"We are almost two years into Titletown and it's really having the impact we had hoped," Murphy said. "All of our tenants have had successful first years."
Murphy said about $170 million has been invested in Titletown to date.
"It's tremendous for economic development in the community, and also diversifies our investment portfolio," he said. "I think it's very positive for our football team .... being able to bring in some of our potential free agent signees and have them see something like Titletown is very positive. I see our players there all the time with their kids."
The team's corporate reserve is $390 million, up $10 million from a year ago. Most of the recent growth the result of investment gains.
For the fifth consecutive year, the team contributed $5 million to the Packers Foundation, whose endowment will reach $42 million. The foundation awarded $750,000 in impact grants to Brown County nonprofit organizations on Thursday and will award its first Milwaukee-area impact grants next week.
The team said its total charitable impact exceeded $8 million last year.
The Packers are the only fan-owned team in the NFL and the only team to publicly report its finances. The report is the best public information available on the financial aspects of an NFL team.
The Packers have 361,169 shareholders representing 5,009,562 shares. Shares are not traded and are rarely sold. The sale was in 2011-12 to help pay for south end zone expansion. No new sale is contemplated.
The annual shareholders meeting is scheduled for 11 a.m. July 24 at Lambeau Field.