Packers' financial picture still green and golden
Mark Murphy doesn’t think much about it, too busy with the Green Bay Packers’ day-to-day operations to sit back and contemplate how much has changed at the corner of Lombardi Avenue and Oneida Street over the years.
In 1983, Murphy was a safety for the Washington Redskins when they lost to the Packers, 48-47 – “Not a good night to be a defensive back,” Murphy said with a laugh Thursday – in the highest-scoring game in Monday Night Football history.
Back then, of course, the Lambeau Field that the Redskins’ team bus pulled into was built of green corrugated metal. It wasn’t until two decades later – in a 2003 redevelopment project led by his predecessor as Packers president/CEO, Bob Harlan – that the stadium transformed into a brick and wrought iron Taj Mahal. And now, another decade later, the team is finishing up a two-part expansion and renovation that came with a $312 million total price tag.
Green Bay might be the smallest market in American professional sports, but life couldn’t be better for the 94-year-old franchise.
In fact, things are so good on the Packers’ balance sheet these days, even a 41.3 percent drop in net income isn’t cause for alarm. And that’s in large part due to the renovation project that saved the franchise and paved the way for the latest expansion – and the growth to come beyond the stadium itself.
“The 2003 renovation was really transformative,” Murphy said during a meeting with reporters on the fourth floor of Lambeau Field Thursday to discuss the team’s finances. “It was necessary and really needed on so many different levels, and because of that and the success of that, that’s put us in a position financially where we can make the investments that we are.”
The franchise posted a record $324.1 million in total revenue during the 2013-’14 fiscal year ending March 31, but player costs – primarily the hefty contract extensions signed by stars Aaron Rodgers and Clay Matthews in April 2013 – reduced the team’s bottom line from $43.1 million in net income in the previous fiscal year to $25.3 million this past year, a drop of $17.8 million.
So the team still made plenty of money – just not as much as last year.
Player costs were the primary reason for decreased profits, as first-year payouts to Rodgers, who signed a five-year, $110 million extension, and Matthews, who signed a five-year, $66 million deal, raised that line item from $136 million in the previous fiscal year to $171 million last year. The player costs were the highest in team history, director of public affairs Aaron Popkey confirmed, although they are expected to drop in this fiscal year with fewer big-name players in line for contracts.
The $146 million south end zone expansion, which added nearly 7,000 seats and came on line last season, also contributed to the increase in expenses, as $8 million in depreciation was absorbed onto the books for its first year in operation.
Nevertheless, total revenues were still up, continuing a streak that began in 2003, when the redeveloped Lambeau Field opened. National revenue, which comes from sharing of the TV contract revenue and licensing deals, was $187.7 million, up $7.8 million, and local revenue from stadium operations was $136.4 million, up $8.2 million. The team also added $30 million to its reserve fund, which now stands at an astonishing $284 million.
Meanwhile, construction projects continue. The new Harlan Plaza opened earlier this week, and the team’s new pro shop will open next week. The renovation of the Packers Hall of Fame and Curly’s Pub restaurant are ongoing and won’t be completed until next spring, but those are the final in-stadium projects the team has planned for the near future.
Murphy made it clear that the team has no plans to expand the stadium itself further – capacity is currently 80,750 – but didn’t rule out long-term changes like replacing the Don Hutson Center, which sits across the street from Lambeau and serves as the team’s indoor practice facility. The team’s new in-house practice facility, the CRIC (Conditioning, Rehabilitation and Instructional Center), opened in November and has a smaller indoor field. It was designed so a full-size indoor practice facility could be built adjacent to it, Murphy said, if Brown County officials ever wanted to redevelop the Resch Center/Brown County Arena area.
“If the county wanted to do something differently with the Hutson Center, or when the Hutson Center reaches a date in time where it needs to be replaced or doesn’t function, we planned the CRIC in a way that we could build an entire indoor facility adjacent to it. So, we could expand it,” Murphy said.
“Our goal is to give (general manager) Ted [Thompson] and everybody in football the resources to be competitive, and I can say with great confidence that that’s not an issue at all. We give them everything they need. It’s not only salaries, you look at football facilities, to be able to invest the way we did last year, I think we’ve always had good facilities, but the changes we made and the improvements and new facilities ensure that we’ll stay in the upper tier of the league.”
So what’s next? The club has bought up most of the land west of the stadium to U.S. Hwy. 41 with long-term plans to build the Titletown District, a multi-use entertainment, shopping, dining and community area which began with the opening of a Cabela’s sporting goods store last summer. While Murphy wouldn’t divulge specifics of any further plans, the recent decision by K-Mart to close its store on Lombardi Avenue – on land the Packers already own – opens up some possibilities, Murphy said.
“I think over the next seven years we’re going to be able to continue to invest in the stadium and the areas around the stadium. We’ve started things in and around the stadium that we think will be improvements that will really help the organization, the fan experience and the local community,” Murphy said. “To the west, we have – it really started before I got here – purchased a lot of land along Lombardi Avenue. That is part of our plan for Titletown. So we’ve looked at a number of different options there.”
Asked if he had any specific goals for the Titletown District in the near future, Murphy replied, “I’d hate to say we want to do this by then. We’re studying it, we’re looking at different options.”
The team has also bought up land to the south of the stadium, which in the short term will be used for parking and long-term could be where a new indoor practice facility could be built.
For now, though, the one-time green corrugated metal stadium never looked better, while things look wonderful on the field and on the balance sheet, too.
“I think for us, particularly with the stadium having been built in 1957, the fact that we continue to invest in it just from a maintenance standpoint. … You go around the league, I go to some stadiums that were built 10, 15 years ago that look older than Lambeau,” Murphy said. “I think it’s a source of pride for all of us that Lambeau Field is continuing to thrive and hopefully we’re making additions that improve it and really help ensure that it continues to last well into the future.”
Listen to Jason Wilde every weekday from 9 a.m. to 10 a.m. on “Green & Gold Today” on 540 ESPN, and follow him on Twitter at twitter.com/jasonjwilde.