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The Power Of The Packers

This article is more than 10 years old.

t's a sticky late-July morning in Green Bay, and fans of the city's champion football team have already fired up their portable grills. As traffic logjams on Lombardi Avenue, hundreds of Cheeseheads mill around the Lambeau Field parking lot, chomping on Johnsonville brats and swigging Leinenkugels. It'll be another 58 hours before any Packer players show up, but that doesn't matter. These fans aren't here to see a game, or even a practice. They're here for a financial presentation.

"There's no shareholders' meeting quite like it," says Packers President and CEO Mark Murphy, the star of the show. Today and over the next few days, as the Packer faithful roll into town for the start of training camp, Murphy, a former Pro Bowl player who took over the team's top job in 2007, will try to be everywhere on campus, signing autographs and posing for photos. "With our ownership structure, it's really important for the fans to know they can talk to the president," he says.

Murphy's position is unlike any other in professional sports. With some 112,000 shareholders, the Packers are the only publicly owned team in America. Add to that Green Bay's distinction as the country's smallest major league sports market and they seem a nostalgic aberration amid megamoneyed rivals like the Dallas Cowboys and New England Patriots. The longstanding line among football aficionados pegs the Packers as a charming welfare case that exists thanks only to the sufferance of other, richer NFL franchises. They allow the team to stay put in tiny Green Bay as an emblem of the league's working-class roots.

The problem with that story: It isn't true.

In reality the Green Bay Packers are an emerging financial power in the NFL. Despite their minuscule market, revenues for fiscal 2010 hit an alltime high of $259 million, 11th out of 32 teams and well above major-market franchises like the San Francisco 49ers ($234 million) and the Atlanta Falcons ($233 million). The Packers are regularly one of the 15 teams that pay into the league's reserve fund rather than draw from it (so much for welfare). Their Super Bowl win, coming enhancements at the stadium and the league's new collective bargaining agreement with players will make them stronger still.

"They're an anomaly," says Andrew Brandt, president of the website National Football Post. "They're clearly the smallest-market team in all of professional sports, yet they're a high-revenue team with no debt. There are a lot of big-market teams that wish they had that kind of financial situation."

How small is Green Bay (pop. 103,700) compared with other markets? Brandt, a FORBES SportsMoney contributor who spent nine years with the Packers as vice president in charge of player contracts, recalls a meeting with representatives of the Arena Football League. They were looking to start a Green Bay team, but because the city didn't meet the AFL's market-size requirement, the new team would be part of the developmental league, AF2. "I said, ‘Let me get this straight,'" says Brandt. "‘We're big enough for the Packers, but we're not big enough for the Arena League?' "

Like all 32 NFL teams, the Packers depend on the league's national revenues, shared equally. The Packers' piece of the league's $4.2 billion in TV deals is $131 million, or 51% of Green Bay's revenues last year. As a member of the NFL's ten-person executive committee, Murphy knew his top priority was making sure the revenue-sharing regimen didn't get diluted during summer negotiations among owners.

Similarly, preserving and strengthening the salary cap that prevents rich teams from outspending poorer ones was Murphy's primary concern in the discussions that led to the new ten-year collective bargaining agreement with the players' association. The new arrangement will do more than maintain the status quo. The Packers should benefit from the new CBA, which lets them hold on to more of their local earnings.


But if leaguewide TV deals and salary caps help the Pack stay on par with rivals, it's their unique relationship with fans that puts them in the top tier financially. From the first of four public stock offerings in 1923 (shares are nontransferable) through the Vince Lombardi era to last year's Super Bowl win, the team has crafted deep ties to their followers. When FORBES recently ran the numbers on which NFL faithful were the most passionate (comparing television ratings and Internet traffic to market size) the Cheeseheads emerged on top. Every home game since 1960 has been a sellout, and the waiting list for season tickets is 88,000 strong. In 2010 the Packers led all NFL teams in merchandise sales, and they lead in local per-fan revenue at $312 (the league average is $41). Robust broadcast ratings mean they can charge a premium for local rights to air games: Its deal with local radio station WTMJ nets $3.5 million annually, about twice what the Indianapolis Colts or the Buffalo Bills get.

Engaged fans also make an attractive audience for sponsors, even in northeastern Wisconsin, hardly home turf for blue-chip banks and high-tech titans. Without selling the naming rights to the stadium (unthinkable), Murphy and his team made $26 million off deals with MillerCoors, Associated Bank, the Oneida Nation and others last year. Compare that with Seattle's Seahawks, which sold the naming rights to Qwest Field in a 15-year, $75 million deal in 2004 but earned only $22 million in sponsorships last year, despite a much bigger, and wealthier, regional market.

The team's unrivaled goodwill also proved decisive during the most important moment in its financial history: a $295 million renovation of Lambeau Field in 2003. Funded in large part by a 0.5% local tax increase, the team won over 53% of voters--many of them shareholders--by convincing them that what's good for the Packers is good for Green Bay.

The 300,000-square-foot facility added five restaurants, a hall of fame and Pro Shop, and event spaces that can be rented out year-round--which contribute an extra $20 million a year to the team's bottom line. It vaulted the Packers into the upper half of NFL teams by local revenue after it was completed, despite a slumping regional economy. "The fact that there wasn't an owner made the referendum much easier to get passed," says sports business consultant Marc Ganis. "Voters knew this was not money that was somehow going to find its way into the pockets of a wealthy family." Since no dividends are paid out to shareholders, all profits--$12 million last year, thanks to their postseason run--stream back into the team.

Not that the community-ownership model is without drawbacks. It lacks nimbleness, for one thing. "Sometimes the decision making takes a little longer," says Murphy. "You've got a board structure to work through, whereas if you had a single owner, you could go to the owner and get a decision." The slower process also tends to produce a more conservative result, although that's not necessarily a bad thing, says Ganis. "In good economic times, when everything is growing, it's a restriction on the revenues they might have to spend," he says. "But when things go to hell in a handbasket, they look as solid as the dollar used to be."

A tall, broad-shouldered 56-year-old, Murphy took over the CEO job from Bob Harlan, who held the post for 18 years and is widely credited for the team's resurgence after the fallow 1970s and 1980s. As a candidate, Murphy could boast a unique résumé: His career began on the field, where he won Super Bowl XVII as an All-Pro safety for the Washington Redskins. Retiring after the 1984 season, his eighth, he went on to earn a law degree, work in the Justice Department and head the athletics programs of Colgate and Northwestern.

Joe Gibbs, the Hall of Fame coach who led the Redskins to three championships, noticed Murphy's knack for leadership early on. "He was somebody I could go and talk to if we were having problems," he says. It was Murphy's intelligence and command of the game that elevated him from a walk-on free agent to a Pro Bowl starter, says Gibbs. "Mark was so smart," he says. "He made the absolute most of his abilities."

Murphy's teammates also relied on his judgment, electing him as their representative to the NFL Players Association in five consecutive seasons, a span that included the contentious 1982 strike. After his playing days ended he went to work full-time for the NFLPA as its assistant executive director and served on the bargaining committee during the 1987 strike. Twenty-four years later he was back at the negotiating table during the league's recent labor dispute. This time he was on the other side. "I think I brought a different perspective that was helpful to the process," he says.

With the lockout over Murphy can turn his full attention to an upcoming $130 million renovation of Lambeau, this one funded by the team rather than by taxpayers. It will add 6,600 seats to the south end zone, a bank of elevators servicing the luxury boxes in the north end zone and bigger video screens, creating an additional $9 million to $13 million in revenues annually. It's all he can do to maximize the building's earnings potential. Replacing beloved Lambeau with a more modern facility will never happen. For the team faithful it's a shrine, not a stadium. And with a capacity of 73,000 it's already at the larger end of NFL sites, although it doesn't feel that way. The secret is the bleacher-style benches that make up all the nonpremium seating; they enable the stadium to cram in another 10,000 on Sunday--adding some $4 million annually--and some needed warmth for fans.


Rabid as Wisconsin's Cheeseheads may be (and here the author of this article discloses that he is one of them), there is still a limit on how much money the Packers can wring out of the region. So Murphy's looking elsewhere: "People who aren't necessarily aligned with a specific team are naturally drawn to the Packers" by their history and blue-collar ethos. "We're a lot of people's second-favorite team."

To reach potential fans he's launching a virtual network for team-affiliated bars called Packers Everywhere. The idea was a brainchild of the digital marketing agency Blue State Digital, where Murphy's daughter once worked. Miller-Coors, the team's number one sponsor, is "excited about being associated with this," says Murphy.

Looking even farther afield, he says the Packers would love to gain exposure to potential European fans by playing one of their games in London, as two NFL teams do every year--although only if it counts as an away game, Murphy hastens to add.

And what about the biggest exposure of all--a Super Bowl in Lambeau? While fans have been buzzing about the idea ever since the league green-lit a cold-weather championship game in New Jersey's New Meadowlands, rules dictating minimum requirements for hotel rooms and practice facilities probably nix the idea. "I've heard from a ton of shareholders and fans that this is our chance, go after it, but it's highly unlikely," Murphy says. Guess they'll have to travel.

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