Why Owning Part Of One NFL Franchise Is Essentially Worthless

Breaking down the Green Bay Packers ownership structure and financials

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Friends,

The Green Bay Packers have an ownership structure unlike any other franchise in major U.S. professional sports. Rather than being owned by an individual, the Packers have existed as a publicly owned nonprofit since 1923. Today we’ll be taking a look at their unique ownership structure, why other teams haven’t followed their lead, and how COVID-19 will impact their financials.

Entire Packers defense celebrates after Preston Smith interception

How Does It Work?

The Green Bay Packers pride themselves on being the only publicly-owned, not-for-profit, major league professional team in the United States. Rather than having a single wealthy owner, or multiple partners, the Packers are owned by fans - specifically 360,760 shareholders owning a total of 5,011,558 shares. To protect against someone taking control of the team, the articles of incorporation prohibit any person from owning more than 200,000 shares. (Source).

The story goes like this - In 1923, the Packers found themselves in financial trouble, so they sold shares to local residents in order to keep the lights on. Since then, the team has held four additional stock offerings in 1923, 1935, 1950, 1997 and 2011 (Source). In 2011, the Packers sold shares in both the US and Canada with all proceeds from the offering supporting the expansion of Lambeau Field. The project cost $146-million and included a new distributed-audio sound system, two new HD video boards, and approximately 7,000 additional seats in the south end zone.

What Do Shareholders Get?

Basically, nothing. Packers shareholders get to “vote to elect Green Bay’s board of directors and a seven-member executive committee that represents the team at league meetings.” However, shareholders “have no real say in team decisions, football or otherwise.”

Fans looking to make a profit will have to look elsewhere - The Packers stock pays no dividend and isn’t tradeable or able to be sold. The last time a sale was conducted, 2011, a single stock went for $250 which bought shareholders a souvenir certificate to hang up on the wall, a chance to buy shareholders-only merchandise, and an invite to Lambeau Field to attend the annual shareholders meeting during training camp. Essentially, buying shares in the Green Bay Packers is like paying an fan club initiation fee.

Here is a photo of an original 1923 Green Bay Packers stock certificate. Although it cost $5 in 1923, the original copy was just sold for $10,500 (Source).

1923 Green Bay Packers Stock Certificate.... Football Collectibles ...

Why Aren’t Other NFL Teams Publicly Owned? In 1960, the NFL implemented the “Green Bay Rule” which states that “charitable organizations and/or corporations not organized for profit and not now a member of the league may not hold membership in the National Football League.” In simple terms, the Packers were grandfathered in as the only-publicly owned team in the league.

Let’s See The Numbers

Last week the Green Bay Packers reported $506.9 million in total revenue for FY ending 3/31, a franchise record total and first time over half-billion dollar mark.

On the teams annual earnings call, Packers president Mark Murphy said the team received a national revenue check of $296M from league offices - enough to cover player expenses for the year. While the other 31 teams don’t release earnings, each club gets the same national revenue payment from the league. So the $296 million in national revenues the Packers got means the NFL’s 32 teams split $9.47 billion before a single ticket was sold. And that number will only go higher this year because of annual increases in media contracts. From a local revenue perspective, the Packers took home $210M in 2020 - good for ninth in the league.

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Outside of financials, Murphy voiced optimism that the full season would be completed, even if fans aren’t in attendance. Currently, the Packers have modeled out a scenario where only 10,000-12,000 of the ~82,000 seats will be sold (~15%). With a rainy day fund of ~$400M and increasing national revenue checks from league offices, Murphy seemed confident that even if local revenue was non-existent, the Packers would be fine.

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Extra Credit

Given the premise of today’s article, here is a video clip from CNBC breaking down how an NFL team makes money.

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