Green Bay Packers’ profits continue to decline; player costs rising faster than revenue a growing concern
The Green Bay Packers once again were profitable over the past fiscal year, but their operating profit dropped more than 50 percent from the previous year as the rising cost of player salaries continued to outpace revenue growth.
In the team’s latest financial report, a preview of which was released to the media this week, the Packers’ operating profit for the 2010 fiscal year (ending March 31, 2010), was $9.8 million, down from $20.1 million the year prior. The primary reason for the decline, despite a $10.1 million increase in overall revenue, was a $22.1 million jump in player costs, which increased 15.9 percent from $138.7 million to $160.8 million. It marked the third consecutive year that operating profits declined, from $34.2 million (2007) to $21.4 million (2008) to $20.1 million (2009) to $9.8 million (2010).
That’s the trend the Packers have pointed to as unsustainable – declining operating profits, which reduce club incentives to make investments necessary to grow the game – and is the key issue in the league’s ongoing negotiations for a new collective bargaining agreement with the players’ union.
“The organization is in good shape financially, and we remain fully able to support our football operations and provide all the resources needed to field a championship-caliber team,” Packers President/CEO Mark Murphy said. “But over the last few years we’ve been concerned with the escalation of player costs relative to overall revenue and reduced incentives to ownership to grow the game. That’s what we’re looking to address in the CBA negotiations, because if the current trend continues, it’s not good for the Packers or for the NFL.”
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