Thursday-and-Long: Packers Doing Just Fine, Really

As the NFL's only publicly owned team, the Green Bay Packers are the one franchise that has to open its books to the public. And at a time of labor strife, with the NFL players' union calling for the league -- and the league refusing -- to provide audited financial statements for all 32 teams, this particular book-opening gets plenty of attention.

The Packers say player salaries are rising at twice the rate that revenue is rising. Astute observers ask how that's possible, since the NFL's salary cap is computed as a fixed percentage of league revenues. The reaction to Wednesday's news illustrates the width of the chasm between the NFL's perception of the problems at the heart of the current CBA dispute and the NFLPA's perception.

What you didn't see Wednesday was either side -- the NFL or the NFLPA -- rushing to ascribe broader meaning to the Packer numbers. And you won't. The union won't publicly assume that the Packers' finances reflect those of the other 31 teams, because to do so would undermine its argument that it needs those teams' audited financial statements in order to negotiate. And the league won't claim that the Packers' finances reflect those of the other 31 teams, because to do so would be to invite the union to say "Prove it."

But the numbers that came out of Green Bay on Wednesday do offer some perspective on this situation, and it's not a perspective that's going to help NFL owners cry poverty. No matter how you slice this, the Packers are a thriving business and a profitable enterprise.

Operating in a town with a population of a little more than 102,000 during a global recession, coming off a losing season and two years removed from the departure of the biggest star quarterback in its history, this is a company that realized a $9.8 million operating profit. The Packers' point is that that's down from $20.1 million last year, and way down from $34.2 million three years ago. But it underscores the fact that these NFL teams aren't running charities -- that even in difficult times, the business of the NFL is a pretty sweet one in which to be:

• While their operating profits dropped from $20.1 million to $9.8 million, the Packers' net profits actually went up -- from $4 million to $5.2 million. This is the result, the team says, of its investments not performing as poorly in 2009 as they did in 2008 -- a phenomenon to which everyone who has money in the markets can relate. The Packers reported $9.1 million less in unrealized loss from investments this year than they reported a year ago.

• The Packers' national revenues rose from $147 million to $157 million as a result of NFL Network and other TV revenue. Local revenues dropped $400,000, from $100.8 million to $100.4 million, in part because of slow sales at the team's merchandise store, Packers Pro Shop, but the overall revenue figure of nearly $258 million was an all-time high.

• None of these figures include the $127.5 million Packers "preservation fund," which is basically a rainy-day savings the team has in reserve in case something happens (cough ... 2011 lockout ... cough) that prevents it from running its business as usual. Wednesday's report reflects no increase in that fund from last year. (It wouldn't look too good to swell a lockout fund a year in advance of a planned lockout with the league denying those plans, now would it?) But the team did say it had purchased about $25 million worth of property around Lambeau Field and considers those purchases to be equivalent investments.

It's impossible to look at these numbers and think the Packers are hurting, or in any kind of serious financial trouble that would necessitate a change in the way the NFL operates. The only issue is that of player costs, which the Packers say rose from $139 million to $161 million over the past year, and there are explanations for that as well. The team says the increase reflects the aging of its roster -- players such as Aaron Rodgers and Greg Jennings make more money as they get older and move from the early parts of their careers into their primes -- and the fact that it had two first-round draft picks (B.J. Raji and Clay Matthews) to sign.

The balance sheets also show some bonus money from future years being moved up and paid in 2009-10, which makes you wonder if that's standard practice or if the team was looking for a way to stack one-year player costs for the purpose of this report. (Could be either, could be both.) Packer officials addressed that concern and said they were reporting their numbers the same way they always have. But even if you take the team at its word, factors such as the aging of the roster and the extra first-round pick money are cyclical and don't necessarily reflect an inexorable trend of rising costs and declining profits. Something as simple as a home playoff game, which the Packers haven't had in the past two years, could make these numbers look a lot better a year from now.

Bottom line: The Packers' financial information is going to be heavily scrutinized because it's the only information of its kind that we have, at a time when we really could use much more. But while the initial headlines about a drop in operating profit seem alarming, a closer look reminds us what this NFL labor dispute is really about. It's not that these teams are losing money -- far, far, far from it. They're just not (in the Packers' case, at least) making as much as they were a few years ago. And they want the players to cough up to help them get back there. If they're planning to use these Packers numbers as a way to make their case, it's not going to be real convincing. Shouldn't be, at least.