A look into NFL finances

Standard

With the Green Bay Packers being a public corporation and having to report its finances to the public I decided to surf the internet and see what I could find.

What I found is an old audited report from March 2000 that gives a look into the finances of a National Football League team.

It is interesting to see that basically the Packers finances, even though from 1999 on was estimated, that until the report ended in 2004-2005 the teams net income steadily grew. However, since they reported an operating profit of $34.2 million in 2007 the Packers seen it decline to $9.8 million in 2010.

It is no coincidence that the Packers profits have decline since luxury box revenue has been added to the equation for figuring the salary cap since 2007. Teams like the Dallas Cowboys and the Washington Redskins have so great a demand for their product that they can keep raising the price for their luxury boxes. That in turn raises the salary cap for everyone even though the small market teams’ revenue isn’t rising as fast.

One of the current sticking points in collective bargaining negotiations is the owners opening their books. The fact is the NFLPA knows that the current formula for the salary cap is a problem. What they are trying to accomplish is point out all the little bonuses and payments that owners are using to pay themselves and other family members.

Many people may think that whatever money a business makes in profits goes to the owner, but that would be wrong.

There are two ways, in regards to accounting, that an owner can pay himself. First, there is creating a annual paid position for himself, which is the reason that many owners are the chief executive officer of their own company. The other is through a drawing account that owners use to take money out of a business. A owner cannot take money out of a business without recording it, which is what John and Tim Rigas did.

In the end, all the whining over the NFL accounting books is really just an excuse to save money.

 

 

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.