Opening the books
As the person responsible for the players’ purse strings in Green Bay for nine years, I always dreaded this day on the calendar – the Monday following the weekend news stories about the Packers’ operating profit the previous year. As the NFL’s only public company, the team’s annual report is an open book for the world to see the profits and losses of a professional football franchise. Right there in the news were our revenues balanced against our expenses. Even when I spoke to NFL managers at the annual program at Stanford in June, our statement was right there on the PowerPoint for everyone to pick apart.
The majority of my time there, the profit margin ended at around $20 million. For the fiscal year that ended in March, the Packers show $248M in total revenue against $228M in expenses, an impressive accounting in the midst of this economic crisis, but a profit margin of only $4M, down $19M from a year ago.
The reason I dreaded the day is that a steady stream of calls would come in from player agents suggesting ways we could put all that profit to use. It was especially difficult when I was in the middle of a negotiation arguing over hundreds – or even tens -- of thousands of dollars with headlines about our $20M-plus in profits with no debt to retire. I usually ended up thanking everyone for offering ways to burn through that profit and reminded them that there were plans for that money (plans that were divulged on a need-to-know basis).
Another person who was always keenly interested in the news of our annual report was the late Gene Upshaw. He and the NFL Players Association would use the operating profit margins from – by far – the smallest market in the league to show the owners that even tiny little Green Bay could be in the black by over $20M. Now, with that profit margin down 80 percent from a year ago, the new union leader, DeMaurice Smith, may not be able to crow as much as Upshaw about tiny Green Bay and its profits.
What Upshaw certainly knew -- and Smith knows as well -- is that the Green Bay Packers are a truly unique brand, one that is not replicated in any fan base in the country. Believe me, I lived it. Packer nation is unlike any other. With 81,000 people on a season-ticket waiting list, with half the population on any given day wearing Packers gear, with Fanfest in March selling out in minutes, with practice squad players recognized wherever they go, the Packers are a brand that the NFLPA would have to admit is not typical.
The books are open and the Packers are making money, although far less than in recent years. This story will be spun in different ways in the coming months. …
The New York Giants’ deal with Timex, announced last week, represents a win-win for both parties and a true sign of the times.
The Giants’ and Jets’ new stadium opens a year from now, a jewel of a sponsorship opportunity with twice as many games as every other NFL stadium. There has been no news on the naming rights since the failed attempt from Allianz this past fall, a deal scuttled by the company’s ties – however real or perceived -- to the Nazi regime. Similarly, the Cowboys’ new stadium, a magnificent palace featuring the highest profile team in the NFL, is unveiling this season without a naming-rights sponsor.
On the naming-rights front, we’re left with just one deal this year in the NFL, a short-term branding opportunity for Land Shark Lager, a joint creation of Anheuser-Busch and Jimmy Buffett. Land Shark will be the naming-rights sponsor for Dolphins games this year, although the inventory does not include the marquee events in that facility in early 2010, the Pro Bowl and the Super Bowl.
The lack of big-time, big-money, long-term naming-rights deals is not a surprise in the meltdown/downturn/recession we’re in. The market adjusts, adapts and reconfigures toward deals like Land Shark and the Giants’ agreement with Timex.
Timex will be the name sponsor not for the new Giants stadium, but for the team’s new practice facility, a state-of-the-art complex that will be named the Timex Performance Center. Perhaps more importantly, Timex will have its name on Giants players’ practice jerseys this summer at training camp, a piece of inventory the NFL opened up this year – along with liquor and lotteries – to provide clubs with more potential revenue streams.
This is a sensible and shrewd deal for the Giants. They now have a reported $35M from a partner with strong name brand and credibility, and they preserve the most important inventory, naming rights for their new stadium.
And a brilliant play by Timex. On every evening newscast, in every morning newspaper and online sports section, in every report about the New York Giants this summer -- all in the country’s largest market -- there will be a picture from that day’s practice with a player wearing a practice jersey adorned with Timex. Similarly, once the new stadium opens in 2010, there will be strategically placed Timex clocks counting down to kickoff, reminding thousands what company is providing that countdown. Now, if Timex could only get the players to wear its watches during the games. …
The report of Bernie Kosar filing for bankruptcy protection is a surprising and serious cautionary tale for all athletes of any income level. As I say so often when I speak to players, whether as an agent or working with a team, professional football allows players a head start on the rest of their lives. That’s all. With careers being so short and the earning potential so fleeting, the number of athletes who can realistically claim long-term financial security from careers in professional football is smaller than most believe.
Kosar is not someone you’d think would be financially unstable. He graduated in three years from the University of Miami and enjoyed a long and successful career with – for the time he played – top-of-market earnings at the highest-paid position in the game. In addition, he appeared to be doing well following his playing career and was even touted as someone who was as successful in business as he was on the playing field.
Not so. Kosar has listed assets of $1-10M and liabilities of $10-50M. He owes almost $1.5 million in unsecured debt to the Browns, for whom he played from 1985-1993. He also owes his ex-wife $3M and owes the owner of the Cleveland Gladiators of the Arena League $725,000. And he owes a bank more than $9M for bad real estate deals.
Kosar made tens of millions playing in the NFL and appeared to possess some business savvy in his post-career business and financial dealings. Now it appears he’s fallen victim to those dealings.
Michael Vick – forgetting everything else swirling around him – was the highest-paid player in football not long ago. He, too, has filed for bankruptcy protection.
The toughest job for agents, managers, friends, family, wives and girlfriends of professional athletes is very simple: curb the enthusiasm for spending. I realize it’s difficult for athletes who haven’t had much in their lives to delay gratification, but I’ve seen too many end up broke. If there’s one mantra every athlete should remember about getting paid in pro sports, it’s this: It’s not what you make that counts, it’s what you keep.
Welcome to summer. In the east coast, we’ve been building arks.
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