Remember playing "lemonade stand" as a kid?
You and your friends/siblings dragged a card table to the sidewalk, made signs, harassed passers-by and (mostly) drank the lemonade your parents made for you. After an afternoon of hard work—or 45 minutes if you are honest about how quickly you got hot and bored—you were proud to earn about four bucks. And unless your parents were hardcore capitalists, they never mentioned that they provided $3.99 worth of sugar, lemons and cups.
NFL teams are a lot like 32 lemonade stands on 32 corners around the country. Except when your parents show up with a pitcher, there's $256 million inside of it.
The Packers reported their 2017 revenues and expenses to the public this week; as the only publicly owned team in the NFL, they are the only team obligated to do so. The Packers earned $255.9 million from the NFL in shared revenues. (All figures via Rob Reischel's article in Forbes). Those hundreds of millions are mostly television bucks, with some nationally pooled licensing and merchandise cash stirred in.
That's a quarter of a billion dollars each team earned, no matter how well or poorly they are managed.
Go 7-9 because you had no plan to be competitive (or even watchable) without your franchise quarterback? Here's $256 million. Go 0-16 because your general manager is conducting a mathematical thought experiment? Here's $256 million. Play in a dump of a stadium with divots on the field? Move your franchise before you have a real stadium to move to? Shun an exciting, capable quarterback for political reasons while charging fans to watch Tom Savage, Mike Glennon, Scott Tolzien, etc.? Don't worry if you spilled lemonade all over your kid sister: Your parents are here with a quarter-billion dollars for you.
Once NFL teams start actually selling some lemonade, that $256 million revenue figure climbs much higher. The Packers earned about another $200 million in local revenues, which cover everything from ticket and popcorn sales to local radio broadcast rights to income from the team gift shops.
The Packers are a popular national brand (good for merch), but they play in the tiniest market in professional sports (bad for broadcast rights, etc.), so that $200 million figure probably hovers around the middle of the NFL. How much are global brands like the Cowboys or Patriots—currently the two highest-valued NFL franchises at $4.8 and $3.7 billion, according to Forbes—making each year?
We don't know. Their players don't know. The NFLPA doesn't know. No one knows, because the other 31 NFL teams are privately owned and therefore not obligated to open their books.
But they should. It's time for NFL teams to come clean on how much money is really being made and where it gets spent.
Now, before we continue, let's address a counterargument that will appear almost immediately on the message thread and my Twitter feed:
Oh yeah? Well, how would YOU like it if your personal income and expenses became public knowledge? You'd consider it an invasion of privacy, right? Well, it's no different for NFL owners. Their teams are their property: How much they make and what they do with the money is none of our darned business, Bucko.
I would, in fact, hate it if my personal budget became a matter of public record, and so would you, and so would the coffee shop owners, roofers and other small-business operators down the street.
But unlike NFL owners, none of us:
- Ask for millions of taxpayer dollars whenever we want a new facility;
- Operate businesses that require intensive cooperation from the local police, parking authorities, departments of transportation and other civic agencies;
- Employ a sprawling, unionized national workforce in a dangerous occupation;
- Wield quasi-governmental powers to make rules, conduct investigations, levy suspensions and influence public policies on everything from gambling to people's postures during songs.
NFL players deserve to know how much money teams make so they can demand their fair share in collective bargaining. Taxpayers deserve to know how much money teams make because we end up paying for everything from stadium referendums to police overtime. Fans paying eight bucks for a hot dog should know whether the money is going to a new wide receiver or new upholstery for the owner's jet.
Of course, these are big reasons NFL teams don't want anyone opening their books.
Last year, the Packers' reported expenses rose from $376.1 million to $420.9 million. The salary cap rose by $12 million to $167 million; the Packers always spend close to that amount. That leaves about $250 million—roughly one free NFL lemonade check—that wasn't spent on player salaries, over $30 million of it new money in 2017.
Coaches need be paid, as do equipment managers, accountants and secretaries. It costs real money to fly 53 football players to eight road games; Packers CEO Mark Murphy cites travel expenses as a major reason for last year's increase in expenses. Scouting isn't cheap. And there are other hefty expenses casual fans never think about, from employee benefits to insurance.
But how much is your favorite team spending on owners' relatives with vague titles and responsibilities, investigators who never uncover anything, dinners with "clients" at the scouting combine and other extravagances? Is some team with a large-living owner spending 10 times as much on these things as the owner-less Packers? Is that money coming out of some linebacker's pocket, a television network's pocket or yours? No one knows.
Don't expect owners to open their books in the name of honesty, fair negotiations or fiscal sanity because…I mean, seriously. But unless they have some really nasty secrets to hide (long pause), owners should make at least the broad outline of their revenues and expenses public because it makes good business sense.
The NFL is currently fighting a narrative that the league is faltering, television ratings are plummeting, political boycotts are crippling the bottom line and so on. It makes the league look weak. News of the $256 million Packers payday was a big thumb in the eye of that narrative. News that some teams earn close to a billion dollars in annual revenue (the Cowboys generated $840 million in 2017, according to Forbes) will keep sponsors from getting antsy and make the doomsayers sound silly.
Honest accounting also makes collective bargaining easier. When a union is forced to guess how much money is in play, it leads to unrealistic demands: Why shouldn't 90 percent of television revenue go directly to player salaries? Secrecy leads to bad faith and bad public relations. When the labor force knows that X percent of revenue pays for insurance, Y percent for comfy team charter flights and Z percent to the folks who launder the jock straps, expectations become more realistic and work stoppages are averted.
Open books can even improve the product. Imagine knowing exactly how much the best teams spend on scouting or discovering that the worst teams are scrimping on facilities. Imagine the pressure an owner would be under if his team finished last in field maintenance budget but first in ACL injuries.
Open books would force NFL owners to operate like other captains of industry, who aren't motivated by public pressure but by shareholder expectations, cutthroat competition and razor-thin margins. Owners would hate that, of course, because who wouldn't enjoy playing real-life tycoon with their own half-billion-dollar lemonade stands?
The chances of any NFL owner voluntarily opening his books are zero-to-ROTFL, so we're left with the Packers figures, a looming collective-bargaining Dunkirk in 2021 and a sickly feeling that our favorite teams are stashing millions in their Scrooge McDuck vaults while crying poor whenever a running back asks for some extra guarantees or a player takes a political stance they oppose.
Nothing will change unless it turns out that the flickering television ratings and changing attitudes toward football are just late to catch up to the NFL. In a few years, owners may find sponsors a little less generous, the union a little more insistent and some other leagues competing for those revenue dollars.
The owners may want to show us just how financially strong they are now before they're the ones who are getting squeezed.
Mike Tanier covers the NFL for Bleacher Report. Follow him on Twitter: @MikeTanier.