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An Argument For Opening the Books

Today the Green Bay Packers did something that other public companies in the U.S. do on a quarterly or annual basis, and held a conference call to present their financial results.  The Packers are unique amongst NFL teams (and the NFL itself) in that they are the only organization that is considered public (it is owned by the good people of Green Bay, Wisconsin).  The relationship is a bit of "quid pro quo" - the people have invested in the team, and the team is obligated to present results to all owners.  I did not dial into the call, but experience tells me that they talked about growth in revenue, changes in costs, and maybe discussed any future plans that would materially impact revenue or costs in the coming quarters.

In reading the Twitter updates from those who did attend the call (folks like Ross Tucker, Jason LaCanfora and Mike Florio), the Packers reported that player costs rose at twice the rate of revenue, squeezing their net income.  This does not paint a pretty picture if the trend continues, and/or it presents a data point that will be useful in CBA negotations.

But we have to be careful - the Packers are just ONE data point among many, including the other 31 teams and all the other businesses that comprise the NFL.  If we extrapolate the Packers' results, we run the risk of assuming that player costs around the league are rising at twice the rate of revenue increases.  It is possible that this is true, but it is more likely that it is not.  The Packers have their own unique situation and local revenue is what is said to have suffered, not shared revenue (which comes from the whole league).  You also have to consider what the Packers classify as "player costs," which probably goes well beyond salaries and bonuses and into health care, pension/401(k), and maybe some administrative costs.

Herein lies the problem - the owners are now equipped to go to the bargaining table with "proof" that costs are rising at a rate that requires that players give up more in the CBA.  And the players are left with a very thin argument that "it doesn't make sense" that this is a league-wide phenomenon.  The best solution is "all or none" - either all books must be opened, or none can be.

As a side note, dialing in with thousands of your closest friends to listen to a presentation of numbers might sound like a boring way to spend 30 or 60 minutes.  However I encourage everyone to attend at least one of these in their lifetime.  Most big companies publish information on their Web sites regarding how to attend, or at least publish the recorded call after the fact.  Choose the company you work for (if public), choose one in which you have invested either directly or through your retirement plan, or even choose one that you just have a personal interest in.  It's sometimes surprising what information companies are willing to share with people who are willing to listen.