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The Green Bay Packers are the only publicly owned, nonprofit sports franchise in the country. The team can survive in a small market like Green Bay because of its fans, who own shares but don't receive a return on investment.


Public possession: Who really owns the Green Bay Packers?

by Lorenzo Reyes
Feb 10, 2011

PACKERS net income

Green Bay Packers/Lorenzo Reyes/MEDILL

The Green Bay Packers have seen a significant drop in profit in recent years, due in part to rising player costs. Fiscal years ended March 31.

With their Super Bowl victory Sunday, the Green Bay Packers are expected to see a spike in profits much to the delight of their 112,158 stockholders. However, these investors won’t see even a penny in returns.
That’s because the Packers are the only publicly owned, nonprofit sports franchise in the country, under the name Green Bay Packers Inc. 
But the Packers don’t conform to traditional rules of public ownership, casting doubt as to who actually owns the franchise.
The stockholders own 4,750,937 shares outstanding, but dividends are not paid and the stock can never appreciate in value. The shareholders don’t even get tickets for games at Lambeau Field. The only benefits shareholders actually receive are a vote for the seven-member board of directors election and a stock certificate.
The Packers have had only four stock offerings—in 1923, 1935, 1950 and 1997. The first three saved the company from bankruptcy. In the most recent, the company brought in new shareholders with the purpose of generating money to renovate an aging Lambeau Field.
“In the late ’90s, they realized the team was so popular that people wanted to buy shares of stock, particularly in Wisconsin,” said J. Gordon Hylton, a member of the National Sports Law Institute and professor of law at Marquette University in Milwaukee. “People just loved the idea of being a co-owner of the Packers, so they came up with this idea that by selling additional, sort of meaningless shares, they could raise the money necessary to renovate the stadium.”
Hylton said the 1997 sale added 100,000 new shareholders and raised “$20 million to $25 million” to fuel the stadium renovation project.
“In a kind of good-hearted way, this was one of the greatest scams of all-time,” Hylton said. “Except everybody sort of taken in by it, knew it. This was really like buying a piece of paper to frame and hang onto your wall. As a practical matter, there’s no reason to refer to these later shareholders as owners.”
Packers spokesman Aaron Popkey equates share ownership to making charitable contributions to the team. According to Popkey, instead of a financial return on investment, the appeal of owning shares is validated through emotional support of the franchise.
“I would let that characterization of it being as a donation stand,” Popkey said. “These people know they aren’t going to get a return on investment in that sense, but the return received is priceless.”
Hylton said the level of ownership for the newest wave of shareholders is even lower than those who have been with the company since the first half of the 20th century. “As a practical matter, their votes are not of any value,” he added. “They get to come to the shareholder meeting. They get to cast their vote, but the votes allotted to these new shares is insignificant.”
To prevent any stockholder from taking control of the company, the 1997 sale prohibits any person from owning more than 200,000 shares. Also, the articles of incorporation stipulate that shares cannot be sold, except back to the company for a fraction of the original price.
Despite a 9 percent increase in total operating expenses, including a 16-percent spike in player costs, Green Bay was still profitable in the year ended March 31, 2010, netting $5.2 million, up  29 percent from $4 million a year earlier. 
That was thanks to all-time high revenue of $258 million, which was up 4 percent from the prior. The National Football League’s lucrative television contract, worth $8 billion, marks the highest source of income for the Packers, who pocketed $95.8 million from broadcast revenue. The NFL divides TV revenues equally among the 32 teams.
But the question remains: Where do all the profits go?
A small portion is donated to the Green Bay Packers Foundation, the company’s charitable arm. Other profits are set aside to accumulate. 
“For the time being, it just goes into a reserve fund to try to protect the team from future shortfalls,” Hylton said. “Because they face these escalating expenses, they never really have the problem of a massive surplus that they can’t stand.”
In an e-mailed statement, Popkey explained further: “We aren’t tax exempt by IRS code.  All our profits, if any, are required by our Articles of Incorporation to be reinvested into the organization to ensure its sustainability and/or given to charity.”
According to Green Bay’s annual report, the Packer Franchise Preservation Fund has not fluctuated since 2008 and currently stands at $127.5 million.
So what incentive do shareholders have to invest in the Packers?
To the people of Green Bay, the smallest city in the NFL, the stockholder structure essentially prevents the sale or relocation of the team.
Gertrude Behnke, an 86-year-old resident of Brillion, Wis., is affectionately known as Aunt Gert amongst Packers fans. The Behnke family has owned shares in the company since 1950 when Gertrude’s husband purchased them.
She rarely missed any games at Lambeau Field. Now, her season tickets have been passed on to her son, embodying the family values the Green Bay Packers strive to uphold.
“There is a great interest in the Packers in this country and in this area,” Behnke said. “If you’re interested in something, I think you should be willing to invest into it. It’s great entertainment and it’s just a community effort to support the Packers.”
Bob Karis of the Wisconsin Department of Financial Institutions confirmed the company’s registration under Chapter 180 as a nonprofit stock corporation. Normally, nonprofit organizations in Wisconsin are filed under Chapter 181, but when the Packers were originally incorporated in 1923, the chapter did not exist, leaving the company grandfathered into its current situation. 
“Those who have shares in the team financially supported the team and it’s another part of their investment in the team,” Popkey said. “It’s a tangible piece to that support and all of them realize it’s not a investment in the stock market sense, but they know their contribution is going towards this franchise remaining strong and remaining able to compete for world championships.”