By Daniel Alesch, Ph.D.
The Green Bay Packers, Inc., is America’s only publicly owned, not-for-profit, major-league sports franchise. The team has survived, even flourished, for 77 years in Green Bay – a city of 97,000 people in northeastern Wisconsin.
The Packers team is an anomaly. National Football League rules prohibit replicating the Green Bay model. The league permits only closely held organizations with a majority shareholder. Not-for-profit, nonstock corporations are commonplace. Not-for-profit, stock corporations are rare. Despite their considerable attractiveness for special assets like the Packers, they are generally prohibited – except for a few applications, such as country clubs. Nevertheless, very important and widely applicable lessons should be drawn from the Green Bay story by communities across the country.
The direct economic benefits to Green Bay from the Packers are about $60 million a year from an asset that would cost roughly $200 million to replicate, if it were even possible to do so. The indirect economic effects of the Packers as part of the area’s magnet are almost impossible to measure, but locals believe the team is very important to their long-term well-being. Local charities will earn about $400,000 this year operating the Lambeau Field concession stands. The Packers players’ physical presence over the years, and the way many of them have integrated themselves into the community, form special, perhaps unique, community bonds in northeastern Wisconsin, adding significantly to the quality of life there. It is not all roses, however. Some Packers players are model citizens; others are not.
Green Bay and the Packers have done an exemplary job of creating, preserving, and enhancing the institutional amenity known as the Green Bay Packers football team. Knowing how they did it is an important lesson for others. Moreover, the lessons from the Green Bay story are just as applicable to the arts, entertainment, recreation, and industry as they are to sports.
The Packers flourish in Green Bay for several reasons. First, the organizational form and style of ownership ensure the Packers will remain in Green Bay. Almost 5,000 people own shares in the publicly held, not-for-profit corporation. No one may own more than a small fraction of the shares, so obtaining a controlling interest in the team is virtually impossible. Furthermore, if the team were to be sold, the net proceeds would go to a local American Legion post for the purpose of erecting a proper soldier’s memorial. There is neither the incentive nor the ability to sell or move the team. No one’s pockets could be lined in such a deal.
Second, the community has come to the aid of the Packers five times since 1922. Three of those efforts were flat-out financial rescues. On two other occasions, the city built stadiums for the team so it could remain in Green Bay and be competitive in the league. The first rescue was reluctant. The subsequent ones have been enthusiastic displays of support. The way the rescues were structured helps ensure the Packers’ viability and continued presence in Green Bay. The rescues have paid off for the team and the town.
Third, the National Football League (NFL) employs revenue-sharing techniques that help level the playing field for teams in smaller markets and keep the league competitive. They share revenue from television, ticket, and sales of merchandise with specific team logos among all of the teams. The league also imposes a salary cap on teams. Without such sensible policies, player free-agency and the demand for franchises – which has driven franchise values up enormously – would make it impossible for Green Bay’s team to survive, despite its unique organization and its legendary community support. Without such supportive policies, the team would remain in Green Bay, but could not be competitive and, ultimately, would wither away. Those policies are currently under attack from practices employed by the Dallas Cowboys’ ownership. If the policies that help ensure parity go by the wayside, so will, in all likelihood, the Packers.
Finally, Green Bay’s Packers have a much larger market than would first appear. Only about 200,000 people live in the immediate Green Bay area, but another 300,000 people live in the region immediately to the south, and the Packers sell many season tickets in Milwaukee and the southeastern part of the state. While most season tickets are owned within Wisconsin, season-ticket holders live in 47 states. The waiting list for season tickets has more than 20,000 names on it; the person who most recently obtained season tickets had waited on the list for 26 years! Packers fans are all over the country, as testified to by the fact that merchandise with the Packers logo on it is fourth in the nation among NFL teams so far in 1995.
The lessons from Green Bay are as follows. First, an institutional community asset can be created. It can have very positive effects on the community. That asset might be a professional sports team, but it could, just as easily, be an asset with a focus on the arts, entertainment, recreation, or industry.
Second, if a city has or wants to develop an institutional asset, the form of ownership is critical to ensuring that the asset will remain there. The fact that the Green Bay Packers are not-for-profit and can have no majority shareholder ensures they will be in Green Bay a long time.
Third, area businesses, government, and residents have to be willing to pitch in to support their amenity in times of crisis. There is no free ride. Communities that help bear the costs of creating, maintaining, and enhancing the amenity will benefit from it. In Green Bay, the Packers funnel money and quality of life back into the community. The team continues to repay the support it receives from civic organizations and local government. Mutual support is essential.
Finally, local governments should focus their strategic-planning efforts on creating, maintaining, and enhancing assets that are critically important to local well-being. Too many cities assume the assets that make their community special will remain vital and in place forever. These days, especially, that is not so. Special amenities and assets can disappear almost overnight.
