The Charlotte Observer
Fri March 8, 2013
Deadspin Report: Panthers Profits Nearly $100 Million Over Two Years
The Carolina Panthers, who are seeking more than $200 million in public funds for stadium renovations, said Thursday the team made $66.5 million during the 2010 and 2011 seasons, after an audit of the team was published by the website Deadspin.
The audit showed the team’s net income for those two seasons was just under $100 million. It showed a net income of nearly $72 million for the year ending in March 2011, after the team went 2-14. Two years ago, during rookie quarterback Cam Newton’s first season, the team’s net income was $26 million. The drop was due to the team spending significantly more on player salaries and signing bonuses.
The Panthers, in a statement issued Thursday night, said the team’s profitability is much lower. The team said its cash flow – before taxes – for those two seasons was $66.5 million.
The team said the figures are an “isolated snapshot … during an unusual time as the NFL lockout loomed.” The team said it had purposefully reduced spending before a labor agreement with players was reached, which was part of a “long-term plan to secure the team’s best talent once a collective bargaining agreement had been reached.”
The Panthers said the audit shows how difficult it is to compete in the NFL while also trying to undertake a large renovation of their stadium.
The report offers a rare glimpse into closely held financial information of the National Football League, the nation’s most popular sport. It also represents an unexpected twist in the Panthers’ request for taxpayer money.
The audit doesn’t cover the most recent season – the first played under the NFL’s new nine-year television contract extensions, which are reported to increase per-team payouts by 60 percent through 2022. The Panthers received $213 million from the league’s TV and radio contract in 2011 and 2012, according to the audit.
Bank of America Stadium, which opened in 1996, was mostly funded by majority owner Jerry Richardson and fans who bought Permanent Seat Licenses.
In January, the team asked the Charlotte City Council for $125 million to help pay for stadium renovations, which would include new escalators, video boards and improvements to clubs and suites. The city was also asked to contribute roughly $19 million over 15 years to help pay for stadium maintenance and traffic control.
The team has asked the state to contribute $62.5 million.
The total cost of the renovations would be nearly $300 million.
In return, the team would be “tethered” to the city for 15 years starting this summer.
Richardson, 76, has said he won’t move the team. But the city is worried that the team would be sold upon Richardson’s death, with a new owner seeking to move the team.
The city of Charlotte has so far embraced the plan. The City Council voted 9-1 in closed session in February to support the proposal, which would be paid for with a proposed increase in the local prepared food and beverage tax.
But the General Assembly in Raleigh – which must approve the tax hike – has given the team a frosty reception. A bill has been introduced in the legislature that would allow the city to use money from its Convention Center fund to pay for the stadium improvements. That fund has a surplus that could be used to finance $110 million in new debt.
Legislative leaders and Gov. Pat McCrory have said they don’t have the money to give the team help financially.
State Rep. Ruth Samuelson, a Charlotte Republican, is the lead sponsor of a bill to allow the city to use existing money to help the Panthers, but not to raise taxes.
“Part of me would question whether the information (in the Deadspin story) is correct,” Samuelson said.
“Would we still want to give the city permission to use their existing revenues? I guess I’d go back and ask the city, ‘Do you still want us to give you permission to help the Panthers?’ ” Samuelson said.
State Rep. Becky Carney, a Charlotte Democrat, said the bill gives the city flexibility to help the team if it wants.
“This is a Charlotte decision,” said Carney, who co-sponsored the bill.
Charlotte Mayor Anthony Foxx couldn’t be reached for comment. Deputy City Manager Ron Kimble, who has led negotiations with the team, also couldn’t be reached.
The audit says the team made $112 million in “income from operations in 2011 and 2012.” The team had $14.7 million in “interest expense” those two years, reducing its net income to $97.3 million.
The audit says the team’s “net cash” from operations was $26.7 million in 2011 and $39.8 million for the fiscal year ending in March 2012.
NFL teams’ financial statements are not public documents, except for the Green Bay Packers, who are publicly owned. Last summer, the Packers announced they had their best season financially, with total revenue of $302 million, up nearly 7 percent from the previous year.
During that same year, the Panthers’ total revenue was $254 million. That includes the team’s share of the national television and radio contract, along with $47 million income from NFL Ventures, an umbrella group that accounts for other licensing and marketing deals.
The city of Charlotte has given financial incentives to highly profitable companies to persuade them to expand or relocate to the city. Last summer, for instance, it gave defense contractor United Technologies $875,000 to bring an aerospace group to the city. Some council members objected, in part because the parent company had billions of dollars in reserves.
The Panthers have said they are an economic engine for the Charlotte area. The team released a study in February by four University of South Carolina economists that said the team has a total economic impact of $636 million for the area.
The city’s plan to increase the prepared food and beverage tax from 1 to 2 percent would generate about $1 billion over the 30 years of the tax.
The city’s plan is to spend $144 million on renovations; some money on amateur sports facilities; and to save hundreds of millions of debt capacity for a second round of renovations in 2027 or a new stadium for the team. Staff writer Jim Morrill contributed.