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Green Bay Packers New Stadium Development

JACOB M. HETRICK SOUTHERN NEW HAMPSHIRE UNIVERSITY

SPT-620 FINANCE AND ECONOMICS OF SPORT DR. HUNTER

2022, OCTOBER 23 This study source was downloaded by 100000780153789 from CourseHero.com on 06-02-2023 18:56:36 GMT -05:00

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Sports Organization Overview

 Category: Profession team in the National Football League  Area Demographics and Location:

 Small Market Team, 2020 Population: 107,395 (United States Census Bureau, 2020)

 Located on Fox River outlet into Green Bay, an inlet of Michigan Lake (Brittanica, 2022)

 Humid continental climate highlighted by harsh, cold winters  “Precipitation during the winter months is generally limited by the

presence of cold, dry air, though significant lake effect snowfall events are not uncommon.” (GLISA, 2016)

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Industry Standing

 Team valued at $4.25 billion, number 15 on the Forbes valuation list

 Average ticket price in 2021: $128 (Forbes, 2022)

 Average of 7.59 million a year of the past 5 years, 3rd in the NFL (Sullivan, 2022)

 Highest fan attendance in the league (Sullivan, 2022)

 Third highest merchandise purchases (Sullivan, 2022)

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Forecasting Costs and Revenue

Category 2021 (Actual)

Expecte d Change

2023 Q3 (Projected)

2023 Q4 (Projected)

2024 Q1 (Projected)

2024 Q2 (Projected)

First Year Total

Percentage of Seasonal Revenue 100% 20% 65% 13% 2% Revenue $579,011,000 4.6% $121,130,194 $393,673,131 $78,734,626 $12,113,019 $605,650,970 Direct Costs ($67,863,000) 2% ($13,844,052) ($44,993,169) ($8,998,634) ($1,384,405) ($69,220,260) Gross Profit $511,148,000 4.9% $107,286,142 $348,679,962 $69,735,992 $10,728,614 $536,430,710 Game Expenses (schedule 1) ($27,111,000) 2% ($5,530,644) ($17,974,593) ($3,594,919) ($553,064) ($27,653,220) Team Expenses (schedule 2) ($55,353,000) 2% ($11,292,012) ($36,699,039) ($7,339,808) ($1,129,201) ($56,460,060) Administrative Expenses (Schedule 3)

($350,958,000 ) 2% ($71,595,432)

($232,685,154 ) ($46,537,031) ($7,159,543)

($357,977,160 )

Debt Service (Schedule 4) $5,111,000 5% $1,073,310 $3,488,258 $697,652 $107,331 $5,366,550

Total Expenses: ($428,311,000

) ($87,344,778) ($283,870,529

) ($56,774,106) ($8,734,478) ($436,723,890

) Operating Income: $82,837,000 $19,941,364 $64,809,433 $12,961,887 $1,994,136 $99,706,820

Expected First Year Changes over

Inflation (2%)

• Local Revenue: 4% • Local Revenue: 5%

• National Revenue: 1% • Investor Return: 3%

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Costs and Revenue (Breakdown)

Category 2021 (Actual) Expected Change 2023 Q3 (Projected) 2023 Q4 (Projected) 2024 Q1 (Projected) 2024 Q2 (Projected) First Year Total

Percentage of Seasonal Revenue 100% 20% 65% 13% 2%

Sources of Revenue: $0

National $347,270,000 3% $71,537,620 $232,497,265 $46,499,453 $7,153,762 $357,688,100

Local $231,741,000 7% $49,592,574 $161,175,866 $32,235,173 $4,959,257 $247,962,870

$0 $0 $0 $0 $0

Direct Costs: $0 $0 $0 $0 $0

Sales, Marketing, Fan Management ($67,863,000) 2% ($13,844,052) ($44,993,169) ($8,998,634) ($1,384,405) ($69,220,260)

Schedule 1: Game Expenses: $0

Facilities, net ($27,111,000) 2% ($5,530,644) ($17,974,593) ($3,594,919) ($553,064) ($27,653,220)

Total Game Expenses: ($27,111,000) ($5,530,644) ($17,974,593) ($3,594,919) ($553,064) ($27,653,220)

Schedule 2: Team Expenses: $0

Team Costs ($55,353,000) 2% ($11,292,012) ($36,699,039) ($7,339,808) ($1,129,201) ($56,460,060)

Total Team Expenses: ($55,353,000) ($11,292,012) ($36,699,039) ($7,339,808) ($1,129,201) ($56,460,060)

Schedule 3: Administrative Expenses: $0

Payroll ($280,874,000) 2% ($57,298,296) ($186,219,462) ($37,243,892) ($5,729,830) ($286,491,480)

General ($70,084,000) 2% ($14,297,136) ($46,465,692) ($9,293,138) ($1,429,714) ($71,485,680)

Total Admin. Expenses: ($350,958,000) ($71,595,432) ($232,685,154) ($46,537,031) ($7,159,543) ($357,977,160)

Schedule 4: Debt Service: $0

Investment Fund Gain $5,111,000 5% $1,073,310 $3,488,258 $697,652 $107,331 $5,366,550

Total Debt Service: $5,111,000 $1,073,310 $3,488,258 $697,652 $107,331 $5,366,550

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Economic Impact  Economic Impact

 Revenue: Increase from $579m (2021) to $605m (2023-24 season)

 Increase in local revenue of $16.2 million, 2.5 times expected inflation growth

 Additional 7,000 seats to open 3,500 season ticket slots and 3,500 single game attendees

 Downtown location to increase out-of-market fans’ accessibility

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Economic Theories or Models

“New stadium will bring in construction and improve the cities modern infrastructure which might be why a new stadium has caused GDP growth in Metropolitan Statistical Area’s who have chosen to invest in these projects.” (Nicholson, 2021)

The multiplier effect is the “idea that locals and traveling fans spending money related to the stadium and the team will boost the economy significantly.” (Nicholson, 2021)

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References Britannica. (2022, August 4). Green Bay, Wisconsin, United States.

https://www.britannica.com/place/Green-Bay-Wisconsin

Forbes. (2022) Sports money: 2022 valuations. https://www.forbes.com/teams/green-bay-packers/?

sh=1dd5481e6a0b

GLISA. (2016, March 11) Historical climatology: Green Bay, Wisconsin.

https://glisa.umich.edu/media/files/GreenBayWI_Climatology.pdf

Nicholson, A. (2021, April 26). Romanticizing the NFL stadium. Clark University.

https://commons.clarku.edu/cgi/viewcontent.cgi?article=2781&context=asdf

Sullivan, K. (2022, August 1). The five metrics to compare NFL fan bases. Samford University.

https://www.samford.edu/sports-analytics/fans/2022/Die-Hard-or-Fair-Weather-Fans-Ranking-All-

32-NFL-Fan-Bases

United States Census Bureau. (2020, April 1). Green Bay city, Wisconsin.

https://www.census.gov/quickfacts/fact/table/greenbaycitywisconsin/POP010220#POP010220

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Image Reference Britannica. (2022). Lambeau Field. https://cdn.britannica.com/80/229180-050-E17293B9/Lambeau-

Field-Green-Bay-Packers-Wisconson.jpg

Fucillo. (2022, January 2). Green Bay Packers fan.

https://dknation.draftkings.com/2022/1/2/22855849/green-bay-packers-playoff-picture-rooting-

interest-week-17-cowboys-vs-cardinals-number-one-seed-bucs

Stoss. (n.d.) Green Bay downtown district. https://images.squarespace-

cdn.com/content/v1/5ae4926236099b34d8f79912/1554330234412-

9KXWPX4R4DA922JS1EOS/2005+Green+Bay+CityDeck+2013.JPG?format=1000w

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