Carolina (Panthers) on everyone’s mind

Before you read the rest of this post, head over to Deadspin and read about the Carolina Panthers’ leaked financials from the last two years.

Then read the Charlotte Observer’s piece, which includes a response by the Panthers.


The leaked document came from Deloitte, and there’s nothing to indicate that it’s inaccurate. In fact, the Panthers didn’t deny the report, only saying that the document presented “an incomplete picture” of the team’s profitability. According to the team, the missing context was the uncertainty surrounding the league lockout preceding the 2011 season. It’s not unusual these days for teams to considerably shrink operations during a lockout, establishing a sort of bunker mentality. The consequences can be cruel, as it usually means laying off dozens if not hundreds of “non-essential” personnel. In the Panthers’ case, they decided that they’d be best off reducing player payroll. And so they did with a $77 million roster, $43 million short of the $120 million salary cap set for 2011. Philosophically all of this probably made sense back then, as the team was in rebuilding mode with #1 draft pick Cam Newton and Ron Rivera replacing John Fox at head coach. Newton’s Rookie-of-the-Year campaign juiced the loyal fanbase enough to boost the following year’s payroll to $100 million. Despite that uptick, the Panthers’ record only improved by one win last season. The team finished 3rd in the NFC South, going 7-9. The NFLPA predicts that the 2013 cap will be $123 million.

Carolina Panthers 2011/12 balance sheet from leaked Deloitte & Touche audit

Carolina Panthers 2011/12 balance sheet summary from leaked Deloitte audit

The Panthers are ranked #16 in the Forbes NFL valuations list with an estimated revenue of $269 million for the 2012 season and a valuation of just over $1 billion. Not knowing Forbes’ exact formula and numbers, I imagine that the discrepancy is mostly a matter of accounting, depending on whether partner distributions (profit-taking) and other maneuvers with team revenue are counted. Distributions amounted to $12,228,541 for both years, or roughly a 6% return on the original $206 million franchise price. That leaves a rather large net income amount that they can do whatever they want with.

One of those things they can do with the money is fund the improvements they are requesting for Bank of America Stadium. You may remember that a month ago, the team struck a deal with the City of Charlotte and Mecklenburg County for a package of improvements that would total $300 million. This week the state balked at giving the share it was expected to provide ($62.5 million), and the leak certainly won’t help Panthers owner Jerry Richardson’s case for a handout. It’ll be interesting to see if new pressure mounts to have the local public funding aspect of the deal reversed, since it’s clear that the team can pay its own way. To do so may require scaling things back a bit, but really, why on earth is $250-300 million necessary for a stadium that’s only 17 years old and is one of the better designed and maintained facilities in the league? The Panthers had expected to pay $96 million of the project cost. If the City/County reneg on their part, Richardson could be forced to scale back the project to, say, half the size and cost at $125 million. That amount in a loan for 25 years at 6% runs $9.3 million per year. With what we’ve learned this week, Richardson and the Panthers can afford it. Of course, this news didn’t come in time before Atlanta officials announced that a deal has been struck for the Falcons’ $1 billion retractable dome plan, which will include $200 million in public funding.


What does this mean for the Raiders? Politically, it’s terrible. Not only will the memory of the Mt. Davis debacle not go away, now comes this news that should cast doubt on any team crying poor and looking for a public handout.

Except for one thing. When the Raiders cry poor, they are in fact, poor. Not poor as in sleeping on the street, but poor in terms of losing money on a regular basis. Forbes noted that the Raiders posted losses last year and in 2009. The Oregon professor consulted by Deadspin for the article, Dennis Howard, mentioned that when he looked at league financials a decade ago, the Raiders lost money then. Considering how bad a deal Mt. Davis has been for all concerned parties, it could be the worst all-around stadium deal in the history of sports. Nevertheless, the fundamentals are that the Raiders continue to come up short in the revenue game in Oakland. Worse, they don’t have the cash reserves or cash flow to bankroll a significant new stadium project. Perhaps they don’t even have enough to fund a revamped Coliseum as I’ve suggested. Season ticket rolls going into the new tarped-off Coliseum were lower than another Raiders team – the Texas Tech Red Raiders, who hit over 30,000 season tickets last year – and that’s an also-ran program in the Big 12.

The NFL is giving the Raiders guidance and the Raiders are taking steps to boost revenue, but as we know in the Bay Area, they’re not going to see big returns unless the team starts winning as it did a decade ago. It’s hard to see how this can be turned around as long as the dependency is there. No wonder the NFL is skittish about earmarking G-4 money for a Raiders stadium project. We know that in the short term the Raiders will have two choices: stay at the Coliseum while working out a venue deal in Oakland, or go to Santa Clara for 5-10 years. I wrote a month ago that the costs could prove prohibitive in Santa Clara if they were to pay for the true cost to stage the games, compared to continuing to get a large subsidy from Oakland/Alameda County. Ultimately, the cheapest option may be for the Raiders to limp along in the Coliseum as is while the parties wait for the fanbase to grow as the team improves. Hopefully, this doesn’t also mean that the A’s will have to keep sharing the Coliseum indefinitely. That’s not something that either the NFL or MLB want.


Added 11:00 AM – Deadspin just completed a reader chat with University of Michigan sports economics professor Rodney Fort. Some of it is good reading.

11 thoughts on “Carolina (Panthers) on everyone’s mind

  1. re: When the Raiders cry poor, they are in fact, poor.

    …So the Raiders have no money for a stadium. Oakland has no money for a stadium. And even if the NFL were willing to help (which is more in doubt now than it was a couple months ago), it would only pay for 20% of the cost. Not seeing how the Raiders get a new stadium in Oakland.

  2. As a Raiders fan, not a way to start a Friday. Ugh! At this point I don’t know what to think anymore in terms of new venue for the Raiders. BTW, how does Mark Davis feel about loosing money on a yearly basis? Is it possible we could see him sell the team in the future? As a see it now, my ranking for a new Raiders venue: SC, LA…followed by Oakland:(
    Oakland is obviously a sinking ship when it comes to the future of sports. MLB would be wise to finally throw in the life preserver for the A’s and allow them to safely abandon ship.

  3. “Not seeing how the Raiders get a new stadium in Oakland.”

    Or anywhere

  4. I’ve been thinking for awhile now that the Raiders really have no choice but to be a tenant in someone else’s stadium. They don’t have the revenue or exceptionally deep-pocketed owners — at least one of which would be required — to go it alone. Without a massive amount of public funding, I just don’t see how they ever come up with the money to build a modern NFL stadium. The two obvious choices are Santa Clara and Farmer’s Field (ML’s latest post on that notwithstanding). Unless, of course, Mark Davis sells to someone with considerably more resources at their disposal. That could be a game-changer.

  5. Still gotta wonder if the table is being set for a move back to LA: Try for another year (and most likely fail) to get a stadium deal in Oakland, tarp off the seats because of poor attendance, cite low revenue problems, lose money. Then in a year announce a move to the LA Coliseum and stay there until one of the LA stadium deals comes to fruition.

  6. Hey ml, great article, never mistaken u for a Raider hater, u have been been really honest and fair when it comes to the Raoders and new stadium..Oakland Raiders gotta start winning if they want any leverage

  7. As opposed to MLB ballparks, the very limited number of stadium event dates is the biggest hindrance to the profitability of NFL stadium operations. For this reason, it comes as no surprise that the 49ers are including a third locker room in their Santa Clara Stadium.
    I don’t believe the 49ers will play hardball in negotiating a short-term lease(five to ten years) with the Raiders. At this time, the Raiders have little to lose by giving Santa Clara a test run. If anything, it gives Oakland more time to come up with a possible new or renovated stadium plan for a long-term return of the Raiders. There is also a possibility that the stadium sharing arrangement at Santa Clara could work out well for both the 49ers and the Raiders.
    Finally, this gives the A’s some breathing room to remain at the Coliseum until a new ballpark is finally built at San Jose, or wherever.

  8. I tend to side with the Panther’s with this one in that their high net come was more of an anomaly then the norm. Why you ask? Because we do have actual guidance into what a high revenue team looks like: the publicly traded Green Bay Packers. When they had one of their best seasons coming off a SB win, they only raked in ~$42M. I can only imagine what 2nd and 3rd tier teams like the Panthers and Raiders are making, although I don’t necessarily think they are losing money.

  9. Interesting news ML. The Raiders are suffering the consequences of extremely bad management. AL Davis never marketed tge Raiders because he believed the Silver and Black could Market itself. He always spent lots of money but it wad to old washed up veterans. The NFL sells itself and if you put a good product on the field you can make money anywhere. How many fan bases could remain strong after only 3 winning seasons out of 18???? And not only that but 11 straight 10 loss seasons???? And when you suck you should get a great player in draft but instead you draft jamarcus over A.P and megatron or Robert freaking Gallery at #2 or DHB a projected third rounder at #7 and pay scrubs like javon walker 56 million. The Oakland Raiders after 1995 have been an absolute disaster. It is a travesty because the Silver and Black is a Brand, an iconic franchise, it has a clear distinction and a broad national following and it should be at the top of the NFL world with the likes of the Cowboys packers and steelers not beneath the jaguars. I hope we can suck it up and build it the right way like the seahawks and the niners. Great young cheap prowbowl caliber players. If we resign middle of the road guys like wheeler and meyers for long expensive deals i will know for a fact that we are not committed to long term success but more of the same crap. Go get us some dominant young cornerstones who will be raiders next 10 years.

  10. ML – sorry to go off topic, but back to the subject of video boards in NFL stadia and the Niners’ plan:

    “Largest outdoor video board” sounds good to me.

  11. I hate to say it but it looks like the Raiders need to be sold or partner up with a company like AEG if it wants to build a new stadium anywhere. The resources in Oakland and the state are tapped out for other things.

    Oakland is a medium sized city with Detroit sized public debt. We all know that whatever the city council is saying or trying to do about a sports venue for the A’s or Raiders is just a load of BS. I think ML has covered every stadium idea in the country and until Oakland finds a way to start paying off its debt it will not be able to subsidize its sports teams in any way. We all know the A’s and Warriors want out of Oakland, and they are willing to pay for a new stadiums elsewhere. The Raiders have not said it, but if its true and they lower the attendance next year as expected than it will only be a matter of time before they leave for Santa Clara or LA. If the Raiders fail to get 53K per game next year it will only give more ammo to the Oakland naysayers that Oakland does not deserve its pro teams. Expect to see more pictures and negative blogs next football season showing a tarped off Coliseum.

    October 2013 (A’s lease)is only 8 months away and 2014 (Raider’s)is right around the corner.

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