No, the Green Bay Packers are not a realistic business model for your local newspaper
This is a true story: The summer after 7th grade, I wrote a letter, on looseleaf paper, to then NFL commissioner Pete Rozelle, making what I considered a very logical argument: that Lafayette, Louisiana — the nearest city of any size to the town I lived in — should have an NFL team. Deserved an NFL team, actually.1
My supporting data was concise and direct. In the 1980 census, The World Almanac & Book of Facts told me, Lafayette had a population of 80,584 people. Meanwhile, Green Bay, Wisconsin — home of the 11-time world champion Packers — was barely bigger, at 87,947. By 1988, when I was writing, Lafayette was probably even a bit bigger than the burg with the frozen tundra. Just thinking logically, the fact that Green Bay could support a big-league football team proved that the home of the Ragin’ Cajuns could too.2
I did not get a reply from the commish, which I still consider a personal affront.
The Green Bay Packers are the NFL’s great exception. A century ago, there were plenty of small cities with big-league football teams — the Tonawanda Kardex Lumbermen, the Dayton Triangles, the Oorang Indians. But almost none could survive the 1920s, as larger markets beckoned. The Packers were the exception, the one team that never scrambled off to the big city. That’s because of its unique ownership structure: It’s owned by community shareholders, not a rapacious billionaire chasing whichever ambitious mayor he thinks will build him a stadium next.
Their unusual success has inspired imitators — in the news business, of all places.3 The community-ownership ideal is appealing to many who see local news as a valuable civic service. And the Packers are metaphorically appealing as a highly successful point of comparison. (Most business models haven’t won a Super Bowl!)
Here’s the L.A. Times in 2006:
Or, er, some site named Nieman Lab:
The most recent iteration of this theme came a month ago, when we learned about “a Green Bay Packers-style approach to rescue [a] Colorado newspaper”:
The Sentinel, a strong weekly with daily email newsletters, was acquired this month by a holding company that’s pursuing a Green Bay Packers-style model of community ownership, with shares sold to residents and supporters.
The goal is to have local owners save an essential local news source, and perhaps create an approach other communities can use to save their newspapers.
Dave Perry, The Sentinel’s longtime editor, said the Packers model “is perfect for Aurora.”
I wish the Sentinel nothing but the best, and am always happy to see different models being tested. But as the NFL preps for its opening kickoff this week, I feel the need to point out that the Packers are, in many ways, a uniquely bad metaphor for a local news business. (That feudalism worked great for Charlemagne doesn’t mean it’ll work for your tech startup.) Running a local news site is quite different from running a multi-billion-dollar football team! And before this model gets out of hand, let’s look at a few of the most important reasons why.
1st Down: Packers stock is worthless beyond fandom.
You know how there are people who will “sell” you a tract of land on the moon or a planet? Or even ownership of some star billions of light years away? Extraterrestrial real estate lies somewhere between entertainment and scam, given that the people “selling” the land don’t “own” it themselves, and your “ownership” will be accepted by no court of law, earthly or otherwise. But if you send in your money, you’ll get a certificate you can slap on your wall, as well as the ambient sense of status that comes with “owning” a corner lot in Mare Cognitum.
Owning a share of the Green Bay Packers isn’t a scam, to be clear — but it’s a lot closer to lunar real estate than what you’d normally associate with owning stock.
If you buy a share of Apple, you own a financial asset. If someone wants to buy it from you, you can sell it to them. If you want to buy more, you can buy more. If Apple does well, it’ll probably grow in value. Every quarter, Apple will take some portion of its profits and pay it directly to you in the form of a dividend.
If you want to buy a share of the Green Bay Packers, you mostly own…a certificate you can slap on your wall. Oh, and the right to buy a t-shirt or a garden stone proclaiming you a Green Bay Packers “owner.”
One Packers share costs a round $300 (“plus a handling fee of $35 for each certificate”); it grants you no equity in the team and no dividends, ever. You can’t sell it to anyone, ever; you can only give it “to immediate family or any lineal descendants,” and then only by paying an additional $25 “transfer fee” to the Packers. If the team catches you trying to give or sell it to anyone else, it has the unilateral right to buy back your $300 shares of stock at 2½ cents each — which is not usually how property rights work.
As the Packers’ most recent stock offering put it, in all caps: “COMMON STOCK DOES NOT CONSTITUTE AN INVESTMENT IN ‘STOCK’ IN THE COMMON SENSE OF THE TERM. PURCHASERS SHOULD NOT PURCHASE COMMON STOCK WITH THE PURPOSE OF MAKING A PROFIT. IT IS VIRTUALLY IMPOSSIBLE FOR ANYONE TO REALIZE A PROFIT ON A PURCHASE OF COMMON STOCK OR EVEN TO RECOUP THE AMOUNT INITIALLY PAID TO ACQUIRE SUCH COMMON STOCK.” The offering document is studded with headers like “Not an Investment,” “No Securities Law Protection,” and “No Profits or Dividends.”
Oh, and if you want to buy one tomorrow…too bad. Packers shares have only been sold six times in the past century (1923, 1935, 1950, 1997, 2011, 2021). The most recent sales have been done to fund stadium projects.
So what do you get as a Packers shareholder? Again, there’s the certificate, and the chance to buy that garden stone. You get to attend the team’s annual shareholder meeting, which seems like a nice afternoon at Lambeau. What about governance? You get to vote on any new members of the board of directors — but the only nominees are the ones put forward by the team itself. Corporate democracy this ain’t. There is no shareholder quorum large enough to bench Aaron Rodgers or fire Matt LaFleur.
(Shareholders even get some fun new financial liability with their certificate! Packers shareholders are strictly prohibited from “publicly criticizing any NFL member club or its management, employees or coaches or any football official employed by the NFL.” Commissioner Roger Goodell “has the authority to fine such shareholder up to $500,000.” Luckily, no self-respecting football fan has ever criticized the refs, so no such enforcement has ever been required.)
This isn’t “community ownership” in any significant sense. Local cooperatives can be a real pain to organize — just ask the people who’ve tried to do it with local news sites, or grocery buyers in Brooklyn — but they can achieve something approximating community control. Buying a share of the Packers is more like buying a game-worn Brett Favre jersey at the Lambeau Field pro shop — an expensive but effective way to demonstrate your fandom, to yourself and to others.
The one thing the Packers’ ownership structure does (functionally) guarantee is that it’ll never load up the Mayflower trucks and become the London Cockneys or the Montreal Emballeurs. Local control self-perpetuates through a board that selects its new members. But how often is relocation a problem for local news organizations? Are all the county-seat weeklies in Indiana moving to Chicago or something?
2nd Down: The NFL is socialism. Local news is not.
The late Cleveland Browns (and Baltimore Ravens, ugh) owner Art Modell once described NFL owners as “a bunch of fat-cat Republicans who vote socialist on football.” While teams are independently owned, the revenues their games generate are shared out equally to an extraordinary extent.
Individual teams get to keep 60% of their home-stadium ticket sales, most of game-day concessions, and whatever local corporate sponsorships they can arrange. But the really big money — the league’s multi-billion-dollar TV deals, league-wide licensing deals, merchandising, the NFL Network, the other 40% of ticket sales — are distributed equally among the league’s 32 teams, whether they’re in New York and L.A. or Green Bay and Buffalo. That shared revenue amounts to around $11 billion a year. Whether you’re the best team or the worst — in the biggest market or the smallest — that money gets shared equally.4
That’s great for comparative parity between teams. Every team has (roughly) the same amount of money to spend on players, and they’re all governed by the same salary cap — which means the NFL doesn’t get dominated by a few megarich teams in the biggest cities. Small markets can compete for the best players on a nearly equal basis; a team in the No. 36 media market can go from worst-in-the-league to the Super Bowl in two years.
Contrast that with what has historically been America’s least socialist sport: Major League Baseball. MLB teams negotiate their own local TV deals, which include the majority of their games. Those rights are a lot more valuable in L.A. or Chicago than in Cincinnati or Cleveland. As of 2020, the Los Angeles Dodgers were earning $239 million a year from their local deal — nearly 10 times the Milwaukee Brewers’ $28 million.
MLB does have a (not well designed) revenue-sharing model — but it still allows teams to spend wildly different amounts of money trying to win. This season, the three biggest-spending teams are L.A.’s Dodgers and New York’s Yankees and Mets. Together, their player payrolls add up to more than $778 million. That’s about as much as the bottom 10 teams combined. When a star player hits free agency, the default assumption among fans is that he’ll probably end up on the Yankees, Dodgers, or one of a few other big-market teams.
How does the NFL’s socialism compare to the economics of the local news business? There’s no revenue sharing in newspapers. The New York Times doesn’t have to hand over 60% of its revenues to be redistributed to papers in Peoria, Tucson, and Shreveport. The dailies in Boston and Omaha aren’t guaranteed the same newsroom budgets.
There’s no “league” of 32 local news sites serving as an effective cartel, blocking new competition from their playing field. And if a star reporter is looking for a new gig, can the Hometown Gazette realistically compete for her services at the same level as the Times, the Post, CNN, or ProPublica? If someone like David Fahrenthold wants to leave the Post, is his next job likely to be at the Green Bay Press-Gazette? Nah — he’s going to sign with the Yankees.
3rd Down: A local team doesn’t mean local ownership — or a local audience.
At the Packers’ most recent stock offering, in 2021, the team sold about 198,000 new shares at $300 a pop. Did they all go to local cheesemakers, “Laverne & Shirley” cosplayers, or other stereotypical denizens of the Badger State? No — only about 17 percent of the new shares were bought by Wisconsinites.
Green Bay may be the smallest market for an NFL team, but it also has, by many measures, the largest fan base. YouGov’s most recent polling says the Packers, despite being in the 69th-largest media market, is currently the No. 1 NFL team in popularity.
In sports, the relationship between population and popularity isn’t as tight as you might imagine. The Steelers, Saints, and Chiefs play in media markets No. 26, 50, and 34 — but in popularity, they rank No. 2, 3, and 6. Meanwhile, the Jets, Eagles, Falcons, and Texans play in markets No. 1, 4, 7, and 8 — but in popularity, they’re No. 15, 17, 24, and 26.
The National Football League is national. There are Packers fans in Idaho, Saints fans in Alaska. An NFL fan only gets to watch their local team once a week, but there’ll be almost a dozen other teams on TV during that span. Into fantasy football? You’re watching individual players across the league. How many Tom Brady fans switched loyalties from the Pats to the Bucs without moving to Florida?
Does any of that apply to a local news site? Are only 17 percent of your paying subscribers going to be from your city? Will millions of people track the byline counts of your reporters because they’ve got $200 on the line if they have a productive week?
4th Down: The Packers only work because they’re the exception.
The Packers’ setup is a nice story — a useful counterpoint to every Dan Snyder anecdote. But the truth is that what makes the Packers a successful enterprise is that they are a team in the National Football League, an attention-dominating powerhouse that produced 75 of the 100 highest-rated TV shows of 2021.5 Even the NFL teams with terrible owners are still worth billions. A majority of team owners inherited the team from their dad or grandpa, not because they climbed the ranks of business, and many hold onto control into their 90s.
The Packers’ ownership structure does minimize the chances of team control falling to some family’s Fredo or Buster. But the league’s Fredos and Busters (and they exist!) still make bank.
You couldn’t have a league with teams based in 32 Green Bays — for the simple reason that someone else would start a league with teams in New York, L.A., etc. and make a lot more money. But the NFL is foolproof enough to let one tiny market live among the giants without a hitch.
None of this is to say that community ownership isn’t an interesting option for local news outlets. It’s proven to be a difficult one, time and time again, but in the right place with the right audience, it can work. Maybe, in your community, an “ownership” metaphor will be more fruitful in appealing to your biggest fans than “membership” or “subscriber benefits” would be.
But the prerequisite for a community ownership model is an engaged, loyal fan base. If you don’t have that, well, you’re out of luck — turning yourself into a penny stock won’t help. But if you do have that fan base, a Packers-style ownership model is only one of the ways you can convert that into a sustainable business.6
And the success of the Green Bay Packers is not evidence that community ownership (or “ownership”) is a uniquely potent solution. The Packers could be run by military junta, constitutional monarchy, or anarchist collective — so long as the NFL lets it play 17 games a season, it’ll be a moneymaker. The biggest problem that community ownership solves — the temptation to relocate to a bigger city — is one local news outlets don’t really have.
The business takeaway from the Packers should be something like: If you get the chance to be one of a 32-member socialist cartel in your country’s favorite sport, you should do it — you’ll get rich. Not: The key to their success is the shareholder-only garden stones.
This would’ve been 1988. It’s possible I was drunk on the New Orleans Saints’ first winning season.Not to mention Baton Rouge! And Shreveport! And Beaumont! Maybe Lake Charles, if you squint? It’s possible that 12-year-old me didn’t consider the full range of implications of allotting one NFL team per 80,000 Americans.After all, pro teams and local newspapers are both usually named The City-Name Plural-Nouns.There are a few other very small exceptions, around things like national radio broadcasts and network-aired preseason games.Including all of the top 30, other than Biden’s inauguration and his post-inauguration address to Congress, each of which aired on a bajillion networks.Subscriptions! Memberships! Philanthropy! Sponsorships! Events! All the things every other successful publisher has tried!
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