Green and Gold: Tourism relations between the Green Bay Packers and the host community

Douglas Michele Turco, Ph.D. (Bureau of Tourism & Recreation Research at Illinois State University) Choonghoon Lim, M.S. (Bureau of Tourism & Recreation Research at Illinois State University)

Introduction

Sport can offer the host community many economic and social benefits and costs. In some communities, sport serves as a focal attraction, attracting tourists and additional economic development. Sport may provide entertainment for local residents and a broadcast audience via media distribution channels. It has been claimed that sport can also offer a competitive advantage in attracting businesses to a city. Because of these and other benefits, proponents contend that sport is worthy of public financial investment and support. On the other hand, critics of publicly supported sport operations argue that civic resources would be better spent on job creation, schools, or to improve other essential public services (Nelson, 1996; Baade & Dye, 1990). Costs to the host community also associated with sport tourism may include congestion, crime/hooliganism, price inflation, and degradation of natural resources.

Several studies have examined the economic impacts of professional sport teams (Phares, 1996; Schaffer & Davidson, 1985), their stadium development, and financial operations (Turco & Ostrosky, 1997; Baade, 1996; Rosentraub, Swindell, Przybylski, & Mullins, 1994; Johnson, 1993). Fewer studies have attempted to balance the economic and social costs and benefits of professional sport accruing to the host community. The purpose of this study was to describe the tourism relationships between a professional sport franchise and the host community, using the Green Bay Packers of the National Football League (NFL) and the city of Green Bay, Wisconsin as a case example. Secondary data were obtained from city and county government units to identify recent changes in the tourism sector of the Green Bay and Brown County economies.

 Community Profile

Green Bay is one of the oldest European settlements in the United States. It was founded because of the fur trade and that it afforded access by water from Lake Michigan to the West via the Wisconsin and Mississippi Rivers. The city has hosted the Green Bay Packers of the National Football League (NFL) since their inception in 1919. Apart from this, and its location at the mouth of Wisconsin’s Fox River on North America’s largest fresh water bay, there is little to distinguish Green Bay from hundreds of other smaller American cities (Alesch, 1995).

Green Bay is located in Brown County in northeastern Wisconsin, and has a 1990 population of 96,466. In 1990, median household income for Green Bay was $26,770 (U.S. Bureau of the Census, 1990). Together, Green Bay, De Pere, Kimberly, Kaukana, Little Chute, Appleton, Menasha, Neenah, and Oshkosh form a linear urban area of 50 miles that is home to approximately 500,000 people. The area is home for health and life insurance corporations. It is a major food producer with meat packing, canned and frozen vegetables, and cheese. It is also a center for making paper, paper products, and machinery for the paper industry.

Green Bay Packers

The Green Bay Packers, Inc. is assigned to the National Football Conference, Central Division, of the NFL. It is America’s only publicly owned, not-for-profit, major-league sports franchise. The team is set up as a non-profit corporation, publicly owned by 1,877 shareholders and governed by 45 directors and a 7-person, unpaid executive committee. When the team, which was founded in 1919, was on the brink of bankruptcy in 1950, 4,632 shares of stock were offered to the public at $25 apiece. No dividends have ever been paid and all profits have been put back into the franchise.

The Green Bay Packers have played before 185 consecutive sellout crowds at Lambeau Field dating back to 1960, demonstrating that the team’s fans are not of the "fair weather" variety. The stadium was built for $960,000 in 1957 after a successful public bond referendum. Since 1980, Green Bay has spent over $40 million for stadium updates such as skyboxes, club seating and giant replay boards. Stadium seating has expanded seven times since 1961, increasing Lambeau's capacity from the original 32,150 to 60,790 including 2,702 private box and 1,920 club seats.

Packer teams were crowned Super Bowl champions in 1966 and 1967 but experienced few winning seasons during the 1970s and 1980s. However, recently, the Green Bay Packers have enjoyed considerable on-field success. In 1996, the team played in the NFC championship game. In 1997, the team won Super Bowl XXXI, beating the New England Patriots. In 1998, the Packers were unsuccessful in defense of their title, losing to the Denver Broncos in Super Bowl XXXII.

The team’s winning ways have correlated with recent financial success for the Packers franchise. Totaled shared income from ticket sales and media contracts has increased from $37,258,282 in 1995 to $41,411,408 in 1997 (See Table 1).

Table 1. Income Statement – Ticket and media income

Source: Hoover’s Handbook of American Companies.

The Packers rely upon relationships with the league’s other teams for their economic livelihood. NFL’s revenue sharing practice, viewed by some team owners as restrictive, is considered vital to the financial success of the Green Bay Packers, who reside in the league’s smallest media market. The NFL divides all television revenues equally among its franchises, including playoff games. Forty percent of ticket receipts go to visiting teams, and merchandising profits are split evenly. Approximately 86% of the Packers' revenue comes from shared sources - 63% from the league's television contract and another 23% from ticket receipts, licensing agreements, and other income that the NFL divides among its teams. Since league teams compete in publicly and privately financed facilities, the teams, such as the Green Bay Packers, playing in publicly owned facilities have an advantage. With less capital tied to debt retirement, they may use revenues to hire more talented free agent players.

Community Tourism Relations

In Green Bay, the core tourism attraction may be considered the weekly games between the Packers and their NFL opponents. Several peripheral attractions also extend from this core attraction. As the NFL regular season nears, visitors flock to see the Green Bay Packers during training camp. The impact of the 1997 preseason training camp on the host economy was estimated at $4 million, double the revenues of the previous summer. To accommodate the increased volume of training camp visitors, the team has developed the Packers Experience, an interactive event that challenges participants to throw, catch, kick, run, block, and do the "Lambeau Leap." The attraction is located next to the team’s training facility and the Green Bay Packers Hall of Fame. The stadium where the Packers play is also a tourist attraction when it is empty. More than 29,000 visitors took the 90-minute tour of Lambeau Field in 1996. Attendance at the Packer Hall of Fame in 1996 totaled 160,607, up 65 percent from 1995. A $1,040,000 expansion of the facility was completed in 1997 in response to increased visitor demands.

The relationship between the Packers and the community’s tourism industry is most profound in the accommodations sector. In 1997, 39 lodging establishments totaling 3,338 rooms were sited in Brown County, 198% over the area’s 1980 room totals. Local lodging accommodations were booked full during home game weekends in 1996, 1997, and 1998. Most hotels/motels require a two-night minimum length of stay, an uncommon practice prior to the team’s winning ways. Lodging sales tax revenues for Brown County in 1996 totaled $37,879,703, up 5% from 1995 ($36,195,606). Table 2 reveals that sales receipts at eating and drinking places in Brown County increased from $215,248,000 in 1995 to $244,379,000 in 1997. It should be noted that valid use of secondary data for economic impact assessment can be limited due to attribution issues. To assume that reported increases in lodging and sales receipts for Brown County are exclusively attributed to the Green Bay Packers would be inaccurate. However, it is assumed that as a focal attraction, the Packers have considerable influence on the sales increases within the county’s accommodations sector.

Table 2. Economy of Brown County ($000)

Source: Market Statistics Inc.

The tourism influence of the Green Bay Packers is felt in communities 30-40 miles away. During a regular season weekend, a Green Bay home game fills over 75% of the 2,331 hotel and motel rooms in the Appleton area, 30 miles southwest of Green Bay. In 1997, the Green Bay area’s hotel/motel rooms were sold out the weekend of the Super Bowl. The game was played in New Orleans.

As a tourism attraction, the Packers are considered a good buy, even with recent price increases spurred by heightened consumer demand. One month after winning Super Bowl XXXI, Packer officials announced that season tickets between the 20-yard lines would go up $5, and all others would increase $4. The average ticket price at Lambeau Field in 1997 was $34.85, up 13.9 percent from $30.61 in 1996. The Packers now rank 20^th in the NFL in both average ticket prices and the Fan Cost Index, a compilation of the price of two small beers, four small sodas, four hot dogs, parking, two programs, two hats and four average-price tickets.

Packer fans exhibit high levels of identification and involvement with their team, as evidenced by their purchase of licensed merchandise. Sales of Super Bowl XXXI merchandise, most of it featuring the Green Bay Packers, hit a record-setting $130 million (Green Bay Press-Gazette, 1997). Green Bay’s victory over the New England Patriots triggered a wave of consumption well beyond the northeast Wisconsin market. NFL Films’ Packers highlights video sold more than 65,000 copies in its first five days, making it the fastest-selling sports video ever. Another 64,000 sold the next week. Sales of Logo Athletic Packers locker-room hats, first seen nationally during the presentation of the Lombardi Trophy after the game, totaled 650,000. In 1996, sale of licensed Packers merchandise was 5.6 percent of the total among the 30 NFL teams. In 1997, it was 14 percent. In January 1997 alone, Packers merchandise sales totaled $70 million. There appears to be little that Packer fans won’t buy. In 1997, the Packers sold 50,000 5-inch squares of sod from Lambeau Field’s frozen tundra for $10 apiece. The chunks of turf were cut, bagged, and placed in a decorative box. Alesch (1995) reported that the annual direct economic benefits of the Packers on Green Bay were about $60 million.

Much has been made of the Packers unique organizational structure as a publicly traded, not-for-profit entity, creating great demand for its stock. Seeking to capitalize on this demand and the team’s good fortune as Super Bowl champions, a public sale of stock options was recently held, netting the organization $24 million from 106,000 new shareholders. These stocks differ from others as no dividends accrue to the investor nor can they be redeemed for value. They are, in essence, a souvenir piece of paper, suitable for framing.

Destination Image

The image of Green Bay is intertwined with the team. Green Bay is commonly referred to as Title Town, U.S.A. Packerland Drive, Lombardi Avenue, and Holmgren Way are examples of transportation arteries in Green Bay named after the team and its Super Bowl winning coaches. Similarly, the names, promotional messages, and decor of numerous local businesses reflect strong identification with the team, including the Packer City Hotel, Glory Years Bar and Grill, Title Town Brewing Company, and Fuzzy’s Shenanigan’s (owned by former Packer, Fuzzy Thurston).

The Packers recent on-field successes have generated considerable media attention for the team, community, and tourism sectors. For two weeks following the 1997 Super Bowl victory, telephone inquiries to the Green Bay Area Convention and Visitors Bureau increased 500 percent, with two-thirds of the calls placed out of state.

Scholars have rightfully criticized the impacts of sport franchises and stadium deals on urban economies as reported in flawed studies. Further, some have suggested that community deals to attract/retain sport franchises are politically motivated, and that such influence has tainted the validity of the economic impact research used to "sell the deal" to the public. This may be true in some cases, but to state that all sport franchise deals are losing propositions for local residents is misguided. Contrary to Baade's argument (1996), a sport franchise can be a good deal for the host economy if it induces large net increases in spending from sources outside the designated economy, and retains resident income. Turco and Ostrosky (1997) identified three conditions under which a NFL franchise may foster significant financial return on investment (ROI) for the host community, and thus becoming a "good deal." Each condition is met and induced by the Green Bay Packers:

(1) Team personnel, headquarters, practice and/or pre-season training facilities reside within the host economy;

(2) The team attracts peripheral business development (i.e., lodging accommodations, eating and drinking places, retail shops, etc).

(3) The team attracts non-residents and stimulates their spending within the local economy.

 An economic impact study of the Packers conducted in 1987 estimated that more than 90 percent of the Packer’s ticket and merchandise sales revenues originate from outside Brown County. In this regard, the Packers are an export, attracting nonresident income.

Another side to the sport-tourism ROI equation is similar to the "lost opportunity cost" point of contention often made by sport development critics. Economic impact studies essentially seek to determine what would be missed had the team in question vacated the local economy. One of the reasons why the Packers abandoned their split home game schedule between Milwaukee County Stadium and Green Bay’s Lambeau Field in 1994 was economics. Packer home games in Milwaukee contributed to local income leakage and prevented the flow of nonresident income into the Green Bay economy.

A symbiotic relationship exists between the Green Bay Packers and the host community’s tourism industry. The Packers presence provides local businesses with a marketing advantage over other geographic competitors. A study of Green Bay area business executives representing firms in size from 50 to 800 employees examined their perceived economic value of the Packers to local industries (JMA, 1987). Because of name recognition associated with the team, being from Green Bay enabled the businesses to be more successful in the national marketplace.

From an economic standpoint, all may appear to be green and gold in Packerland, but there have been negative economic consequences as well as social costs incurred by some residents attributable to the team. Hotel room rate inflation of nearly 100 percent occurs at some properties during home game weekends, though this may be of little consequence to most residents. In terms of social costs, traffic congestion and public crowding appear to be tolerated by locals. During the 1980s, several altercations between players and citizens in bars and nightclubs resulted in criminal charges and convictions. Isolated instances of similar conflicts extend into the 1990s.

This study has described the relationships between a sport attraction and the host community’s tourism industry. In sharp contrast to conclusions drawn by other researchers, findings from this study suggest that a sport franchise can make substantial net economic and social contributions to a community’s tourism industry.

References Cited

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Baade, R. A. (1996). Professional sports as catalysts for metropolitan economic development. Journal of Urban Affairs, 18(1): 1-16.

Baade, R.A. Dye, R.F. (1990). The impact of stadiums and professional sports on metropolitan area development. Growth and Change, 2 (12), 1-14.

Anything Packers creates record $130 million in sales. Green Bay Press-Gazette, April 4, 1997, A-2.

MA/Applied Research Group, Inc. (1987). The Green Bay Packer Fan: Profile and Perspectives. Foth & Van Dyke: Green Bay.

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Nelson, R. R. (1996). The rising costs associated with attracting and retaining professional sports franchises. Paper presented at the Sport in the City International Symposium: University of Memphis.

Rosentraub, M. S., Swindell, D., Przybylski, M., & Mullins, D. R. (1994) Sport and downtown development strategy: If you build it, will jobs come? Journal of Urban Affairs, 16(3), 221-239.

Shaffer, W. & Davidson, L. (1985). Economic impact of the Falcons on Atlanta. Atlanta: The Atlanta Falcons.

Turco, D. M. & Ostrosky, A. (1997). Touchdowns and fumbles: Urban investments in NFL franchises. Cyber-Journal of Sport Marketing, 1(3): 100-110.