The Deadspin tip line has turned up another doozy: audited internal financial documents that show that the Carolina Panthers turned a $112 million profit over the course of 2010 and 2011. That’s the same time period when Panthers owner Jerry Richardson was calling for a hard line in labor talks with players, declaring that league owners had “a negative cash flow of $200 million.”
Richardson, of course, is also demanding more than $200 million in public funds for stadium renovations, on the grounds that … well, he hasn’t actually said, other than hinting that Charlotte should be so happy to be allowed to have an NFL franchise that it should just throw money at it. That was already proving to be massively unpopular — 88% of state residents oppose it, the governor said he wouldn’t go for it, and yesterday a bipartisan group of state legislators reiterated that it was a no-go — and it’s only likely to get more so now that there’s evidence that Richardson is making money hand over fist at the old stadium.
Note, incidentally, that the lesson here isn’t necessarily that “Richardson can afford to pay for the renovations himself” — he can, in the sense that he has oodles of money, but he could also afford to buy a lifetime supply of $40 ice balls, yet that doesn’t make it a good idea. The question for Richardson is whether he’d make enough on stadium renovations to repay his costs; if not, he shouldn’t do it, but what the Deadspin revelations make clear is that he’s doing just fine, financially, in his 16-year-old stadium.
Now, would he do better elsewhere? The main reason the Panthers are so profitable, according to the Deadspin documents (nicely summarized here by Newballpark.org), is the more than $100 million in TV revenue that the Panthers, like every other NFL team, rake in each year. So you could argue that the Panthers would be just as profitable in another city, and so are a legitimate threat to move. Though of course there are no other cities that currently have even teenaged stadiums to offer, so effectively Charlotte is bidding against itself — something that North Carolina elected officials seem to have realized, at least, even if city ones haven’t.
The Panthers, meanwhile, responded with a statement saying they only turned a $66.5 million profit over those two years, which is still a pretty hefty amount of money. And as Deadspin notes, official NFL bookkeeping gets to take into account the “infamous roster depreciation allowance”:
The RDA is an accounting gimmick whereby a new owner of a sports franchise gets to write off 100 percent of the purchase price of the team over a 15-year period, on the specious logic that a roster depreciates the same way, for instance, that your office’s new fax machine does. That tax deduction shows up on the books as an operating expense, even though it’s a pretend-loss that exists only in the quirks of the tax code. Thus, Stephen Ross, who purchased the Miami Dolphins for $1 billion, can claim an operational hit of nearly $70 million. “It has a huge impact on the bottom line,” [University of Oregon business professor Dennis] Howard says. “You’re able to transform a real profit into an operational loss.”
Maybe there’s a reason why Richardson’s excuses for asking for public funds have been limited to “because we can.”