Panther's Financials Leaked, $112mil In Profits 2010-2012

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In 2010 and 2011, as the NFL prepared for and staged a lockout of its players, Carolina Panthers owner Jerry Richardson was among the hardest of the hardliners, urging his fellow owners to "take back our league" by demanding a more management-friendly collective-bargaining agreement.

Meanwhile, according to an audited financial statement obtained by Deadspin, Richardson's Panthers were making more than $100 million in profit over the fiscal years covering those two seasons.
The statement is for the years ending March 31, 2011, and March 31, 2012. Over the first period, as Richardson argued that the NFL's business model was hopelessly broken and steered the owners toward a showdown to extract more money from the players, the Panthers recorded an operating profit of $78.7 million. The team had gone 2-14 on the field, but Richardson and his partners were able to pay themselves $12 million.

Why the big gap in operating profits between 2011 and 2012? The Panthers decided to spend money on talent. Player payroll jumps from $78 million to $100 million, and amortization of player signing bonuses goes from $24 million to $54 million.


Over the following year, after the owners had won their lockout and reduced the players' share of league revenue from 50 percent to 47 percent, the Panthers brought in $33.3 million in operating profit. Richardson began lobbying for public subsidies to renovate his 17-year-old stadium. The team went 6-10.

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These franchises are a license to print money," says Dennis Howard, a business professor at the University of Oregon, who looked over the Panthers' financial statement at Deadspin's request. "This team is pretty damn healthy," he says, and its financial outlook is "very bright," citing the new, owner-friendly collective bargaining agreement and the league's fat new TV contract, signed in 2011, which kicks in next year. Under the terms of that deal, Howard estimates, the Panthers could bring in an additional $60-$65 million in annual TV revenue alone.

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A witness told Yahoo's Michael Silver about a March 2010 meeting at which Richardson addressed his fellow owners: "Jerry said, 'We signed a [expletive] deal last time, and we're going to stick together and take back our league and [expletive] do something about it.' He was practically yelling. It was amazing, and it set an incredible tone." In one memorable press conference before the work stoppage, Richardson, now 76 years old, drew a crude pie chart that showed the players swallowing up a preponderance of league revenue.

"I don't think many business schools would say that's a model that's going to sustain itself," Richardson said, claiming that team owners had "a negative cash flow of $200 million.

In 2011 and 2012, however, the cash position of the Panthers was healthy: $8.3 million and $38.4 million, respectively. Assuming Richardson's number has any basis whatsoever, it's likely he was factoring in an accounting sleight-of-hand known as the roster depreciation allowance (more on which later).

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Last fall, the team began drawing up plans for renovating Bank of America Stadium, which was built largely with Richardson's money and which opened in 1996. The Panthers figured renovations would cost $300 million, $200 million of which, they'd hoped, would come out of the public till. Charlotte has been eager to help, to the tune of $144 million. But the state thus far has been less accommodating, and with good reason.

"Based on the team's financial condition, there is absolutely no justification for such a large public subsidy," Howard writes in an email. The financials "show unequivocally that the team has the capacity to finance the improvements on its own. The team could easily pledge a portion of the anticipated increase in TV revenues to finance the debt service for the improvements."

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