Packers Cut Salaries Of Coaching Staff
The Packers have reportedly cut the salaries of their coaching staff as the NFL's lockout continues on without an end in sight.
By PackerAaron
The Green Bay Packers have stated publicly that, unless games end up being missed, their non-football staff will not be subject to salary reductions during the National Football League's lockout of its players.
The same protection does not extend to their coaching staff.
Greg Bedard, quoting director of the NFL Coaches Association Larry Kennan in the Boston Globe this morning, reports that the Packers have already cut their coach's salaries due to the lockout.
From Bedard:
Kennan said only seven teams have pledged to their coaching staffs that they will not ask for any pay cuts unless the lockout extends into the season: Seattle, Philadelphia, Pittsburgh, Oakland, New York Giants, Indianapolis, and Dallas.
The other 25 teams have either already instituted cuts, will do so on June 1, or have the right to do so at some point. The cuts range from 20 to 50 percent.
“Four teams are at 50 percent, there are a couple that are 30 or 35, but generally it’s 20 or 25 percent,’’ Kennan said. “That’s significant. You’re used to living on that. To take half your pay away, that isn’t comfortable.’’
The Patriots, who had lockout clauses put into the contracts of assistant coaches, have not yet docked any pay and say they have no plans to.
Most of the assistants who lose wages will receive the money back once the lockout is over. But not all. The Dolphins, who will cut back all pay June 1, are among those that will not provide refunds, according to the Palm Beach Post.
Kennan said two teams that have already docked pay are the Ravens and Packers.
“That was surprising to me that they did that because those two teams are so good to their coaches and employees,’’ Kennan said. “They are two of the model organizations in the game. The coaches will recoup the money, absolutely.’’
This is exactly what I was talking about yesterday when I wrote about Roger Goodell, DeMuarice Smith and collateral damage. Yes, coaches will be reimbursed the money - that doesn't make things any easier for the coaches or their families as we head into summer.
The Packers had told reporters back in March that Mark Murphy, Ted Thompson and Mike McCarthy would be taking siazable cuts to their pay, while Packers' General Counsel Jason Wied had said that cuts were likely "in the future."
It seems the future has arrived.
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Comments (42)
maxginsberg
May 22, 2011 at 09:06 am
The unintended consequences of the lockout continue to mount and hurt the people directly and indirectly involved in the game.
How long until fans stop caring about football, and the NFL and NFLPA completely kill the golden goose?
May 22, 2011 at 10:24 am
If the money taken will be paid later, what is the advantage to the Packers?
May 22, 2011 at 12:00 pm
Cashflow.
It cuts expenses while there is no income. Money reimbursed at later date when income is available. Business 101 - defer costs.
May 23, 2011 at 08:41 am
Here's a nice little article from the motherships new NFCE blogger on this topic... sad that Jerrah gets something Murphy doesn't...
http://espn.go.com/blog/nflnation/post/_/id/40716/doing-the-right-thing-...
May 22, 2011 at 12:03 pm
*If you defer cost you keep the money and make money via interest. It no only saves you money but also acts as an income source.
PackerAaron
May 22, 2011 at 01:25 pm
I never buy this argument. What money are they losing? What is the dire need to free up "cashflow"? And its completely, categorically false to say that "there is no income". They're still collecting season ticket money. Offseason activities at Lambeau haven't stopped - you can still walk into the stadium and eat at the restaurants and buy things at the Pro Shop. If anything they have MORE money on hand than usual this time of year, not having held things like rookie camp and OTAs and the expenses they incur.
Oh, not to mention they have north of $100 million in their "rainy day" fund - well, what do you call this?
May 22, 2011 at 02:43 pm
Completely agreed. GB can afford the year off - the "rainy day fund" ensures it. I have a feeling Murphy is doing this to be in step with a majority of the owners here.
Completely bogus. I expect better of the GB franchise, and I believe this will hurt our reputation with assistants in the future. If you were a potential NFL assistant coach and had your choice of two jobs - and both monetary offers are equal, would you take GB's offer or PIT's offer after this?... Yeah, I'd take PIT too.
This is the kind of crap I expect from the OTHER teams in the NFCN. Not GB.
Very. Disappointed.
May 22, 2011 at 03:40 pm
Agree with AN and Bearmeat. Where is the loss of income NOW? Where do the Packers normally have income from February through May that they do not have in February through May 2011?
This is just another piece of useless posturing that does nothing to end this mess.
May 22, 2011 at 02:39 pm
I think in the Packers mind it may play against the player's position, in other words 'look what those players are making us do'. Coaches will be fine with back pay eventually paid.
May 22, 2011 at 02:40 pm
But there's boundless uncertainty that lies ahead. They don't know what kind of window they would have to operate in with reduced income (during the season). It's good business sense to cut expenses and save money which can be used to cover operating expenses if there are indeed games missed.
May 22, 2011 at 03:53 pm
I agree.
They're not losing money now, but if there's no NFL season, they'll miss this money.
They have to think long term.
I don't know if this is the right move, it could very well not be missed in the future. But from a business standpoint, I understand it.
May 23, 2011 at 08:08 am
Not buying it. The rainy day fund is for emergencies right? And the Packers made money even last year in the "BAD" CBA right? So if the lockout was really necessary, doesn't that qualify as an emergency? And if not, then who's the stupid business party?
So why the lockout again? Sounds to me like the owners are shooting off their own foot here... And shouldn't be able to punish others who have nothing to do with it just to save face.
May 22, 2011 at 03:00 pm
Their operating expenses last fiscal year were $248M. Granted this would come down with no games being played but they're also trying to upgrade the stadium so unless they have a separate account/financing for that they aren't hoarding this cash.
May 22, 2011 at 08:07 pm
That rainy day fund should never be tapped until -dire straights- are eminent. A potential work stoppage at this point should not be considered a threat to the Packers' existence at this point, so that money should stay put.
This is a wise, precautionary move for the Packers. I'm quite sure the Packers are one of those organizations that will be doling out 100% retroactive pay to the assistants once the lockout is over.
Aaron, you mentioned how the Packers are still taking in money at Lambeau in concessions and merchandising..
Let's not forget that training camp in and of itself is a colossal money maker for the Packers on that front.. One that isn't guaranteed to even occur this season. That potential loss of revenue alone is reason to preemptively tighten the belt for the Packers..
May 22, 2011 at 10:45 pm
I am over the NFL. Kind of like quiting smoking, once you realize you can live without it, why go back
May 22, 2011 at 11:21 pm
Yet here you are on a Packers blog, late Sunday night during the offseason. I can quit whenever I want!
May 23, 2011 at 06:25 am
Dear Packers
Please hire me to get paid 50% to not coach. In fact you can pay me any amount you want for doing nothing.
PackerAaron
May 23, 2011 at 08:18 am
This really shows how much you don't know about the situation.
May 23, 2011 at 09:23 am
I'd like to know more!
Bearmeat makes a good point; but I go back to wondering what the coaches are doing? There are no players to coach; the tapes have been gone through, they need more tape and won't get any until CBA is done.
Pardon my ignorance here, but no pay for no work.
Yes, I know that they're not sitting back reading magazines(MSP?); but certainly nothing like a normal off-season.
PackerAaron
May 23, 2011 at 10:01 am
It's not so much what there is to do now, but what they've done and what they will do once this mess is over.
First of all, they are coming off a season having gone through the insane grind every coach goes through - 18 hour days, missing holidays, missing family lives etc - which resulted in a Super Bowl win. Thanks guys! Here's a paycut!
Now, I'm mostly joking there, but there is a touch of truth.
The other, real reason is - imagine what kind of job they are going to have once this mess is over. Take a normal coaches workload - x2. Getting the rookies ready will be the biggest challenge, but there will be tons of continuity work, tons of work on any changes to gameplans that need to be made - all in the course of one or two weeks rather than two or three months.
Also, there's the small matter of the Packers absolutely, positively having no fiscal reason to make this move whatsoever.
The work that coaches do is taken for granted by most and these paycuts are a manifestation of that trait.
May 23, 2011 at 11:16 am
But aren't the coaches gonna receive every penny not paid now with interest once the season resumes?
PackerAaron
May 23, 2011 at 11:18 am
Only if games are not missed, which is looking more and more dubious by the day.
And I just hate the idea of squeezing these guys now, the one time of the year they get to be with their families. Call me a softy, but that's just unacceptable.
May 23, 2011 at 12:38 pm
I'm not saying I support the decision, I'm saying I understand it, and quite frankly don't think it's such a big deal.
Were they warned that this would happen previously? Will they get their money with interest back, if their work is resumed? Is their workload being reduced as of right now, with no football?
If all the answers are yes, it's not an injustice.
Now, would I like for the organization to keep things as it were and show some class and loyalty to their employees? Absolutely.
But from the business and legal standpoint (with the little I know), I don't see any irreparable harm being done. But then again it's not me taking a paycut...
PackerAaron
May 23, 2011 at 12:54 pm
They were indeed told before hand. They are indeed still working. I hate this decision.
May 23, 2011 at 09:09 am
I'm curious to know how many of the people commenting are in the business of business and how many are just working from layman's knowledge.
May 23, 2011 at 01:34 pm
Layman's knowledge here.
I do have a bachelor's degree in law (and work daily in the field as a lawyer), but in brazilian law, which derives from the continental law, which is very different from the common law employed in US.
So I work in analogue terms. Which are no better than layman's knowledge...
May 23, 2011 at 01:02 pm
Engineering from UW-Madison, Management from Northwestern.
This makes complete business sense. Whether or not it's right (@Nagler) I'm not sure. I tend to agree with Nagler that it's not completely fair. Aside from the morality, it only makes sense to prepare for uncertain business climate that lies ahead.
PackerAaron
May 23, 2011 at 01:13 pm
But how on Earth does this "prepare" them? They haven't had close to the expenses they would normally incur in an offseason (think about how much they must spend just to FEED these guys during OTAs and MiniCamps).
Throw in the fact that they are collecting season ticket money and I just don't see how cutting coaches salaries makes any "business" sense at all - other than the fact that they can because they can use the lockout as an excuse.
May 23, 2011 at 02:16 pm
Next, some of you will want to pay the players whether games are played or not ..... Better yet, reimburse season ticket holders full + 50% for games missed ...... (Don't want to create any hardship for anyone)..... Hell, just turn GB into a 'not for profit' organization ..
Face it, the GB franchise is more like the other 31 than unlike the other 31 ...... This 'mythological' view of the GB franchise is laughable ......
May 23, 2011 at 02:21 pm
Part of the CBA negotiations - on the owner's front - is including stadium improvement projects. The old CBA does not address improvements (or increased O&M costs) for stadiums. Moreover, in the past, new stadiums were subsidized heavily (if not completely) by government whereas now owners are fronting the cash in much larger amounts.
As it relates to the packers, their local revenues decreased from 100.8 to 100.4M last year while their increased revenue (10M) stemmed directly from increase in national revenues. They raised ticket prices in response to this local revenue dip.
The fact that stadium improvement projects are not included in the CBA along with the fact that big-wallet owners want to DECREASE revenue sharing which will adversely affect GB's revenue stream.
To prepare for this they can only hope local sales hold steady or increase (ideal); however, this would require either increasing stadium prices (bad call in current economic climate) or cutting costs locally. The idea is to save as much money (internally) as possible to provide funding for stadium improvement projects that will induce more people to spend and more people to come to the stadium.
We've all seen the stats that operating profits have increased 5.5% while player costs increased at 11.8%. The four year trend since '06 suggests that at some point soon the Packers will operate at a loss.
If the player costs are going to continue the upward trend they NEED to cut other costs immediately not only to fund improvement but also to prepare for lost income from lost games. $100M is a good starting point.
May 23, 2011 at 02:27 pm
The rainy day fund is a contingency fund which should only be used in absolute dire situations. It should viewed as untouchable for now.
Cutting coaching salary allows them to save money now. Why continue to pay coaching salaries (again igoring whether it's fair) when they receive no benefit from paying this expense?
Saving this money now allows them to increase their cushion for uncertainty ahead. I'm not sure how else to convey this point. No business would continue to pay salary when they receive no benefit from it. Especially when their revenue stream is so damn uncertain.
1. Costs increasing at 2x rate of profit
2. New CBA may reduce revenue sharing (adverse effect on packers in small market)
3. Stadium O&M, improvements not included in revenue sharing between owners & players in CBA
4. Risk of lost games = lost revenue
But continue to pay coaches?
May 23, 2011 at 02:45 pm
You seem to know what you're talking about and provide plenty of "tangible" information...
+1
PackerAaron
May 23, 2011 at 03:23 pm
The fact that you are " igoring whether it’s fair" is the reason you can't square the circle with your "continue to pay coaches?" question.
And I disagree that the Packers "receive no benefit" from paying coaches now.
May 23, 2011 at 04:21 pm
Tough times call for tough decisions. Sometimes the best decision is not the "right" one.
But I think I would talk to the people affected by the pay cut and hear their thoughts before saying that they should feel slighted by this.
Maybe they do, maybe they don't. Let's hear it from the horse's mouth.
May 23, 2011 at 04:56 pm
Per PFT ....
"The Detroit Lions are the latest team to cut back, starting mandatory two week furloughs for team employees on Monday. The unpaid breaks will apparently include all employees, including the coaching staff."
The injustice of it all !! ..... Will it ever end ?? ....... LOL.
May 23, 2011 at 05:27 pm
Last I looked, this was a labor dispute .... There are no winners or losers ... Only participants .....
PackerAaron
May 23, 2011 at 07:53 pm
You're right - it's hilarious that people are being furloughed.
May 23, 2011 at 06:40 pm
I just want to watch football and follow the Packers.
PackerAaron
May 23, 2011 at 07:54 pm
A noble pursuit.
May 23, 2011 at 07:44 pm
Thank you PBR, someone who actually reads the Packers financial statements to make opinions. I suppose someone could look at the season ticket sales of luxury boxes, where the big money is made, see all the available options that are not sold out, and conclude that the collection of season ticket deposits is not going so well. And also read the terms of the sale, and what portion of the cash is refundable. I forgot the term accountants use for spending money before its earned.
May 23, 2011 at 08:53 pm
@Nagler,
I'm ignoring the morality aspect of cutting the salary because business decisions are inherently objective (or they should be). And if you disagree based on moral grounds then I cannot and will not fault you for that.
What benefit does the organization receive NOW by paying coaches NOW (when no work is taking place)? If they pay they receive the goodwill and possible extra effort by coaches because it shows loyalty; however, I see no tangible benefits (i.e., measurable productivity) of any sorts. Correct me if I'm wrong.
Regarding the luxury boxes, those sales are dipping. I read several articles that conveyed the Packers were seeking businesses to purchase tickets for boxes.
Simply put this is reflective of the harsh economic climate. I, for one, love our coaching staff and love the Packers but flat-out it just IS a business and needs to be managed like one. The reason we're in such good shape roster-wise, coaching-wise is because we are managed so efficiently top-to-bottom. Let's not forget that.
May 23, 2011 at 09:25 pm
Extremely well put!
I nominate you as the Paul Ott Caruth of the Packer Business Unit. Now put it into chalk talk and Nagler might get on board :)