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Packers shareholders and a lockout

2/16/2011

It's landed in the mailbag, descended on our weekly chat and been a topic over on our Facebook account. All were variations of this note from D. Rocket of Portland:

I understand the Green Bay Packers are publicly held and there's a board, etc... If NFL owners vote to a lock out, is GB forced to lock out too? I mean, is it a majority rules type thing? If stockholders tell Mark Murphy "No Way" on a lockout does he have to follow the other NFL owners or can he just say, "No Way" and open the facility? I'm not saying they would play games, but do they have to participate in a player lockout? I don't fully get how much autonomy Green Bay can exercise based on its unique ownership structure.

The answer in this case, I'm afraid, is very little. There is virtually no chance the Packers could or would opt out of a lockout.

There are 112,120 Packers shareholders, and they truly experience a unique privilege. They have more access to the inner workings of the franchise than any other NFL fan base, and the team's top leaders are obligated to be accountable through shareholder meetings and related Q&A sessions.

Those who own stock also technically have voting rights, but they couldn't force a lockout decision on Packers management any more than they could demand a specific draft pick or determine the future of a coach.

The team's corporate bylaws call for shareholders to elect a Board of Directors. In turn, the Board selects a seven-member Executive Committee to operate the franchise. Murphy, the Packers' president and CEO, is hired by that committee. According to the Packers' media guide, the committee "directs corporate management, approves major capital expenditures, establishes broad policy and monitors management's performance."

So a shareholder petition, or even a straw vote, couldn't impose a lockout opt-out on Packers management. Theoretically, in order to effect that stance, shareholders would have to find a way to ensure the Executive Committee had a majority consensus on that issue. Most likely, they would have to elect new directors, which typically happens at the summer shareholders meeting. The new directors would then would select new Executive Committee members based on their position on the lockout. In other words, you would have to have a highly unlikely coup d’├ętat.

(Sorry. I've always wanted to figure out a way to get that phrase into a sports blog post.)

The second part of this question is less administrative and more philosophical. We know why the NFL's 31 individual owners would call for a lockout: To keep more revenue for themselves. But neither Murphy nor the Packers' Executive Committee would benefit financially from a change in the NFL's revenue distribution structure. So what is Murphy's motivation to go along with a lockout?

Ultimately, the Packers' existence is based on the success of the entire league. The Packers earn some local revenue through Lambeau Field, but like every other team, their largest source of income is the share they receive from the NFL's television contracts. The future of the Packers depends on the NFL maintaining that structure, and the future of that structure requires the NFL remaining a profitable business.

Murphy is a member of the NFL's Management Council Executive Committee, so it's safe to say that he believes independently that the league and its players must realign their revenue distribution system to achieve those goals. But even if he didn't, Murphy and the Packers wouldn't be wise to go cowboy against a league whose business model is the primary reason the Packers have continued to exist in a league otherwise comprised of big-city franchises and deep-pocketed owners.

This is not to demean the Packers' citizen ownership in any way. It's real, unique and comes with genuine privileges. But making big-picture decisions for the franchise isn't one of them.