Another football season is upon us, and the Hanson & Payne team is ready to don our green and gold. While every good Packer fan knows they are the only non-profit, publicly-owned professional sports team in the country, few know that bankruptcy played a role in helping the Packers adopt this organizational format.
According to official Packers’ history:
While the Packers were in the process of winning the 1931 championship, they also were blindsided by what could have been a catastrophic event. In their second game, against the Brooklyn Dodgers, a local fan, Willard J. Bent, injured his back when a section of bleachers at City Stadium collapsed, and he fell nearly 10 feet to the ground.
Bent sued the Packers and was awarded roughly $5,000 following a trial in February 1933. With the country in a deep depression, the Packers’ insurance company went into bankruptcy before the claim could be adjusted, and the Green Bay Football Corp. went into receivership while it appealed the case in court.
Somehow the Packers survived the proceedings long enough to be saved, once again, by two seminal events.
The first was the creation of a new corporation, The Green Bay Packers, Inc., in January 1935 following a second stock sale. That corporation remains in existence today, although “The” was removed from the name in 1997.
The other was the signing of Don Hutson less than a month later.
As we frequently point out, the bankruptcy of one business often causes a chain reaction. Who knows how many businesses were impacted when the Packers’ insurance company filed for bankruptcy. It is unlikely that other impacted businesses were as lucky as the Packers, who had a friendly receiver helping the team deal with the legal side of its financial issues, and a devoted fan base that was willing to bail them out.
In the 1950s, the Packers were once again on the brink of bankruptcy. Another stock sale, and the insurance payout from a suspicious fire at the infamous Rockwood training facility, kept the team afloat.
Today, the team is valued at $3.475 billion. It is nowhere near bankruptcy, but it is interesting to note that filing for bankruptcy would probably be the only way the team could ever leave Green Bay. The team’s unique ownership structure means it is a permanent fixture in the community. If it were to file bankruptcy, the proceeds remaining after assets were sold off would go to the Packers’ charitable foundation. Stockholders would not get any financial benefit from the sale.
The Packers are unique. (And they are going to stay that way. NFL teams are now limited to a maximum of 32 owners, and one person must own at least 30% of the team.) We can’t think of any other business that has the community support needed to avoid bankruptcy in the same way. Fortunately, the modern bankruptcy system provides a secure safety net. If your business is struggling, you can count on the Hanson & Payne team to get you across the end zone. Please contact us today to schedule an initial consultation.