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      Debt, Toilet Paper, and Scandals: How the Green Bay Packers Became a Non-Profit
      Photo by Darryl Norenberg-USA TODAY Sports
      December 3, 2014

      Debt, Toilet Paper, and Scandals: How the Green Bay Packers Became a Non-Profit

      The Green Bay Packers are the only non-profit, community-owned professional sports team among the Big Four leagues. They are also an anachronism: not just a throwback to the NFL of yore, but with their 360,000 shareholders, owned in a way that was actually made illegal by the 1980s. Now, by rule, a team can have no more than 32 owners, and one person must own a minimum 30 percent stake in every franchise. The Packers were grandfathered in past this restriction, but the story of how this came to pass is one few know.

      The Packers did have true owners early in their history. But the team was on shaky ground from the moment it formed in August 1919. Earl "Curly" Lambeau and newspaper editor George Calhoun founded the franchise in an office of the Green Bay Press-Gazette, obtaining $500 from Lambeau's employer, the Indian Packing Company, to buy jerseys and equipment. This semi-pro squad, much like modern little league teams, took the name of the "Packers" from their sponsors. A year later, the Packers were nearly out of business as the floundering Indian Packing Company was bought out by the rival Acme Packing Company.

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      Lambeau, however, convinced Acme's owners, John and Emmitt Clair, to pay the $50 franchise fee for the Packers to join the fledgling American Professional Football Association, soon to be known as the National Football League.

      Like most early NFL franchises, the Packers occasionally filled their roster with still-active collegiate players. Such acquisitions were seen as perverting the amateur ranks, and the NFL wanted to keep itself in the public's good graces. At the owners' winter meeting held in Canton, Ohio in early 1922, Packers owner John Clair admitted to using members of Notre Dame's football team under false names. As a result, he willingly offered to withdraw his franchise from the league. Seeking a scapegoat for a brewing scandal (sound familiar?), the NFL owners voted to eliminate the team for the violation and refunded Clair his $50 franchise fee. The Packers were no more.

      Five months later, Lambeau and the Packers were back. With Chicago Bears owner George Halas smoothing the path, Lambeau appeared at the next owners meeting and plopped down $250 to bring the Packers back to life…as the "Blues" (despite officially renaming the team, no one would ever refer to them as the Blues). Lambeau was the "new" team's owner—and soon to be its last.

      In the Blues' 1922 season, an overabundance of rain diminished attendance, and the team racked up a $2,500 deficit. To the rescue came A.B. Turnbull, publisher of the Press-Gazette. Along with three other area businessmen, Turnbull erased Lambeau's debt. The five men decided to turn the team into the non-profit Green Bay Packers Corporation, and at a local Elks Club, made the first public offering of Green Bay Packers stock. They sold one thousand shares at $5 each (attached to which was a stipulation that each stockholder must purchase six season tickets) and the team was rescued from ruin.

      The NFL, which was itself struggling to survive, did not prevent the stock sale. Lacking a true owner—and later forbidding any stock purchaser from gaining a majority of team stock to take such control—the 1920s Packers relied solely on its fan base of 31,000 citizens for its existence.

      Green Bay Packers stock certificate. Photo via WikiMedia Commons

      In 1925, the city of Green Bay banded together to build the Packers a permanent home. The result, City Stadium, was constructed out of wood behind a high school. The Packers posted a 30-4-4 home record in their first six seasons there, and won their first two championships in 1929 and 1930. But City Stadium would also nearly be the device by which the Packers died.

      During the second game of the 1931 season, an easy 32-6 win over the Brooklyn Dodgers, a man named Willard J. Bent leapt to his feet along with the other 7,000 fans in attendance to cheer. When Bent attempted to sit back down, something went awry and he fell some eight feet to the ground below the grandstand. While the Packers went on to win their third straight championship in 1931, Bent suffered through numerous injuries, including two cracked vertebrae.

      Just prior to the start of the following season, Bent sued the Packers over the incident. His attorney claimed the Packers were negligent in the construction of City Stadium, at one point even bringing a section of the wooden bleachers into the courtroom for the jury to examine. The claim was that when fans rapidly stood up to cheer the action on the field, the stands would physically move. It was during this movement that Bent unknowingly attempted to sit back down on a bench that was no longer where it should've been, and fell. He sought restitution.

      The Packers were quick to counter. First their legal team argued that City Stadium wasn't even theirs—it was the property of the school board. Then they claimed there were no construction issues with the bleachers; that fans improperly stood on footrests during the contest, and the team was unaware of such dangerous practices. Truly, the Packer claimed, it was Bent who was negligent. By purchasing a $1 general admission ticket (as opposed to a $2, $1.50, or $1.25 ticket) Bent indicated that he understood the potential dangers of the seat. Plus, the Packers were a charitable organization. It should not be subject to such damage claims.

      The jury found in favor of Bent. They believed that City Stadium was indeed unsafe. Bent was awarded money for medical bills ($800), loss of wages ($4,500), and every personal injury attorney's favorite claim—"pain and suffering"—which for Bent amounted to a whopping $200. The $5,500 (worth approximately $100,000 today) was a huge sum for both plaintiff and defendant. This was the height of the Great Depression. The amount actually bankrupted the Packers' insurance company. This forced the team to pay the settlement itself, increasing its debt load to nearly $10,000 and forcing it into receivership.

      Many, including Lambeau himself, felt the Packers' days in Green Bay were numbered. They looked to moving the franchise to Milwaukee, something that was seen as inevitable even prior to Bent's lawsuit. The Packers had already begun playing regular season games there, and the NFL was pressuring for a permanent move to the bigger city because of the team's financial woes.

      But the Packers saving grace came in an unlikely form: toilet paper. Despite the Great Depression ravaging the nation in the 1930s, Green Bay's economy thrived due to its paper mills. Between 1925 and 1935, the city's production of toilet paper doubled. Soon, Green Bay became known as the toilet paper capital of the world. Not content with that dubious title, business leaders in the area pressed to keep the Packers both afloat and in the municipality. Much like communities do today when they decide to spend millions of tax dollars on publicly financed stadiums, Green Bay saw the team as a calling card, a way to make the small town seem like a big city.

      So, in 1935 a second stock offering was made and the community responded. In a drive to "Save the Packers," more than $15,000 was raised, more than enough to pay Bent and settle the team's outstanding debts. By 1937, the team was out of receivership.

      This move also reorganized the franchise into the modern Green Bay Packers, Inc. which locked the team into the city. Because the team's stock is non-profit, any effort to relocate the team would require a "yes" vote from a majority of the stockholders. In the original corporate language, if the team were to be sold—a huge "if"—all the profits would have been slated to go to a local American Legion post to build a "proper" soldiers' memorial. In 1997, that was changed so proceeds from any such sale would benefit the Packers' charitable foundation. The only chance of the team leaving town would be via bankruptcy. The Packers did find themselves on the brink after World War II, but the city came to the rescue with another stock offering, raising $125,000 to keep the Packers up and running.

      Today, the Packers are split into just over 5 million shares, held by those 360,000 people. The population of Green Bay is only about 104,000. No one person can hold the city up for ransom, threatening to move the team, or making demands upon the government. When improvements to Lambeau are needed, stock holding fans will (or won't) make them happy.

      And although Packers stock is in many ways worthless—it cannot appreciate in value, there are no dividends paid out, and owning shares doesn't even guarantee a stockholder a ticket—it is also a symbol of an ideal, unlikely system, and all the accidents of history that led to its entrenchment. 

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