Cheeseheads, Unite

The Green Bay Packers are the envy of the NFL, but for more than their undefeated record. They are also self-funded. When the Packers need money for stadium improvements or to get them through a rough patch, they simply turn to their fans—who also happen to be owners.

Green Bay is the only team in the league that is owned by its fans, dating back to 1923. It has sold shares four times in its history and today is owned by 112,205 fans. On Dec. 6th, the team launched its fifth stock sale—its first in 14 years—to help pay for improvements at Lambeau Field, the stadium named for the team's legendary manager (not a promotion-hungry corporation).

Shares are being offered for $250 a piece, with a $25 handling fee. The shares do not earn dividends. Nor can they be traded, and they will not appreciate (or depreciate) in value, other than on the collectibles market. Nonetheless, the official Packers web site, packersowner.com, was deluged with fans buying—and crowing about—their new shares.

"I'm an OWNER!!!!!!! One of the BEST days of my life......" wrote a fan who goes by the name CHEESEHOUND on the site.

For some investors, that may seem like a raw deal with little pay-off. And perhaps the Packers should be offering some sort of upside or profit participation (although technically the team is a nonprofit). But fans—and all of Green Bay—benefit in very real ways.

For one, there is the revenue that a popular team brings to the area. In 2009, the Packers and Lambeau Field contributed approximately $141 million in economic benefits to Brown County, where Green Bay is located, as well as 760 jobs and $80.6 million in wages, according to an economic impact study. That's in addition to $5.7 million in taxes to local and state coffers (see a pdf of the study here).

And the community-ownership structure has ensured that the team has stayed put in a small town, rather than follow the money to a glitzy new home like so many sports franchises have done. A big reason is a clause in the team's articles of incorporation that stipulate that, if the team were to be sold, any profits would go to the Green Bay Packers Foundation, which makes donations to charities and institutions throughout Wisconsin. That has effectively stymied any attempts to cash in.

Ownership by fans may also account for the extreme loyalty inspired by Green Bay, where the open-air stadium is regularly packed with "cheeseheads" despite freezing temperatures. (The new funding will help pay for seating for an additional 7,000 people).

Finally, while the fans may be largely funding their team's capital expenses (the Packers also have a bank loan and government incentives that help pay for the current round of stadium improvements), at least it is voluntary. Most major sports franchises end up wrangling millions of taxpayer dollars to build or refurbish stadiums. In fact, taxpayers frequently foot the bill for these boondoggles whether or not they ever step foot inside the new stadiums or can afford their luxury-priced seats. And often the debts drag on for years. A New York Times article last year examined how New Jersey residents are still paying for the old Giants stadium, which carries $110 million in debt even after it was demolished to make way for the new Meadowlands stadium.

Often, the publicly-funded stadiums are used to steal a team away from their home. As the Times article explains: "politicians and business leaders pushed for taxpayer-financed stadiums to lure teams. To name a few, New York built Shea Stadium for the expansion Mets, Atlanta put up Fulton County Stadium to lure the Braves from Milwaukee, and Oakland built a stadium to entice the Athletics to move from Kansas City, Mo."

So, Packers fans may not get rich on their shares, but this little town of 100,00 still has a team to call its own. As Wikipedia reminds us, "Today 'Green Bay Packers' is the oldest team-name still in use in the NFL, both by its nickname and by virtue of remaining in its original city."

By the way, you don't have to be a cheesehead or even a sports fanatic to benefit from community ownership. Today the model is being applied to everything from department stores to renewable energy projects—with winning results.  Now that's something to root for.