Former U.S. Senator Herb Kohl announced yesterday that he was selling the Milwaukee Bucks to a pair of New York hedge fund billionaires for $550 million, that he and the new owners would each be pledging $100 million towards a new arena, and that a condition of the sale is that the team will remain in Milwaukee.
All of the above is true. All of the above is also not exactly true. Here’s why:
Marc Lasry and Wesley Edens, the very very rich guys who will be the new Bucks owners, are indeed buying 100% of the team from Kohl, for a price that’s well above Forbes’ $405 million estimate for the team’s value. And while Forbes has a history of undervaluing teams compared to their eventual sale prices, there’s a bit of sleight-of-hand here: Because Kohl is kicking in $100 million toward an arena for a team he’ll have nothing to do with, this can equally be looked at (aside from some tax implications) as Lasry and Edens buying the team for $450 million, and pledging $200 million toward an arena.
Now, about that arena. News reports all say that Kohl made it a “condition of the sale” that the team remain in Milwaukee, but also all indicate that a new arena is a condition of that condition — meaning what he’s actually demanded is that Lasry and Edens continue his policy of promising to stay in town so long as a new arena is built, largely with public money. In fact, Kohl made that explicit in an interview yesterday with Milwaukee Journal Sentinel reporter Don Walker:
“Ultimately, if we don’t get to a new arena, yes, we will lose our team,” Kohl said. “The money will go away.”
That $200 million combined “pledge,” then, can equally be looked at as a demand for the $200-300 million in money that would be required to pay for the rest of the arena — or else.
Milwaukee chamber of commerce president Timothy Sheehy made an unspecified promise yesterday that “there is more private-sector money coming,” but far from being a “game-changer” as Walker insisted in his lede, this is pretty much the same game as always: The Bucks have owners who say if they don’t get public subsidies for around half the cost of a new arena, they’ll threaten to leave town. The only thing that’s changed is the names of the owners, and their ages (Lasry and Edens are in their early 50s; Kohl is 79). “Milwaukee Arena Shakedown: The Next Generation” isn’t quite as boosterishly sexy a headline as this, but it’d be a more honest one.