Bucks owners to Milwaukee: Fund arena or big bad NBA will take your team away

With economists savaging their plan to seek $200-300 million in public dollars for a new basketball arena, and voters not much happier with it, Milwaukee Bucks owners Marc Lasry and Wes Edens had to do something to jumpstart their plans. So, speaking to reporters and Rotary Club members yesterday (yeah, I don’t get it either, just go with it), they pulled out the big guns:

“The problem we have is in our agreement with the NBA if an arena is not built, the NBA has the right to take the team back,” Lasry said. “I think we’ve got three or four years to do that. So we’re under huge pressure to do it.

“Wes has said it and I’ve said it: There are no other alternatives,” Lasry said.

So, really, if Milwaukee doesn’t come up with money for a new arena, the league is going to take the Bucks from Lasry and Edens and … do what with it, exactly? Sell it to owners who’ll move it? Hang onto it and see if the league can be any more successful at shaking down local politicians for arena money? Come on, Rich “Culture of Caution” Kirchen, we want to know the answers to the big questions!

I asked Lasry later Monday morning whether the NBA required the “buy back” clause in the Bucks transaction and he said “yes.”

“It was what the NBA wanted,” Lasry told me.

Sigh. I guess “Is Bad Cop making you threaten us with this?” is technically a question, but it’s not the one I would have led with, you know?

Anyway, none of this is really new — the buyback clause has been public knowledge since April — but it’s now more clear than ever that “Don’t make Adam Silver mad, who knows what he’ll do?” is going to be Lasry and Edens’ main negotiating tactic. I’d still like to see a Wisconsin journalist try to investigate whether Lasry and Edens (and former Bucks owner Herb Kohl) conspired with the NBA to insert this buyback clause, but so long as Wisconsin journalists think that “investigation” means asking the team owners “Are you co-conspirators?” we’re probably not going to get much of an answer.


19 comments on “Bucks owners to Milwaukee: Fund arena or big bad NBA will take your team away

  1. It makes logical sense that the NBA would’ve forced the buy back clause. Edens & Lasry bought the team for $100 mil less than was being offered by a group who wanted to move the team to a failed NBA city. Without the buy back clause there’d be nothing to prevent Edens & Lasry from flipping the team when the lease is up in 2017.

    Where I do think that Kirchen and others are being shabby journalists is in the way they frame the buy back clause. It was ostensibly put in there to protect Milwaukee and the NBA from Lasry & Edens.

    On the economic impact of the arena, the city already levies $27M/yr in hotel/rental car/restaurant/bar taxes for an underused, undersized convention center, a redundant 4,000 seat theater and the old arena that was last used by the Bucks in 1988. Seems to me that money would have a far more positive economic impact if it were redirected towards keeping the Bucks in town.

  2. Ben, is that $27m a year going to pay off old bonds, or operating expenses, or what? I’m all for defunding convention centers, but getting rid of old buildings isn’t always as easy as just cutting off the checks.

  3. @SierraSpartan,
    actually, many of those Seattle fans might be nervous that it’s not being thrown around as a May 15, 2015 deadline for significant progress anymore.
    http://www.sonicsrising.com/2014/6/5/5778430/sources-could-the-milwaukee-bucks-be-moving-2016-season

  4. I really hope Milwaukee doesn’t fall for it. I’d like to be able to move there some day.

  5. mp34: Clearly you should be demanding that the five-county region buy you a house.

  6. I assume no one at the Rotary Club responded with, “Then I guess you should build a new arena if you don’t want to lose your team.”

  7. Where is this deadline, in writing? I’d like to see it.

    Why do I ask this question? Because I think someone is bullshitting.

  8. Sacramento City Council votes tonight on whether to spend $750,000 on lawyers fees to defend themselves in court or not.

    I think we might see a ruling on SB743 at some point in the next few weeks, possibly this week. On the face of it, the 270-day rule doesn’t seem enforceable to me.

    I also wonder if there are any experts on LEED certification in your readership as well. Can you receive LEED certification of any sort prior to construction of a building? Who issues LEED certificates? Isn’t it possible to lose your certification years after receiving it? I’m just wondering if it makes sense that a party would qualify for expedited CEQA lawsuit processes for a certificate you can’t get until after a building is erected. Are there penalties in 743 if the building comes in at less than LEED Gold? Who would enforce that? For how long?

  9. Neil

    The buy back clause is basically the same thing that Sacramento was faced with. Either build an arena or we buy the team back from you and move it to Seattle. The league is basically saying that we’d prefer to be in Seattle as opposed to Milwaukee or Sacramento but we don’t want any more relocations either so we’ll make a deal. Build an arena and you keep your team forever or we get to return to Seattle. No shakedown, no attempt at getting public money that Lasry and Edens couldn’t get….just a flip and subsequent sale to Chris Hansen.

  10. I did a little research and answered my own questions about LEED. I’ve concluded its basically BS, and (this is where Neil should be interested) entities are getting large tax breaks for doing things USGBC requires for certification.

    This article has some good examples:

    http://www.usatoday.com/story/news/nation/2012/10/24/green-building-leed-certification/1650517/

    In a nutshell, California fell for it too… In fact, they fell for it in probably the worst way any State has. What a scam.

    I hope SB743 gets tossed.

  11. Is it possible that people may soon realize that sports are completely insignificant in the grand scheme and that this epiphany, will negate owners of teams to extract funds from the tax coffers?

  12. Neil,

    About $9 million/year of that $27 million goes to pay off the construction bonds on the convention center. The theater and old Bucks arena are paid off as best I can tell. I’m sure that there would be some cost involved with selling or razing those three buildings, but still think there’d be enough left over to give the Bucks half an arena.

    I’ll find the 2013 financial statement for you.

  13. Hansen isn’t building an arena in Seattle without an NBA team, and AEG has shown no interest in giving any kind of team a sweetheart deal in Kansas City. Other than that…

  14. Milwaukee is a great city. The Bucks have a long tradition there. Its true that ratings are low, very low, and the team doesn’t have much of a following after being in a down period for a number of years. But the team should stay.

    But the situation regarding NBA teams, indeed all pro teams, has changed. When the Kings sold for $500 million and the Clippers for $2 billion, both teams with long histories of sustained failures on the court, it raised the values on all other teams. The Bucks are a valuable team. Very valuable. Let the team take the loan out against value and build their own stadium. Can’t claim poverty when your held assets are worth close to a billion dollars.

  15. I just keep wondering how much the Warriors will be worth in San Francisco.

    Probably enough to make Chris Cohan want to hurt himself.

    Meanwhile, in Sacramento, a third lawsuit to stop the arena has been filed, and SBH has announced it’ll start demolition in late July.

    I just have a feeling an injunction to stop that will be here before that time; probably just minutes before that time.

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