How rich are the Bucks and Brewers owners getting off public subsidies? Not as much as you’d think

Bruce Murphy of Urban Milwaukee has almost certainly spent more time looking into that city’s subsidies to the Bucks and Brewers than any other person alive, and this week, with the new Forbes MLB team value estimates out, he devoted his column to trying to figure out how much more rich those taxpayer dollars have made the teams’ owners:

Forbes estimates the value of the franchise is now $1.35 billion, up by $900 million since the team was purchased for $450 million in 2014. (The price was technically $550 million but previous owner Herb Kohl promised to pay $100 million of the team’s contribution to a new arena.)

That’s a stunning three-fold increase in the value of the franchise in just five years…

[Brewers] owner Mark Attanasio bought the teamfor $223 million in 2004, and the current value, according to Forbes, is now $1.175 billion. That’s a five-fold growth in value in 15 years. That increase has helped the team, which ranked last in value before Miller Park was built, jump to 25th in value, ahead of six franchises including those in bigger markets like Miami and Cleveland.

I’m sure you’ve already spotted the problem here: Sure, both the Bucks and Brewers are worth a lot more since getting new publicly subsidized homes, but how much of that is due to the buildings, and how much just to the fact that MLB and the NBA are rolling in money from things like cable TV and streaming video revenue?

Here’s Forbes’ estimates for Bucks team value and gross revenue over time:

As you can see, there’s certainly been a jump in both over the four years since the stadium was approved in 2015 — though, interestingly, the jump in value started the year before the arena was approved, and revenues began to take off well before the new arena opened last summer. Annoyingly, Forbes doesn’t offer charts for the average NBA team, but let’s take a look at a couple of other smallish-market NBA teams without new arenas for comparison. First, the Denver Nuggets:

And the Minnesota Timberwolves:

Those are about as close to identical charts as you’re going to see. And while they don’t prove that the new Bucks arena has been worthless to billionaire owners Marc Lasry and Wes Edens, it’s also pretty good evidence that most of their current basketball riches would have been achieved even if the team had kept playing at the Bradley Center.

Okay, how about the Brewers? The Forbes charts don’t go back to before Miller Park’s opening in 2001, but their archived team valuations at Rod Fort’s sports economics stats site do, so we can do similar value comparisons for small-market baseball teams that did and didn’t get new stadiums in that time period:

Milwaukee Brewers: $1.175b (2019), $167m (2000) (up 604%)

Baltimore Orioles value: $1.28b (2019), $347m (2000) (up 269%)

Colorado Rockies: $1.225b (2019), $305m (2000) (up 302%)

Cleveland Indians value: $1.15b (2019), $364m (2000) (up 216%)

Kansas City Royals value: $1.025b (2019), $122m (2000) (up 740%)

This looks a bit more promising for the Brewers owners (now not-quite-billionaire Mark Attanasio, then a fetid pile of hypocrisy in an ill-fitting suit), though it’s worth noting that the Royals owners did even better playing in a stadium that opened in 1973, though it did get a bunch of taxpayer-financed upgrades in 2009. (It’s also worth noting that the Orioles, Rockies, and Indians were in the midst of new-stadium honeymoon periods in 2000, so probably in a bit of a value bubble.) Mostly it’s an indication that the entirety of MLB is rolling in dough, and while having a new taxpayer-funded stadium can certainly put the cherry on top, it’s not going to make the difference between obscene wealth and merely PG-rated wealth.

So, wait, does this mean that new sports venues aren’t such a scam after all, because they’re not enriching greedy sports team owners? No, actually, it makes them worse: Greedy sports team owners, it turns out, are mostly just getting a slim trickle of new money thanks to the firehose of public spending — which makes sense, since the construction costs of new stadiums and arenas soak up most of that cash. Sports subsidies are not just a massive transfer of cash from public to private; they’re a massive taxpayer expense where much of the benefit just goes to construction companies, while the team owners who pulled off the schemes just collect a few dimes on the public dollar. It would be far more efficient, all things considered, for local governments to just pay team owners money to play in their cities, and skip the whole stadium-building part of it — but then, we’re seeing that now too, so I guess why limit yourself to one grift when you can run two?


5 comments on “How rich are the Bucks and Brewers owners getting off public subsidies? Not as much as you’d think

  1. Didn’t the Royals value shoot up, not because of the stadium, but because of the 2014 World Series appearance and 2015 Championship?

  2. State of the art stadiums have always been a protection against down periods. You should know this, Neil.

    • Then they aren’t working as intended. The down periods come (and are every bit as ‘down’) even with new stadia.

      Is this some sort of (equally well debunked) trickle down theory where governments are supposed to hand tens of millions to people who are already rich because they might offer $200 year end bonuses to their housekeepers with that money?

    • This would only be true if these stadiums were made of gingerbread and we could feed it to the people starving during those down periods.

  3. This is really tremendous news. We now have actual proof that our capitalist society – which once railed against the unproductive use of capital in the USSR and other “backward” nations – is now paying people to dig holes and then paying other people to fill them.

    The only material difference is that we pay massive companies to tear down perfectly good buildings (in many cases, not all) and then other (generally more massive and inefficient) companies to build replacement stadia that are often smaller and generate the same (or sometimes less) revenue than the allegedly antiquated ones they superseded.

    Our holes are just massively more expensive than theirs.