An NBA commissioner walks into a Milwaukee bar, says “Why the long face?”

NBA commissioner Adam Silver went to Milwaukee yesterday, and ate custard! Okay, no, he didn’t. (Or maybe he did, but that wasn’t the headline.) What he did do was meet with the owners of the Bucks, city and county officials, and local business leaders about a new arena, and emerge with this statement:

“Feel very confident that these guys are gonna get it done. I think it’s absolutely doable. We’ve seen an enormous amount of positive energy in this community,” Silver said.

That may be the most noncommittal non-statement in the history of sports commissionerships, but really, it doesn’t matter what Silver said, because all commissioners have to do to heat up arena talk is to get on a plane.

My favorite bit about this Fox6 report on the head of a sports league endorsing the notion of getting new sports venues built with public money is that with Silver, Mayor Tom Barrett, and Milwaukee County Executive Chris Abele all speaking mostly in platitudes, they had to turn to someone else to go into more detail about the arena plan:

Rich Kirchen with the Milwaukee Business Journal tells FOX6 News that preferred site is the location spanning the UW-Milwaukee Panthers Arena and the Journal Communications building.

“The Bucks like that site. It’s pretty centrally located,” Kirchen said…

One potential idea is a so-called “jock tax” — setting aside the taxes NBA players already pay the state  and using them specifically for building the new arena. That could cover a $150 million loan from the state.

“It’s the one thing that has not been ruled out by Gov. Walker or the Republicans in the State Legislature. And they’re the ones who would ultimately give sort of, the high-level approval on something like that,” Kirchen said.

That’s right, not only is Rich Kirchen warning Milwaukee Business Journal readers about the “culture of caution” that prevents cities from throwing money at sports deals, but he’s actually being interviewed by other Milwaukee journalists as an expert on the Bucks arena plan. I hope that he next returns the favor and next writes a column interviewing the Fox6 reporters about what they learned about the Bucks arena plan from their interviews with stadium experts, until eventually all of the Milwaukee media crashes from a stack overflow.

(And yes, I’m aware of the irony of criticizing a journalist for being interviewed as a stadium expert when I get interviewed on this basis all the time. In my defense, I’d point out two things: 1) I wrote a book, at least; 2) I’d hope that no reporters are lazy enough to ask me to explain the state of arena talks instead of, you know, actually doing the reporting themselves.)

Billionaire Bucks owner says if state offers him $150m, he’ll take it as his due

Breaking news about the Milwaukee Bucks arena plan from the Milwaukee Journal Sentinel’s Don Walker, who as we know, never breaks news unless it needs to be broken!

Bucks co-owner Wes Edens open to idea of ‘jock tax’ to help build arena

Wes Edens, a co-owner of the Milwaukee Bucks, says the idea of a jock tax to help finance the construction of a new, multipurpose arena in downtown Milwaukee is a good starting point for coming up with a workable plan.

“I think that how we actually pay for it and what the form of the financing is and kind of all the technical nuances at some point will be very important,” Edens said in an interview with the Journal Sentinel. “To me it’s less important today than just the notion that, let’s just agree what’s on the table with the benefit of the team being in town. Once we have done that, we’ve got a really useful place to start the dialogue.”

Okay, so let’s take a closer look at what we’ve learned here. First off, the co-owner of the Bucks would be “open” to the idea of having the state of Wisconsin take all the income taxes that his employees pay and sending them directly to him. This is truly remarkable, as most billionaires when offered $150 million decline, saying, “No, no, I have plenty of money already.”

Second, Edens didn’t even actually say much specific about the jock tax, beyond generally endorsing the argument behind the Bucks getting to collect all of their employees’ state income taxes while lobbing an oblique move threat (“If the Milwaukee Bucks are forced to leave town because they don’t have an arena, those taxes are leaving with them”). His statement above makes clear that he’s not going to endorse any particular method of giving him $150 million, just that he thinks he deserves it, because of all the revenue that his team generates for the state. And as for those studies by economists showing that income tax receipts don’t change one bit whether teams are playing in town or not, hey, how many jobs have they created?

Business prof says Kings arena could bring MLS team, TV station gets all excited

What the what, CBS Sacramento?

Economists: Downtown Sacramento Kings Arena Could Pave Way For MLS Franchise

That … doesn’t even make any sense? Certainly Sacramento is vying for an MLS expansion franchise, along with everyone else on the planet, and maybe having successfully thrown a whole lot of money at the Kings would help convince the soccer league that they could have money thrown their way, too. But from an economic perspective, what does one have to do with the other? What kind of economists are these, anyway?

Sacramento State economics professor and Wells Fargo wealth adviser Sanjay Varshney says if that arena wasn’t under construction, there’s no way anyone would be talking about the possibility of an MLS stadium coming to the railyards.

“The fact that Sacramento succeeded in keeping the Kings here and are putting in a new arena will be a factor in whether or not we actually get soccer now,” he said.

So, first of all, that’s not economists, plural, it’s one economist. (No one else is cited by name in the CBS Sacramento story.) And second, it’s arguably not even one economist, because while Varshney does have a master’s in economics, he’s actually he’s a finance professor at Sacramento State’s business school, who recently stepped down as dean to work as an investment advisor for Wells Fargo’s wealthy clients.

Not that this makes Varshney unqualified to speculate wildly about how MLS will pick which cities to expand to, any more than any of the rest of us are. But hanging an entire story on this, and spinning it as something “economists” predict, is a low point even for TV news.

Back in the real world, meanwhile, MLS officials heard pitches from would-be owners in Sacramento, Minneapolis and Las Vegas for the last expansion team of the passel being handed out by the league this decade. A decision could be made by the league Board of Governors meeting on December 6, or not.

Wisconsin reveals that giving Bucks owners $150m in income tax rebates would make Bucks owners $150m richer

This just in! (Well, in on Friday afternoon, but nobody pays attention to the interwebs then.) Rich Kirchen has breaking news that according to Wisconsin state assembly leader Robin Vos, redirecting income taxes paid by Milwaukee Bucks players and employees could provide up to $10 million a year in funding toward the Bucks arena project, providing enough money to pay off $150 million in arena costs!

This is the first we’ve heard from Kirchen on the “jock tax” since July, when he reported that redirecting income taxes paid by Bucks players and employees could provide up to $10 million a year in arena funding. But then it was Gov. Scott Walker saying it, not Vos, so, you know, news.

So long as Kitchen is rehashing old stories, I think I’ll just quote what I said back in July about the jock tax idea:

This is revenue that Wisconsin is currently collecting, so it’s hardly free money. (Yes, it’s money that the state won’t collect if the Bucks move elsewhere, but then sports fans would just spend their entertainment dollars on something else, and employees of that something else would make more money and pay more income taxes, and so on, and so on.) So it’s really just a way of totaling up all the money that the state could credit to the Bucks, then rebating them by writing them a check equal to that amount. Except the players would still be paying the taxes, while the team owners would be getting the check. Nice work if you can get it.

Kirchen also says that an extra $150 million would more than provide the $100 million in public funding expected to be needed for the project — but given that the current price tag is from $400-500 million and the current budget goes $100 million from the Bucks, $100 million from former Bucks owner Herb Kohl, and $100 million from Mystery Investor #1 (possibly via a naming rights deal), the gap may actually be a fair bit more than that. But yes, the Wisconsin Legislative Fiscal Bureau has confirmed that if the state sends the Bucks owners a check for all the state income taxes that their employees are paying, then the Bucks owners will have a bunch more money. It’s magic!

WI speaker to Bucks owner: Quit hanging with Dems or my GOP friends won’t let you eat lunch at their table

Wisconsin assembly speaker Robin Vos is a Republican, and supports the Milwaukee Bucks owners’ attempts to get public funding for a new arena. So, he tells Milwaukee Business Journal, he was aghast when Bucks co-owner Marc Lasry appeared at a Democratic campaign stop with Barack Obama, because none of his Republican friends are going to want to give Lasry money now:

“If you’re looking to people for support, you certainly don’t want to poke people in the eye,” Vos told the Milwaukee Business Journal Wednesday.

Wisconsin representative Mandela Barnes, who is a Democrat and supports the Bucks owners’ attempts to get public money for a new arena, says this is unfair:

“Personally I feel that that just because the legislature is controlled by Republicans doesn’t mean it should only be open to republicans and their supporters. Marc Lasry expressed his freedom of speech and may now see the Milwaukee area and entire state of Wisconsin be held hostage,” Barnes said.

Wisconsin Gov. Scott Walker, who is extremely a Republican, has said he’d consider kicking in state tax money toward a new Bucks arena.

What are we arguing about again? Oh, right, whether or not Obama is evil. Carry on.

 

Milwaukee paper’s HQ could become Bucks arena site, reports Milwaukee paper

This could be interesting, to say the least: The Milwaukee Journal Sentinel, the Bucks owners’ best buddy in seeking a new arena, has emerged as the property owner whose site is being targeted by the Bucks for their new home:

The Milwaukee Bucks have their sights set on downtown property now occupied by Journal Communications, the UW-Milwaukee Panther Arena and the Milwaukee Theatre as the future home of a new, multipurpose arena…

Steven J. Smith, chairman and CEO of Journal Communications, said … that “speculation is ongoing that our Journal Square property would be part of the development of a new arena.” He indicated the company “is certainly willing to listen as the community moves to a consensus on what to do.” But Journal Communications employees, he said, “need to be located in a place where we can continue to be a relevant, meaningful company serving our community and state.”

We’ve seen something like this before in Minneapolis, where the Star Tribune’s coverage of the Vikings stadium battle was for years scrutinized because of the belief that the paper was looking to capitalize on the project by unloading its downtown property as part of the deal. (The paper eventually sold off its headquarters to another developer once the stadium deal was in place.) The Journal Sentinel headquarters is currently mostly empty, since its printing plant has been moved elsewhere and modern newspapers only employ a handful of whattaya call, reporters, so a Bucks arena could certainly be an alluring prospect for unloading their land. Or, if the price isn’t right, a reason to oppose the plan until it is.

Either way, this is even more of a reason to treat Journal Sentinel coverage of the Bucks plan with a grain of salt — though to be honest, if you didn’t already bring a king-size container of Morton’s to the table when reading it, you really should have been.

Bucks owner: I know where I want arena to go, and you don’t

Milwaukee Bucks co-owner Marc Lasry made Don Walker‘s heart go pitter-pat yesterday at a press conference by dropping hints that he knows where he wants to build a new arena:

“As soon as I know — well, I know, but I can’t say it so I apologize — but as soon as I can tell you, I certainly will,” Lasry said. “I think within the next 30 to 60 days we’ll know where the new arena is.”

Ooh, a tease! Time for everybody to hack into Lasry’s phone and see where it’s been the last month or so. Though it might be more useful to hack into his phone logs and see which bankers, or which city officials, he’s been talking to about where to get the money for this thing.

Lasry went on to talk about a bunch of other things, including a recent preseason game where he accidentally interrupted coach Jason Kidd’s postgame address, then decided, hell with it, I’m the owner, and went ahead and talked over Kidd anyway. This guy is fitting in already.

Bucks’ arena plans exactly where they always were, reports breathless Milwaukee newspaper article

Let’s see, what’s up with the Milwaukee Bucks these days, according to our old pal Don Walker of the Milwaukee Journal-Sentinel?

With deadline looming, shortlist emerges for new Milwaukee Bucks arena

Oh my gawrsh, there’s a deadline looming! Circle the wagons! Scramble the jets! It’s only a matter of time before—

With a self-imposed year-end deadline, the Milwaukee Bucks and others involved in the search for a proposed new downtown arena are zeroing in on a few specific locations.

…before the Bucks owners have to give themselves more time. Okay, leave the wagons where they were.

The rest of the article is just rehashed stuff that’s been previously reported, about how the Bucks owners are trying to zero in on a site first, then figure out how to pay to build an arena, which still seems a little backwards to me, but then, I’m not a mega-rich sports owner. (Also, it’s the kind of backwards that can work to their advantage, if they can pull off the “We know where we’re going to build it, now we just need to figure out how this inevitability will be paid for!” trick.) The best part, though, is this quote from an unnamed source about the site selection process:

“There is no sexiness north of the Bradley Center.”

You want context? You really don’t want context. This is the best thing you’re going to read in a Journal-Sentinel article about the Bucks arena plans for years, so just savor the moment.

Oakland gives Raiders another 90 days to turn pockets inside-out hoping stadium money falls out

You’re going to have to hold your breath a little bit longer to see any start at a resolution of the Oakland Raiders and A’s bipartite stadium battle: After the Raiders brought in some new investors to their Coliseum City vaportecture project, the Oakland city council last night voted to give the team a 90-day extension in which to finalize plans for a new stadium on the Oakland Coliseum site.

And that should be no problem, because as Newballpark.org points out, here’s all that Raiders owner Mark Davis has to work out to make his vision a reality:

  • Sign at least one tenant, preferably the Raiders to start

  • Engage the A’s and Warriors (even though neither team is interested)

  • Provide deliverables and reports that haven’t been completed yet (deal terms, financing, 2nd phase market analysis)

  • Bring in a master developer

  • Line up needed capital for stadium phase and ancillary development phases

  • Figure out who pays for the remaining debt at the Coliseum and Arena (if necessary)

  • Gather support of the JPA and Alameda County

Piece of cake! Three months is way more than enough time to win $750 million at Powerball, right?

 

Ratner puts debt-ridden Brooklyn Nets arena up for sale after just two years

Bruce Ratner, the developer who spent ten years buying the New Jersey Nets and then fighting a bitter court battle to tear down houses in Brooklyn to make way for a new arena and brought in a Russian billionaire partner to help pay the bills, is celebrating his ultimate victory the only way he knows how: by putting the arena up for sale.

Developer Forest City Ratner is marketing its majority interest in the Brooklyn arena that is home to the NBA’s Brooklyn Nets, seeking a buyer for some or all of its 55% stake in the building, according to people familiar with the matter.

An arena spokesman declined to offer details, but said in an email that “Our goal is to identify a strategic partner as we continue to capitalize on the great performance of Barclays Center.”

“Great performance” sounds nice when shopping the place around to buyers, but the fact of the matter is that the Barclays Center hasn’t done great in terms of its bottom line: It just about barely broke even in its first full year of operations, 2013, despite record-setting ticket sales. (The Wall Street Journal’s Eliot Brown, who earlier reported that the arena turned a tiny profit, now says that the arena reported a small loss in 2013.) And while arena revenues were up in the first half of 2014, they’re still well below projections, and not likely to improve significantly as the Nets honeymoon wears off and a trade war for concerts heats up with the newly renovated Madison Square Garden. (Yes, the Islanders arrive in 2015, but as we’ve seen elsewhere, sports teams often cost as much in lost concert revenue as they pay in rent.)

The reason for all this red ink? The $29 million a year in debt that Ratner saddled himself with, while turning over majority ownership of the arena’s biggest money-maker, the Nets, to Mikhail Prokhorov in exchange for more cash to feed the arena’s $1 billion construction budget maw. Even the most successful arenas don’t churn out that kind of profit margin year after year, which is no doubt one reason why Ratner is looking to cash out, though it’ll be extremely interesting to see what price he gets for a building saddled with $500 million in debt, not to mention Brook Lopez’s tender feet.

There’s much more, as you’d expect, at Atlantic Yards Report, including the observation that Ratner is really only selling operating rights to the arena, since it technically belongs to the state of New York in a complicated tax-dodge arrangement.

The big question remains, however: Why on earth did Ratner care so much about this project that he moved heaven and earth (and Daniel Goldstein), plus assumed half a billion dollars in debt, to make it happen? The man has never shown any interest in basketball, and ditched control of the team as soon as possible after the project was approved. There was the theory that the arena was a loss leader for getting hold of valuable Brooklyn land to develop with housing, but Ratner’s planned housing towers are doing even worse than the arena, though he’s still shopping around in China for investors. That leaves … wanting to drum up foot traffic for his mall across the street? Wanting to make even more of a name for himself in Brooklyn real estate, even if it’s not an especially positive one? Presumably he had something in mind all along — or maybe it’s just Hanlon’s Razor.