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?

Friday roundup: Rays stalling on St. Pete stadium talks, Marlins tear out seats to please millennials, Raiders stadium maybe delayed or maybe not

Happy baseball season! Or not-so-happy baseball season, as Deadspin reminded us in two excellent articles this week, one on all the ways from bag-check fees to card-only transactions that teams are using to separate fans from even more of their money, the other on how fans were stuck on endless lines to get into stadium on opening day because of things like paperless ticketing apps that kept crashing. And on those cheery notes, the rest of the rest of the week’s news:

Friday roundup: SF doesn’t want Raiders, Spurs hate Tottenham, Rays outfielder says team has “no fan base” and should maybe move

It was a bit of a slow holiday week, but the news that there was made up for it by being extra-entertaining:

  • The Oakland Raiders played maybe their last game in Oakland, at least until the next time they move back to Oakland. (Hey, it’s happened before.) Still nobody has a clue where the team will play next year, but San Francisco officials are already gearing up to block any Raiders games at the Giants‘ AT&T Park, saying they don’t want to be “scabs” in the city of Oakland’s lawsuit against the Raiders for skipping town that prompted this game of stadium chicken in the first place. This is looking like a better and better option.
  • The New Jersey state legislature is preparing to help out the horse racing industry by providing $100 million over the next five years to goose winnings, which seems like exactly the opposite of how gambling is supposed to work.
  • Tottenham Hotspur still can’t get its new stadium open — the earliest possible date is now in February — but that’s not stopping team officials from griping that the surrounding neighborhood is too dirty to go alongside its fancy new stadium thanks to “litter and fly-tipping.” According to one borough memo, “When the question of all the extra cleaning needed was raised and who would fund it it was made very clear that it would not be paid for by Spurs.” The estimated cost of added street cleaning would be £8,000 per match; the team’s most recent annual profit was £58 million.
  • I love interactive fiction and have even written some myself, so I’m inclined to like this Arizona Republic article presenting the Suns arena showdown as a Choose Your Own Adventure book. But sadly its plot relies on some misconceptions — allowing the Suns owners to break their lease in 2022 doesn’t necessarily mean the team will leave, and if they do leave the city’s estimates of $130-180 million in renovations to keep it “competitive” for concerts may be overblown — so I won’t be voting for it for a XYZZY Award.
  • Some details have been released about plans for a Portland baseball stadium, but none of them involve how the stadium would be paid for or how much rent it would pay to its public landlords or even where a team would be obtained, so feel free to skip reading the full documents unless you’re really interested.
  • Tampa Bay Rays outfielder Tommy Pham was asked what he thought about playing in his new home city after being traded last year from St. Louis, and replied, “It sucks going from playing in front of a great fan base to a team with really no fan base at all.” Pham added, “Do I think something has to happen, whether it be a new ballpark, maybe a new city? I think so.” I am going out on a limb to guess that attendance will probably not be great next year on Tommy Pham Bobblehead Night.
  • The Milwaukee Bucks arena has been open for “several months” now, according to the Milwaukee Journal-Sentinel, which apparently can’t count to four, and the most important takeaways are that: 1) kids like candy, 2) grownups like cheese-covered sausages, 3) everybody likes taking selfies, 4) Bucks president Peter Feigin also likes candy, and 5) nobody actually wants to sit in that ridiculous Panorama Club. No reports back yet on the status of the magic basketball.

Bucks owners blame NBA for move threat that they themselves probably concocted

After Pittsburgh Penguins owner Mario Lemieux threatened to move to Kansas City if he didn’t get a new arena, then got a new arena, he admitted that it was all just a bluff to shake down the city for public money. Which may not have been a great look, but it was belatedly honest, and had the benefit of making him look less like a carpetbagger (if more like an extortionist).

The Milwaukee Bucks just opened their new arena that was built with $505 million in public money obtained under threat of the team leaving, and team co-owner Wes Edens has forgone Lemieuxesque mea culpas in favor of doubling down on those threats — but, in a twist, saying it was never the team owners who wanted them to leave, it was the NBA:

“Either the team had to build a suitable venue that’s appropriate for the NBA or they had to move,” Edens told USA TODAY Sports.

When Lasry, Edens and ownership partners bought the Bucks for $550 million in 2014, the purchase agreement included a clause allowing the NBA to buy back the team for a potential relocation if the new owners didn’t get a formal arena construction plan in place.

That makes it sound like the NBA made the buyback clause a condition of the sale, which is certainly the way Edens and his fellow owner Mark Lasry painted it back in 2014. But it was almost certainly something that was negotiated by all parties as a way of shifting the blame, as I wrote at the time:

This is, frankly, totally brilliant, in an evil genius sort of way. The NBA would never forcibly seize a franchise without its owners’ consent, so rest assured that this whole buyback clause was arrived at with the full cooperation (if not at the behest of) Edens, Lasry, and Kohl. Now, though, Edens and Lasry are in a perfect position to play Good Cop: We want to stay in Milwaukee, but that mean old NBA will take our team and move it somewhere else if we don’t get a new arena, so you’d better make that happen or else Adam Silver will nail your head to the floor.

To my knowledge, no Wisconsin reporters have ever dug into whether the NBA move-threat clause was a conspiracy with the Bucks owners or not, which is a shame. It’s too late for Wisconsin residents to get their $505 million back, but it’s not too late to stop Edens and Lasry for shifting the blame on why it happened.

NBA commissioner: The business of America is America’s sports business

The Milwaukee Bucks‘ new arena had a ribbon-cutting and open house this weekend, and there are lots and lots and lots of slideshows and quotes from Kareem Abdul-Jabbar online if you’re interested in that sort of thing, but I would like to focus on just one quote, from NBA commissioner Adam Silver:

“I have to say government works in Milwaukee.”

Yep, that’s what the leader of North America’s most self-consciously woke sports league had to say about an arena approval process that involved spending around half a billion dollars in public money over the objection of pretty much everybody in the city by employing the promise of a magic basketball while hoping nobody would notice that the otherwise virulently anti-tax governor’s fundraising chair was a co-owner of the team, then giving additional subsidies to a company that then turned around and used the cash to buy naming rights for the arena, money that will all go to the Bucks owners, not the public. But it all ended with government building an arena for Adam Silver’s business partners with somebody else’s money, and that’s what democracy is all about, right?

In perfect synergy, Bucks arena to be named after another corporation that shook down Wisconsin for subsidies

The new Milwaukee Bucks arena got a naming-rights sponsor last week, which, yawn, if I reported on every deal like this I’d never have time to talk about anything else, and a whole lot of corporations would just get some free publicity. But as it turns out, this corporation, the extremely uncreatively named financial services company Fiserv, is dropping money on naming rights to a publicly subsidized arena right after getting $12.5 million in public subsidies of its own as part of the infamous Foxconn deal:

“It makes the Legislature look foolish,” said Sen. Jon Erpenbach (D-Middleton), who voted against the deal. “It makes the governor look foolish.”

People don’t understand why a company would need taxpayer subsidies for its headquarters when it has funds available to buy naming rights, Erpenbach said.

“Maybe the state can sell naming rights on that new (Fiserv) headquarters and get some of the money back,” Erpenbach said.

As with Citicorp getting naming rights to the New York Mets‘ stadium right after getting bailed out by the federal government, there’s no direct relationship here between the naming rights deal and the venue subsidies — it’s just a terrible look for a company to demand $12.5 million in state funds and then turn around and use it to buy ad signage on a building that’s already getting $450 million in public money, especially when the Bucks owners get all the proceeds from the naming-rights sale on the publicly owned building. It’s an even worse look that Fiserv got its subsidy after turning a $1.2 billion profit last year — but then, nobody’s claiming that companies are getting these deals because they need the cash; it’s just extortion exacted by threatening to leave the state. Damn you, Leonard Yaseen.

Friday roundup: Bucks say arena can fight racism, Rays in line for federal tax breaks, Falcons to get glowing bridge

Slow news week thanks to the holiday, but there were still a few items of note:

  • Milwaukee Bucks president Peter Feigin thinks his new publicly funded arena will help fight segregation because it’ll have a public plaza. The Chicago Tribune notes that the Bucks owners once released a strongly worded statement of support for one of their players after he was tased by Milwaukee police, so … nope, I don’t get the connection either, unless this reporter was assigned to cover Feigin and couldn’t find much else to say about his bizarro statement, so just googled “Milwaukee and race and basketball” and dumped the results into a Word file.
  • The Sacramento Kings owners are going to use computers at their arena to mine cryptocurrency for charity, which mostly serves as an excuse for the team to issue a press release mentioning themselves in the same sentence as blockchain, because we know that’s a thing. Too bad the earth is going to burn as a result, but everything’s a tradeoff, right?
  • Ybor City, where the Tampa Bay Rays want to build their new stadium (price and funding still TBD), has been tabbed as a federal “economic opportunity zone,” meaning developers can use it as a short-term tax shelter for profits that are reinvested into the area. The program is way too complicated for me to calculate at the moment just how much U.S. taxpayers would end up paying toward a Rays stadium, but suffice to say it’s one more piece of the funding puzzle that team owner Stuart Sternberg doesn’t have to worry about himself.
  • Speaking of the Rays, they’ve announced they’ll release new renderings of their stadium plans next Tuesday, which I guess makes this announcement itself vaporvaportecture?
  • The Atlanta Falcons pedestrian bridge that will now cost Atlanta residents $23 million is going to glow! And who can put a price on that, really?
  • Since it was a slow stadium news week, here’s a bonus article on how Nevada giving $1.4 billion to Tesla to open a battery factory there is looking to be a disaster, with the state ending up losing its entire budget surplus while new workers attracted to the area have driven up rents and increased local government’s police, fire, and schools costs, leaving residents with a higher cost of living and fewer services. One unemployed local who was forced to move into a motel room listed for the Guardian things she now considered unaffordable luxuries: “Ice cream. Bacon. A movie ticket.” It’s a fun weekend beach read!

Friday roundup: Kraft tries to use World Cup to get new stadium, Roger Noll says Austin MLS subsidies are indeed subsidies, NC mulls new tax breaks for Panthers

Posting this while watching the first World Cup match at the crazy stadium with the seats outside the stadium. (I haven’t honestly even noticed who the teams are yet, I’m just watching the architecture.) Anyhoo:

Friday roundup: The news media are collectively losing their goddamn minds edition

It’s a full slate this week, so let’s do this!

Friday roundup: Senators owner stalling on arena commitment, Jaguars owner wants to buy Wembley, and gondolas, forever gondolas

As late as Wednesday, I thought this was turning out to be a slow news week. Then the news made up for it in a hurry:

  • The New York Islanders owners held a question-and-answer session for residents near their planned new arena on Tuesday, and when asked about how they plan to increase Long Island Railroad service to avoid tons of auto traffic, a state development official said, “We are in very active discussions with the LIRR — meeting with them once a week — and those talks are ramping up.” Hopefully they’re involving Dr. Strange in those discussions, because they badly need to find some new topological dimensions.
  • Ottawa Mayor Jim Watson says he plans to talk to Ottawa Senators owner Eugene Melnyk about whether he actually plans to pursue the LeBreton Flats arena development he won rights to last year, after Melnyk called it “a huge project with tremendous risk” and said, “If it doesn’t look good here, it could look very, very nice somewhere else, but I’m not suggesting that right now” and “Something’s got to break somewhere and I mean a positive break.” Melnyk has made threats like this before, but you’d think now that he has an agreed sale price for the land he’d be happy; it sure sounds like he’s angling for some additional public subsidies now that he has his mitts on the land, which you can’t really blame him for, since Watson opened the door to that already. Come on, mayor, haven’t you learned yet not to get the can opener out when the cat is around?
  • Tampa Bay Rays 2020, the group started by the Rays to push for business support for a new stadium, is signing up plenty of members, but DRaysBay notes that “the real test of commitment will come when businesses are asked to make clearer financial commitments to a stadium plan.” Yeah, no duh. (The subhead here, “Business leaders line up behind stadium plan, but financing questions linger,” is also a masterpiece of understatement.)
  • MLB commissioner Rob Manfred says that the Toronto Blue Jays‘ Rogers Centre “needs an update to make it as economically viable as possible,” noting that other stadiums “have millennial areas, things like that that have been built and become popular more recently.” So, like, an Instagram parlor?
  • Here’s a story about how 25 years ago the NHL handed Norman Green the rights to move the Minnesota North Stars to any open market as consolation for putting an expansion team in Anaheim, where he’d wanted to move, and he ended up going to Dallas. Also it has Roger Staubach in the headline for some reason.
  • And here’s a story about how 50 years ago NHL expansion inadvertently kicked off the rise of arena rock, which is probably overstated but it has links to vintage Cream videos in it, if you like that sort of thing.
  • Jacksonville Jaguars owner Shahid Khan is in talks with the Football Association to buy London’s Wembley Stadium for £600 million, which is certain to raise eyebrows about the possibility of the Jags moving to London, but is probably for right now more about Fulham F.C., which Khan also owns, being about to get promoted to the Premier League and wanting a bigger place to play. Khan also said, “I think it needs investment and updating. Compared to American stadiums the video boards are something that need to be looked at. The lounges are a little bit dated.” The current Wembley Stadium was built in 2007.
  • The son of former disgraced Los Angeles Dodgers owner Frank McCourt wants to build a gondola to take fans from Union Station to Dodger Stadium to avoid traffic. “It’s not actually crazy,” Los Angeles Mayor Eric Garcetti insisted on Thursday, which, given that this is a city considering allowing Elon Musk to build a network of tunnels to whisk residents about via some unknown technology, maybe we should take that with a grain of salt.
  • San Diego State says its stadium plans could eventually be expanded to fit an NFL team, for a mere additional $750-$850 million. Most San Diegans responding to an internet poll (which means some San Diegans, some non-San Diegans, and some dogs) don’t think they’re getting an NFL team anytime soon, anyway.
  • The Port of Oakland has approved giving the Oakland A’s owners exclusive negotiating rights to develop Howard Terminal, which now gives the A’s exclusive rights to two possible stadium sites. As DRaysBay would say, financing questions linger.
  • NBA commissioner Adam Silver has toured the new Milwaukee Bucks arena and says it has “unique sight lines.” Hopefully he means that in a good way, though I’m still wondering about that “sky mezzanine level.”