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The Stadium Scam: Milwaukee Edition

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UNDATED:  Robin Yount of the Millwaukee Brewers poses during an MLB game.  Robin Yount played for the TEAM from 1974-1993.  (Photo by Rich Pilling/MLB Photos via Getty Images)
UNDATED: Robin Yount of the Millwaukee Brewers poses during an MLB game. Robin Yount played for the TEAM from 1974-1993. (Photo by Rich Pilling/MLB Photos via Getty Images)

Publicly funded sports stadiums, the grift that keeps on giving.

Oh, what a lovely investment the Milwaukee Brewers team is. Mark Attanasio paid $223 million for the Brewers in 2005 and the team is now worth $925 million, according to the latest analysis by Forbes magazine.

Pro sports owners almost never lose money. They may have a net loss in a given year or years, but that is far offset by the way sports franchise values rise. The resell value of the franchise is always rising and always guarantees a huge return.

One reason is that a team like the Brewers is basically a monopoly, the only such sports franchise in the metro area. But perhaps a bigger reason is that the company’s major cost of operation, the stadium in which the team plays, is largely paid for by taxpayers. The cost of Miller Park, which could ultimately run anywhere from $524 million to more than a billion in taxes, depending on what costs and subsidies you choose to include, is far more than Bud Selig and his partners invested in the team (including the original purchase price) during the years they owned the Brewers.

And the fact that the taxpayers continue to pay for the stadium, its maintenance and new additions, makes the Brewers a sweet deal for Attanasio. Moreover, he doesn’t just get to a heavily subsidized baseball stadium, but an ever-growing concert venue as well.

As Forbes notes, the Brewers “poor play dinged ballpark attendance 9% last season, but their concert business is picking up. Country superstar Kenny Chesney’s June 2016 concert at Miller Park ranked as the top-grossing concert in that period with gross sales of $4.8 million, according to figures reported in Venues Today. The Brewers signed a deal with Ballpark Music to stage concerts at Miller Park next season. The agreement provides a financial boost to the Brewers because any money earned at the non-baseball events goes directly to the team under the Brewers lease. The Brewers keep the revenue from parking, food and merchandise.”

Yep, yet another gift from the taxpayers of this five-county metro area (which includes Racine county, much to the continuing anger of its residents), who get no cut of the concert revenues in the stadium they built.

But hey, at least ownership is investing those profits in making the team competitive!

In 2000, the year before Miller Park opened, the team had the eighth-lowest payroll at $36.5 million, well below the median payroll of about $56 million and far below the top payroll of $92.5 million for the New York Yankees.

How has Miller Park changed this? Actually the disparity has gotten far worse. The current payroll of the team is $62 million, which is dead last in the league, far below the median payroll of $138.2 million and light years below the top payroll of $244.6 million for the Los Angeles Dodgers.

True, the Brewers have been in a rebuilding mode, but the team’s payroll rank since Miller Park opened has averaged between the 20th and 21st in the league — about the same rank it had in the years before the new stadium was built.

In short, while Miller Park assured Major League Baseball remained in Milwaukee, and has greatly increased the wealth of Selig and Attanasio, it didn’t exactly make the Brewers a powerhouse. The team’s last (and only) World Series appearance was back in 1982, and 16 years after Miller Park opened, it hasn’t gotten the team much closer to another pennant.

Why, it’s almost as if the rich lie to the public about their investment priorities!

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  • erick

    If I were a city or state government and a team wanted me to pay for an arena or stadium I’d say “ok, on one condition, whatever % of the stadium we pay for we get that % ownership of the team”

    • Hogan

      The NFL at least doesn’t allow that.

      • erick

        I know, mostly it is just a snarky way to tell them to pay for their own damn stadiums

  • FMguru

    Such a scam.

    I am pleased to see some pushback, though – here in California, both Oakland and San Diego told their football teams “best of luck in your future endeavors” when they demanded fancy new stadiums, and many of the new pro facilities in the state (the new Warriors arena, the upcoming Rams/Chargers playpen, even AT&T Park) were mostly or entirely paid for by the teams themselves.

    • Victor Matheson

      Santa Clara stadium for the 49ers is roughly 90% private as well.

      • efgoldman

        Santa Clara stadium for the 49ers is roughly 90% private as well.

        Hate on New England all you want, but all three of our major league sports facilities are privately owned/built/financed.

        • No Longer Middle Aged Man

          I love New England. It’s Boston teams and their fans that I can’t stand.

        • cpinva

          pretty much the same thing in DC. as far as I know, the football/baseball/basketball/hockey facilities are all privately built/financed. Jack Kent Cook was a prick, but he at least put his money where his mouth was.

          • Brien Jackson

            Baltimore’s stadiums aren’t privately built, but the city/state at least got a decent deal on operations of the football stadium and Oriole Park can be quasi-justified for the developmental impact on the Inner Harbor area.

            • Davis

              I’m guessing that Camden Yards comes closer than any other project in justifying it’s investment. It cost $225 million to build, and there is apparently more revenue sharing than Milwaukee, judging from that article. Thousands of fans come from New York and Boston. Bond interest is paid from scratch-off lottery tickets.

          • jmauro

            In DC, Nationals park was mainly built with city money and the city council gave D.C. United more and than MLS team ever to move out of city built RFK to basically allow the city to prepare the city to give the NFL team a bunch of money. And the new owners of the Verizon center have been asking around for city money as well.

            Also the NFL team got a bunch of renovation money for FedEx under a threat to move elsewhere.

  • Victor Matheson

    True story: 20 years ago Wendy Selig was invited to the college I was teaching at to give a public lecture. At the time she was President of the Brewers, the only woman in MLB holding such a position.

    During the Q&A, a student stated their ambition was to become President of a major league sports team and what advice could she give. She said that people should follow her path – strong liberal arts undergrad (she went to Tufts) combined with a graduate degree in a useful field (she had a law degree from Marquette). And then just work hard.

    As I was a lowly adjunct professor at the time, I did not ask the obvious follow-up question: “Does it help if your dad previously owned the MLB team you now run and is currently the Commissioner of Baseball?” I have always kind of regretted not asking that question…

    BTW, here is a place the Erik and I see completely eye to eye, and I have spent the last 20 years debunking these outrageous sports claims. It’s pretty much given me full-time research work the entire time.

  • Nobdy

    I’ve been listening to the audiobook of Evicted on my way to work, and that takes place in Milwaukee, so this is even more infuriating given the context of how poor renters are treated in the city. At the part where I left off last a poor woman was calling around to every social service agency she could think of to try and get a rent payment of less than $1,000 so she could stay in her home, but was told that there was no money for her.

    With a billion dollars literally every citizen in Milwaukee could be given $1,600, which for a lot of the poorer residents would be a massive amount of money. If you didn’t distribute the money to everyone but instead put it in a fund for the needy and gave grants to stave off evictions and help with utility bills you could probably prevent literally a million evictions with that money*, used judiciously, and avoid disrupting countless children’s (and adults’) lives.

    But, you know, baseball’s important too, as is feathering the beds of the city’s richest residents.

    Of course nobody would ever consider putting a billion dollars towards eviction prevention in a city like Milwaukee in this country. We’ll do it for baseball, but not to prevent kids from becoming homeless.

    *I realize there are problems with just pushing a billion dollars into a rental system, since landlords will try to capture the money through raised rents and other means, but there are ways to do it to minimize that, and even if the landlords do get the money at least you’ve done some good for poor tenants too, as opposed to just for wealthy baseball fans who can afford to go to games, and rich players and owners.

    • efgoldman

      I realize there are problems with just pushing a billion dollars into a rental system

      There really aren’t, since it’s as realistic as a unicorn crapping platinum in your back yard.

      • Denverite

        What kind of fertilizer works best with that?

        • efgoldman

          What kind of fertilizer works best with that?

          You have to feed them Purina Unicorn Chow™

          • los

            made only from pure care bears

  • Dennis Orphen

    When Ozzie Smith did a backflip taking the field in Game 7 of the ’82 World Series everyone knew we were toast. The following nine innings were just a formality.

  • Denverite

    Hey, I never knew that Larry Bird played for what I’m guessing is the short season A ball team in Kankakee.

  • ThresherK

    Study question: Did the Seligs do worse by the Brewers fans, Expos fans or Marlins fans?

    • Mark Centz

      Trick question. Pilots fans.

      • Dennis Orphen

        If anyone here hasn’t read Ball Four and it’s sequel I’m Glad You Didn’t Take It Personally, you might want to check them out.

        • cpinva

          I’ve read Ball Four, and it’s still hilarious after all these years. haven’t read the sequel though.

  • ASV

    As a fan and close observer of the Brewers, I can tell you that the payroll thing is a total misread. Not only is the team rebuilding, it is already much better than it was last year. And if anything, when their last big free agent signing, Matt Garza, comes off the DL, it’s likely to make them worse. Attanasio brought in a new GM about a year and a half ago who appears to have a great sense of talent fungibility and where big market teams can be fleeced. For further detail on this, look at the trade of Tyler Thornburg to Boston.

    • efgoldman

      For further detail on this, look at the trade of Tyler Thornburg to Boston.

      Apparently it’s really easy when you’re dealing with Dombrowski. He has a thing for sore-armed pitchers. Maybe he gets a kickback from the surgeons who do Tommy John.

    • Brien Jackson

      Yeah the obsession with payroll spending as a stand in for competitiveness is odd, and even moreso here. The Brewers spent enough to lock up Ryan Braun in the long term (and on the flip side were right not to have done so with Prince Fielder) and they’ve intermittently made trades for guys like Sabathia and Greinke to bolster their playoff odds (and you wonder now if they don’t wish they could take the Greinke trade back!)

  • Jackson87

    Well. I am sure that the voters in Milwaukee and Racine have punished the politicians who have gifted the Brewers so generously….

    • A state senator who promised to vote against the stadium funding, George Petak of Racine, ended up being the deciding vote for it.

      His constituents booted him in a recall election.

      • los

        George Petak recall, Wisconsin (1996)
        George Petak, a Republican member of the Wisconsin State Senate, was recalled from office in 1996.[1] He had served since January 1991.

        Petak’s recall resulted in the Wisconsin State Senate switching from a chamber with a majority of Republicans to a chamber with a majority of Democrats.[1]

        Those who sought Petak’s recall were angry because he switched his vote from “no” to “yes” on a tax plan to build a new stadium for the Milwaukee Brewers that levied a 1/10th of one cent sales tax.[1][2] In June 1996, nine months after the vote, he was recalled from office.

        Elizabeth Erven led the effort to collect the 11,577 signatures necessary to schedule the election. She stated, “He probably could have gone on to be a lieutenant governor, but the mistake was egregious. And you know, we may not be rich down here, we may not have a lot of great opportunities to excel at a lot of things, but the people who live here believe there are certain lines you just don’t cross. And that was one of them.”[3]

        Petak opened a consulting firm in the Madison, Wisconsin area in 2009.[4]

  • brendalu

    Sure, but there’s no way the $400 million in public money that’s just been committed for a new arena for the Milwaukee Bucks won’t pay off! (Did you know the Milwaukee Bucks are still a going concern? True story.)

    • Thlayli

      Did you know the Milwaukee Bucks are still a going concern? True story.

      They apparently have a good young team. They’re currently tied 2-2 with Toronto in their first-round playoff series.

  • randy khan

    They may have a net loss in a given year or years, but that is far offset by the way sports franchise values rise.

    Those net losses often – maybe nearly always – are illusions. Among other things, sports teams are allowed to both treat players’ salaries as expenses and depreciate the players as assets. And historically quite a few team owners also owned (or owned big pieces of) the regional sports networks, and undercharged for rights, shifting profits from the teams to the networks.

    • jmauro

      This. Teams lose a lot of money on paper via under or overpriced transfer pricing between the team, stadium, merchandising and media rights. I seriously doubt any one the major league teams lose anywhere close to the year over year losses they claim.

  • Hang on: who owns these stadiums? Is it really possible that a structure built with public funds, on (I assume) public land doesn’t belong to the city? And if that’s the case, why isn’t the city getting a cut of, at the very least, the concert fees?

    • Dilan Esper

      Because the politicians, for all sorts of reasons, give the owners whatever they want.

      • cpinva

        because they’re all fanboys. they’re the guys that never made the varsity, never lettered, and look up to pro athletes as some kind of mythical “heroes”. many of their constituents do as well, so it’s a two-fer: they get to meet the athletes, and they get votes for keeping the teams in their city.

        • Dilan Esper

          That’s part of it.

          Also:

          Politicians and their donors get to sit in the luxury boxes and get wined and dined.

          Politicians take credit for the stadium and get their name on a plaque.

          Some voters actually care a lot and will blame the politicians for losing the team.

          Teams come armed with often phony studies about the alleged economic impact of stadiums.

    • sigaba

      I was confused by this as well. Does the city government retain no equity stake whatsoever in the stadium? Did they just give the stadium to the team? Did the city just give the team a need to build a stadium? Or does the team have some sort of underpriced senior lease on the thing, and then all the concerts are subordinate to that?

    • NeonTrotsky

      Talk about a literal government handout

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