Governor Walker to Unveil Arena Plan Tomorrow

[martyconlonontherun]

Only problem I have with this plan is that it relies on heavy growth and doesn't pay enough in the early years to cover the interest. If TV contracts suddenly bust the State would be on the hook. That said, it is still a hell of a deal for the city and state. $250 of private investment in a "public" arena is an excellent boost for the city.

[Chicago_inferiority_complexes]

It's pretty obvious no one would be happy /downgrading/ our arena like you suggest.   

Bottom line, this is a net negative for MU season ticket holders and folks who attend games.  We already have a stadium that not only meets, but arguably exceeds our needs.  While having an NBA team and stadium is beneficial for recruiting, MU was already kneecapped by the BE implosion and being demoted to an Ocho-esq television network.  Losing proximity to the NBA would be fractional in comparison.  Not good, but we're already in a position we need to overcome far bigger issues.

There is exactly one reason, and one reason alone a new stadium "needs to be" built: to separate more money from consumers. 

Sure, we'll enjoy being entertained by our Warriors playing ball in a new arena, we'll just need to open our own pocket books more for tickets, parking, food, beverages.   

Yipee.

Can they actually go up? How much more can you possibly charge for a beer? MU alums must have much more disposable income than I realize.

[mu-rara]

Can they actually go up? How much more can you possibly charge for a beer? MU alums must have much more disposable income than I realize.

Drink before and after.  Skip the arena pricing.

[jficke13]

Only problem I have with this plan is that it relies on heavy growth and doesn't pay enough in the early years to cover the interest. If TV contracts suddenly bust the State would be on the hook. That said, it is still a hell of a deal for the city and state. $250 of private investment in a "public" arena is an excellent boost for the city.

Everyone seems to agree that the new t.v. deal will be more valuable than the last one and that increase will be reflected in higher player salaries. I guess anything is possible, but I haven't heard anybody think it won't go that way.

Case in point, apparently Lebron's new deal was designed in part to give him an out during the free agency period that his people expected the salary caps to increase due to more t.v. $.

[GGGG]

Everyone seems to agree that the new t.v. deal will be more valuable than the last one and that increase will be reflected in higher player salaries. I guess anything is possible, but I haven't heard anybody think it won't go that way.

The new television deal has already been signed, and is nearly triple the value.

"Under the current collective bargaining agreement, just about half of all of the NBA's basketball-related income is earmarked for player salary. The league's annual TV revenue is going from $930 million to $2.67 billion, an increase of $1.74 billion per season. (This assumes a flat contract, which may not be the case, but work with me here.) Half of that is $870 million. That's what players stand to gain per year from the TV contract bump.

Players are forecast to receive a combined $2.33 billion in salary this season. Now add an additional $870 million to that. That's an incredible increase ... without any increase in the pool of players receiving salary. (Even if there is two-team expansion in the near-future, you're only adding 30 players to the 450 current roster spots.) Total player salary will increase by 167 percent just because of the TV deal, excluding any other growth."


The only problem is that the NBA (or the players) can back out of the current deal in 2017.  With these numbers, the players aren't going to opt out.  However the owners very well could and try to force a deal to limit the growth of the salary cap by taking a greater share of basketball related income.

[🏀]

The new television deal has already been signed, and is nearly triple the value.

"Under the current collective bargaining agreement, just about half of all of the NBA's basketball-related income is earmarked for player salary. The league's annual TV revenue is going from $930 million to $2.67 billion, an increase of $1.74 billion per season. (This assumes a flat contract, which may not be the case, but work with me here.) Half of that is $870 million. That's what players stand to gain per year from the TV contract bump.

Players are forecast to receive a combined $2.33 billion in salary this season. Now add an additional $870 million to that. That's an incredible increase ... without any increase in the pool of players receiving salary. (Even if there is two-team expansion in the near-future, you're only adding 30 players to the 450 current roster spots.) Total player salary will increase by 167 percent just because of the TV deal, excluding any other growth."


The only problem is that the NBA (or the players) can back out of the current deal in 2017.  With these numbers, the players aren't going to opt out.  However the owners very well could and try to force a deal to limit the growth of the salary cap by taking a greater share of basketball related income.

+1.

However, whenever the owners try to mess with the income sharing splits, we all start talking strike again.

[GGGG]

+1.

However, whenever the owners try to mess with the income sharing splits, we all start talking strike again.

It won't be a strike (player's action), it will be a lockout (owner's action).  The players could try to get a better deal, but they won't. 

[314warrior]

How much direct tax revenue do the Bucks bring into Wisconsin per year? (that isn't already directed elsewhere like debt service on the Bradley Center or something like that)

[swoopem]

Drink before and after.  Skip the arena pricing.

They're 24oz, one per half is my rule. For you math guys that's 4 beers in roughly 2 hours. I walk away happy.

[Spotcheck Billy]

How much direct tax revenue do the Bucks bring into Wisconsin per year? (that isn't already directed elsewhere like debt service on the Bradley Center or something like that)

Walker stated about $6.5 million earlier this week

[Litehouse]

How much direct tax revenue do the Bucks bring into Wisconsin per year? (that isn't already directed elsewhere like debt service on the Bradley Center or something like that)

The initial estimate from a previous study was $10.7M, but the Gov's new proposal uses $6.5M as the base amount.  Apparently they took out some other non-Bucks stuff from the $10.7M, and the $6.5M amount focuses just on NBA salaries.
http://www.bizjournals.com/milwaukee/blog/2015/01/how-gov-walkers-nba-jock-tax-base-fell-to-6-5m.html

That tax revenue is currently just going into the general fund.  It is not being directed anywhere in particular.

[jsglow]

It's pretty obvious no one would be happy /downgrading/ our arena like you suggest.   

Bottom line, this is a net negative for MU season ticket holders and folks who attend games.  We already have a stadium that not only meets, but arguably exceeds our needs.  While having an NBA team and stadium is beneficial for recruiting, MU was already kneecapped by the BE implosion and being demoted to an Ocho-esq television network.  Losing proximity to the NBA would be fractional in comparison.  Not good, but we're already in a position we need to overcome far bigger issues.

There is exactly one reason, and one reason alone a new stadium "needs to be" built: to separate more money from consumers. 

Sure, we'll enjoy being entertained by our Warriors playing ball in a new arena, we'll just need to open our own pocket books more for tickets, parking, food, beverages.   

Yipee.

The price of a ticket is based on supply and demand assuming the seller (Marquette) acts rational, nothing more, nothing less.  (I guess you haven't seen the discounts being offered every game this year?)  Now Marquette does occasionally make mistakes in this area.  I'll cite the Al game as an example.  But a new arena won't have too much to do with that calculus.  The reason we pay more now is because we're part of the BEast, not CUSA.

[jsglow]

It was ACCO in my day, FTR.  

My personal opinion is that the school should only invest in this arena if it makes sense for Marquette from a financial standpoint.  That means either A) putting in upfront money gives them free (or discounted) rent, and the NPV of that rent savings is more than the initial investment, or B) Marquette's upfront participation gives them an profit-sharing stake in the arena/entertainment complex, and only if there is a more than reasonable expectation that it will indeed be profitable.

If neither of those are true, Marquette should have no role other than as a tenant.

Agreed.  And if they do decide to invest they'll need to spell it out a helluva lot better than DePaul did.  Personally, I like MU as a tenant.  We're in the 'university' business, not the 'public sports venue' business.  For what it's worth, our rent is currently $27,000 per game through 2017.

I will say that Dr. Lovell has talked on several occasions about MU's role in the community.  Take the Avenues West restoration project, for example.  I think that's fine and I think he's got a good business head on his shoulders so I'm not overly concerned.

[GGGG]

Agreed.  And if they do decide to invest they'll need to spell it out a helluva lot better than DePaul did.  Personally, I like MU at a tenant.  We're in the 'university' business, not the 'public sports venue' business.

I will say that Dr. Lovell has talked on several occasions about MU's role in the community.  Take the Avenues West restoration project, for example.  I think that's fine and I think he's got a good business head on his shoulders so I'm not overly concerned.

Agreed.  The only way Marquette could come up with this much cash is through redirecting some of its endowment investments toward this project, but I don't think you get the "risk adjusted rate of return" necessary even if you include the cost savings of not having to pay rent. 

[jsglow]

Agreed.  The only way Marquette could come up with this much cash is through redirecting some of its endowment investments toward this project, but I don't think you get the "risk adjusted rate of return" necessary even if you include the cost savings of not having to pay rent. 

And as you know Sultan, redirecting endowment dollars is very difficult to do.  Individual endowment funds have a stated purpose clearly spelled out in the governing document executed by both the benefactor and the university.  Now in theory the could raise new dollars....

[warriorchick]

And as you know Sultan, redirecting endowment dollars is very difficult to do.  Individual endowment funds have a stated purpose clearly spelled out in the governing document executed by both the benefactor and the university.  Now in theory the could raise new dollars....

I would be completely against any fundraising whatsoever for this purpose.  Even if some well-heeled alum walked into The Office of the President  pulling a steamer trunk full of cash and said, "Here's a little sumpin'-sumpin' for the new arena", I would want Dr. Lovell to respond with, "You know, we're good there, but let me tell you about the new indoor practice facility we're trying to build..."

[GGGG]

And as you know Sultan, redirecting endowment dollars is very difficult to do.  Individual endowment funds have a stated purpose clearly spelled out in the governing document executed by both the benefactor and the university.  Now in theory the could raise new dollars....

The endowment is made up of hundreds of funds that are invested in total.  Real estate is likely part of that investment mix.  I was speaking about the University hypothetically using the new arena as an endowment investment vehicle.  You wouldn't need to change agreements to do that.  You just better hope it is a prudent investment versus a REIT or something that spreads around risk.

[jsglow]

The endowment is made up of hundreds of funds that are invested in total.  Real estate is likely part of that investment mix.  I was speaking about the University hypothetically using the new arena as an endowment investment vehicle.  You wouldn't need to change agreements to do that.

No doubt real estate development is part of many of the over 1000 MU endowments.  But let's use the example of an endowment created for the new DLC (I'll bet there are more than one).  That's not getting redirected without permission.  That's all I'm saying and I understand what you're saying.  I just want folks here understanding how the broadly described 'university endowment' works, that's all.  Have an awesome day. 

[brandx]

With his aspirations, Walker wouldn't take the chance of being repudiated by a Republican legislature. If he's announcing it, they're on board.

No. Republicans will not pass Walker's plan.

[Sir Lawrence]

Marquette won't be chipping in anything:

http://m.jsonline.com/news/milwaukee/marquette-will-not-contribute-funds-to-new-arena-b99457243z1-295365781.html

[Benny B]

Marquette won't be chipping in anything:

http://m.jsonline.com/news/milwaukee/marquette-will-not-contribute-funds-to-new-arena-b99457243z1-295365781.html

As well we shouldn't.  Pay rent, no risk.

[Daniel]

How the heck can they charge visiting nba players with income tax?  That just seems impossible...

[Groin_pull]

Marquette won't be chipping in anything:

http://m.jsonline.com/news/milwaukee/marquette-will-not-contribute-funds-to-new-arena-b99457243z1-295365781.html

Doubt that MU has a few spare millions sitting around.

[warriorchick]

Liking this Lovell guy more every day.

Great article.  I especially liked the part where they contrasted our decision with DePaul's idiotic deal with the City of Chicago'

[copious1218]

How the heck can they charge visiting nba players with income tax?  That just seems impossible...

NBA players (and all athletes) have to pay taxes in every state they play in.