Bucks arena

[ChicosBailBonds]

Old news for many of you, but for those of us outside the greater Milwaukee area


Wisconsin Gov. Scott Walker said that the "only way he and state legislators would consider a tax" for a new Bucks arena would be if Milwaukee residents "first were given a chance to vote on the matter," according to Rich Kirchen of the MILWAUKEE BUSINESS JOURNAL. Walker said local residents would voice their opinions through a referendum or a "vote of some sort." But he acknowledged that "any discussion of a new tax is premature." Kirchen notes while no one has "proposed a tax or even a new arena," a sales tax has "been mentioned by some supporters of a new arena if the Milwaukee-area community decides to move forward with a project." Questions remain on which counties "would be included in a new tax proposal." Walker said that he "is not taking a position on an arena and possible public funding," and added that the concept "faces daunting challenges in winning voter support." He said that the first challenge is the BMO Harris Bradley Center is "very well maintained and has added new features in recent years to keep its amenities current." Walker added that the arena's condition is in "stark contrast to the situation when the Legislature considered approving a sales tax to support what is now Miller Park to replace outdated Milwaukee County Stadium." He said that the second challenge is the Bucks "have a smaller fan base" than the Brewers and "therefore less public support." Walker: "I don't say that as a way of saying we shouldn't do something because I think it's important to have a team and make sure we don't lose a team, but there are going to be some serious obstacles out there"

[GGGG]

Can we have a naming contest for the new Milwaukee NDBL franchise?

[BrewCity83]

For those of you not living in the area:  the local and state polititians here have no taste for supporting any type of tax for a new Bucks arena.  The epic battle to get Miller Park built was fought over 15 years ago but nobody has forgotten what a bitter battle it was, and how George Petak lost his career after saving the deal.

The general public has even less interest in funding a project, on the heels of Walker's recall election victory and his whole mission to get the public unions under control as a way to balance the state budget.  The only way a new arena is going to get built here is if Herb Kohl or the private sector figures out a way to get it done without using government money.

[Canned Goods n Ammo]

To me, the NBA business model is broken (for the majority of markets).

The only way for these franchises to stay in business is for the government to give them a building and additional revenue streams.

Teams like Chicago, NY, LA etc. can make money paying players huge amounts of money and charging a premium for tickets.

Cities like Milwaukee, Sacramento, Min. struggle... and in cities like OKC or Portland, it's probably just a matter of time before they struggle as well.

I realize that professional sports have a positive impact on the city, but the NBA is probably the last sport I'd shell out public dollars for. It's not a good business model, and giving them a new building is really a 10 year band-aid.

[mu03eng]

To me, the NBA business model is broken (for the majority of markets).

The only way for these franchises to stay in business is for the government to give them a building and additional revenue streams.

Teams like Chicago, NY, LA etc. can make money paying players huge amounts of money and charging a premium for tickets.

Cities like Milwaukee, Sacramento, Min. struggle... and in cities like OKC or Portland, it's probably just a matter of time before they struggle as well.

I realize that professional sports have a positive impact on the city, but the NBA is probably the last sport I'd shell out public dollars for. It's not a good business model, and giving them a new building is really a 10 year band-aid.

I agree with what you are saying but disagree with your assertion.  The model isn't broken, in fact, it's never been better if you are an owner.  Look what the Kings are going to sell for, look at what the Pelicans?? sold for.  NBA franchise values are escalating.  The Bucks suck but I guarantee you Kohl could sell for $300+ mil.  The issue is the NBA continues to demand public support for stadiums and they will continue to get it.  Every city that refuses loses a team to one that will try and win the team.  The NBA has all the leverage, there is no reason for them to find a new model.  The cities themselves need to determine if the model works for them, if it doesn't don't do it.

[MU82]

It's a broken model only for the billionaire owners who are tightwads.

Guys like Mark Cuban, who get pleasure out of owning a franchise and want to make it the best, look at it as a loss-leader. If they make money, great. If not, well, they can't take it with them, anyway.

I used to laugh my arse off every time I read that the Twins "couldn't afford" to pay such-and-such player or "couldn't afford" to compete with the best teams. Carl Pohlad was one of the 50 richest men in the world. He could have "afforded" to do anything he wanted to do -- including put a retractable dome on the new Minny ballpark. He chose to be a tightwad right till the end.

People wonder why athletes will hold out for a $109 million contract when they would have been perfectly set for life making "only" $80 million. Well, if they don't get it, the owners just keep it locked in their safes. It's not like bad teams lower ticket prices!

[ChicosBailBonds]

For those of you not living in the area:  the local and state polititians here have no taste for supporting any type of tax for a new Bucks arena.  The epic battle to get Miller Park built was fought over 15 years ago but nobody has forgotten what a bitter battle it was, and how George Petak lost his career after saving the deal.

The general public has even less interest in funding a project, on the heels of Walker's recall election victory and his whole mission to get the public unions under control as a way to balance the state budget.  The only way a new arena is going to get built here is if Herb Kohl or the private sector figures out a way to get it done without using government money.

A number of owners have been able to do just that.  Let's see Herbie pull it off.

[BrewCity83]

A number of owners have been able to do just that.  Let's see Herbie pull it off.

There's enough money and enough brainpower to make it happen.  I'm hoping it gets done.  I think the government is making it clear now to Kohl and the local businessmen that it's gonna be up to them to figure it out.  I'm also hoping the government just gets out of the way so that when they do come up with a good plan, they can execute it.

[Canned Goods n Ammo]

I agree with what you are saying but disagree with your assertion.  The model isn't broken, in fact, it's never been better if you are an owner.  Look what the Kings are going to sell for, look at what the Pelicans?? sold for.  NBA franchise values are escalating.  The Bucks suck but I guarantee you Kohl could sell for $300+ mil.  The issue is the NBA continues to demand public support for stadiums and they will continue to get it.  Every city that refuses loses a team to one that will try and win the team.  The NBA has all the leverage, there is no reason for them to find a new model.  The cities themselves need to determine if the model works for them, if it doesn't don't do it.

Well, I say it's broken because the Bucks claim they can't compete in their current arena. Their current arena is fine. Remodel the locker rooms or something (make it nice for the players).

The problem is, in order for some teams to turn a profit, they have to have all sorts of revenue streams (local TV, courtside ads, luxury boxes, restaurants, merch, beer, parking, etc.)

The smaller market owners will cry poor because they have to have ALL of those revenue streams just to compete with NYC or LA.

In reality, you are correct, that it's billionaires getting richer... but at some point I think it's inevitably going to stop. Municipalities can't keep paying 500 million dollars for a new building every 15-20 years so an owner can make more money.

[Hards Alumni]

Oh this thread again.

The first way for the Bucks to be financially viable is to get a better TV contract.

The second way for the Bucks to be financially viable is to win more.

The third way for the Bucks to be financially viable is to get a new arena.

1 and 2 aren't working, so they are going for 3.

[Sunbelt15]

Where in the hell do places like Detroit, Milwaukee, California as a whole, etc. get the money to keep these professional teams functional when jobs are scarce, unemployment is high, and the cities are bankrupt?

[Hards Alumni]

Where in the hell do places like Detroit, Milwaukee, California as a whole, etc. get the money to keep these professional teams functional when jobs are scarce, unemployment is high, and the cities are bankrupt?

What?

[Dish]

Owning an NBA team right now is a great market to be in. The new CBA made owning a team a lucrative investment. Look at the Kings as prime example.

Revenues are about to increase greatly with the new tv deal coming.

The problem with the NBA is free agent distribution . What mega star in 2014 is going to go to Milwaukee, Toronto, Sacramento, Salt Lake City, etc? If you don't hit the lottery, and if you do, it better be in a year with a LeBron/Wiggins, or you're f'd.

[ChicosBailBonds]

Where in the hell do places like Detroit, Milwaukee, California as a whole, etc. get the money to keep these professional teams functional when jobs are scarce, unemployment is high, and the cities are bankrupt?

Staples Center in Los Angeles was built with private funds.  The proposed LA football stadium, will be built with private funds.  When you are as bankrupt as we are it is a pretty tough sell to use public funds and actually has been for many years, even when times were "good" (snicker...snicker...or so the public thought).

It has paid off for Los Angeles in many ways.  Privately funded arena in a crap hole part of town has led to more private investment by real estate firms, restaurants, etc.  Now people actually go to downtown L.A. whereas a decade ago you wouldn't be caught dead there.  I view it is a shining example where private funding can work very well to drive growth and gov't benefits as well.  When you put your own cash into the kitty and have to make the numbers work, you tend to work really hard to get it done right.  When you put the citizens money into a project and it isn't yours, you don't always get that same result.

[GGGG]

Staples Center in Los Angeles was built with private funds.  The proposed LA football stadium, will be built with private funds.  When you are as bankrupt as we are it is a pretty tough sell to use public funds and actually has been for many years, even when times were "good" (snicker...snicker...or so the public thought).

It has paid off for Los Angeles in many ways.  Privately funded arena in a crap hole part of town has led to more private investment by real estate firms, restaurants, etc.  Now people actually go to downtown L.A. whereas a decade ago you wouldn't be caught dead there.  I view it is a shining example where private funding can work very well to drive growth and gov't benefits as well.  When you put your own cash into the kitty and have to make the numbers work, you tend to work really hard to get it done right.  When you put the citizens money into a project and it isn't yours, you don't always get that same result

I'm not saying that this isn't a bad thing, but arenas, whether publically or privately financed, don't create new entertainment dollars.  The Staples Center draws people to downtown, but they aren't spending money in the places they used to spend it. 

[GGGG]

Where in the hell do places like Detroit, Milwaukee, California as a whole, etc. get the money to keep these professional teams functional when jobs are scarce, unemployment is high, and the cities are bankrupt?

Do you have any clue how stadiums are funded?  Miller Park for instance?

[Canned Goods n Ammo]

I'm not saying that this isn't a bad thing, but arenas, whether publically or privately financed, don't create new entertainment dollars.  The Staples Center draws people to downtown, but they aren't spending money in the places they used to spend it. 

Yes and no.

It's impossible to know the percentages, but a NBA franchise might get a person to "go out" more often, and spend more than they would if there wasn't an NBA franchise.

I understand why cities "like" professional sports... but I don't think public financing makes much logical sense. You have to appeal to people's emotional want/need. The problem is, the Bucks don't have the general population emotionally invested (like Packers, Brewers, Badgers, etc.).

I don't really care about the Bucks... but if it made financial sense, I'd support a new stadium. Problem is, I haven't seen anything that indicates it makes financial sense.

[Abode4life]

Staples Center in Los Angeles was built with private funds.  The proposed LA football stadium, will be built with private funds.  When you are as bankrupt as we are it is a pretty tough sell to use public funds and actually has been for many years, even when times were "good" (snicker...snicker...or so the public thought).

It has paid off for Los Angeles in many ways.  Privately funded arena in a crap hole part of town has led to more private investment by real estate firms, restaurants, etc.  Now people actually go to downtown L.A. whereas a decade ago you wouldn't be caught dead there.  I view it is a shining example where private funding can work very well to drive growth and gov't benefits as well.  When you put your own cash into the kitty and have to make the numbers work, you tend to work really hard to get it done right.  When you put the citizens money into a project and it isn't yours, you don't always get that same result.

LA also probably doesn't have the greatness of the City of Milwaukee Historical Preservation council (or whatever their name is) as well as the Milwaukee County board.  Those two groups almost single handedly make any major development in the Milwaukee area very difficult because of all the hoops they make developers jump through.

[reinko]

I think publicly financed stadiums via sales tax, is probably the most transparent way of doing, no?  Asking voters, will be pay a penny or two for every $10 you spend within certain counties?  Simple, vote or no.  Nowadays, owners are going after tax exmpt bonds, infrastructure allowances, all kinds of hidden things.  Remember Steinbrenner "footing the bill" for Yankee system.  It was a giant shell game.

http://money.cnn.com/2007/08/10/news/newsmakers/yankees_stadium.fortune/

Same thing in Miami:  http://www.miamiherald.com/2013/01/24/3199018/how-a-91million-loan-on-the-marlins.html

[Spotcheck Billy]

IIRC the sales tax for Miller Park never came to a public vote ala referundum - it was just county board members voting for it in each county.

[ChicosBailBonds]

Do you have any clue how stadiums are funded?  Miller Park for instance?

Some public funds, sometimes private only, or a hybrid.  Usually it's a gov't held hostage and spending money on a big toy for owners of their team so they can reap the benefits financially while much more important things in the city, county are put aside. 

Anaheim going through this now with the Angels.....the fleecing continues.

[GGGG]

IIRC the sales tax for Miller Park never came to a public vote ala referundum - it was just county board members voting for it in each county.

It was actually approved by the State Legislature.

[GGGG]

Some public funds, sometimes private only, or a hybrid.  Usually it's a gov't held hostage and spending money on a big toy for owners of their team so they can reap the benefits financially while much more important things in the city, county are put aside. 

Well, in your opinion they are more important.  Apparently many disagree.

[ChicosBailBonds]

Well, in your opinion they are more important.  Apparently many disagree.

It's all a measurement of dick size for these guys.  Losing a team they feel lowers the prestige of their city.  The teams know it.  I don't blame them having been on that side of the table, it's just business.  I just question the priorities. 

[Hards Alumni]

Yes and no.

It's impossible to know the percentages, but a NBA franchise might get a person to "go out" more often, and spend more than they would if there wasn't an NBA franchise.

I understand why cities "like" professional sports... but I don't think public financing makes much logical sense. You have to appeal to people's emotional want/need. The problem is, the Bucks don't have the general population emotionally invested (like Packers, Brewers, Badgers, etc.).

I don't really care about the Bucks... but if it made financial sense, I'd support a new stadium. Problem is, I haven't seen anything that indicates it makes financial sense.

http://www.databasebasketball.com/teams/teamatt.htm?tm=mil&lg=n

You may not care about the Bucks because you are like most fans... Band-wagoners.  If you look at the last season the Bucks were successful (2000-2001), you can see that they drew on average 18,178 fans per game.  The maximum capacity at the BMO Harris Bradley center is listed at 18,717 fans.   This means that when the Bucks were successful, they filled their arena 97.1% full.  Not too bad.  Since that season, the Bucks haven't had better than 89.9% of capacity per game ('03-'04 season).  That is painful, but as a Bucks fan, the most difficult thing for me is watching the team have no clear goal other than being completely mediocre every year.  The management has been guiding a rudderless boat since 2002-2003 when they traded Ray Allen for a song.

As I have stated in previous posts, the main reason the Bucks can't make money is because they put an inferior product on the court for a small market.  Another reason is that even if they had success filling the BMO Harris Bradley Center, the negotiated television contract is, of course, not competitive with larger markets, nor will it ever be.  The real problem with the NBA is the lack of revenue sharing.  If they moved to the NFL model, I think that we wouldn't be talking about teams having to fold or move every couple of years... meaning stability.

One solution that the Bucks have to solving the cash flow issue is to build a new publicly funded arena... something the city doesn't seem to keen on doing.  While the BMO BC doesn't seem too old to many people (built in 1989), remember that it is 25 years old (older than the average college grad by 3 years!), and one of the oldest and smallest arenas in the NBA. 

As a professional basketball facility, its shortcomings are plentiful. It's not big enough. The lower bowl, which represents some of the best seats in the house and the most lucrative, is one of the smallest in the NBA.

There should be more clubs or lounges for season-ticket holders. There isn't enough parking, and there is no ancillary development in and around the arena.

http://www.jsonline.com/business/36087854.html

If something isn't done by the time the current contract runs out in 2017 the Bucks are likely gone.  I understand the knee jerk reaction of people not wanting to pay for another new arena while the current one seems to be in fine operation.  But economically speaking, the Bucks won't be in Milwaukee without a new arena.  In the last decade or so the model for teams is to maximize revenue streams.  The Bucks are already doing the best they can with the facility as it exists.  The real question is who should pay for this arena.  Personally, I have no problem continuing the Miller Park sales tax that is currently financing the new ball park in the valley.  If estimates are correct, Miller Park will be paid off somewhere between 2016-2020.  If the sales tax is simply carried over to finance part or all of a new arena I doubt most people will notice.  I know there will always be people who are staunchly against the public finance of a private business (like most sports teams), but a new arena could also be partially funded by private investors.  Why not allow private investors contribute money, and share in the profits (as a percent of their contribution) that the new arena will surely generate (As an example, the BMO BC is financially solvent).  Alternatively, the arena could be funded entirely by private funds as some suggest.