The Failed Promise of Miller Park
It didn’t make Brewers more competitive, yet its price tag keeps rising.
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.
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.
Back when Selig was selling taxpayers on the idea of handing him a new stadium, we were repeatedly told a new venue would solve that dreaded small market franchise problem and allow him to spend enough on player payroll to field a competitive team.
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.
As to the cost for taxpayers, that has kept rising. Back in 1995, when the state legislature passed a law creating a new five-county sales tax to pay for Miller Park, the tax was expected to sunset in 14 years, in 2010. But the tax has operated as something of slush fund that can be grabbed to pay for everything from a new scoreboard installed in 2011 and costing $5.9 million to $1.6 million worth of PR spending by the Southeast Wisconsin Professional Baseball Park District.
Meanwhile, interest rates have dropped greatly since the stadium was built and really bottomed out since the Great Recession, meaning there was a great opportunity to refinance the stadium bonds and end the tax at a sooner date. The public stadium authority did refinance in 2005 and probably since then, yet it just keeps collecting our money.
In March the stadium district released a report which predicted the tax “could be retired sometime in either 2019 or 2020,” nearly a quarter century after the tax began in 1996, and the Business Journal duly reported the sunset for the tax “draws nearer.”
But in fact, as I reported last year, the stadium authority board has come up with a plan that assures taxpayers continue to support Miller Park until 2040. To that end, the board has been salting away enough money to pay for annual stadium operating costs and new projected capital costs and repairs through 2040. The total amount of that reserve fund was up to $52 million a year ago and has probably increased since then. (Stadium authority executive director Mike Duckett hasn’t responded to my requests for an update.)
In short, taxpayers will be supporting Miller Park, with money collected earlier for that purpose, until 2040. By then, if not sooner, we will be asked to build a new ballpark. Odds are Attanasio will have long since sold the team for a huge profit, none of which will be shared with his majority partners, the taxpayers.
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