Did Sue Black Pay Nothing to “Buy” Wave Team?

The announcement that Sue Black had bought the Milwaukee Wave soccer team was a head scratcher. How could Black afford to do this? She’s not the sort of wealthy individual who typically buys a sports team, but someone who earned about $118,000 annually for most of her time as head of Milwaukee County Parks Department, and who owns a modest Cape Cod home worth $227,000.

The man who sold her the team, Jim Lindenberg, is more your standard deep-pockets owner. Lindenberg sold his company, World Class Wire & Cable Inc., in 2008, for $62 million and bought one of most expensive homes in metro area, a home on Pine Lake he paid $5.8 million for in July, 2009.  That same year he also bought the Milwaukee Wave from Charlie Krause.

Krause had shut the team down for a month and was looking for anyone to bail him out. Insiders told Milwaukee Magazine that he sold the team for little or nothing to Lindenberg, perhaps with a clause that would kick back money to Krause if the team began to make a profit.

But that didn’t happen. Lindenberg said the team lost $1.4 million in his first year as owner. By May 2012, less than three years after he bought the team, he announced he was looking for more corporate sponsors and investors in the team.

“I would not stop…anyone with the adequate resources to purchase the team,” he said. But apparently nobody stepped forward.

Lindenberg did have some success over the years bringing in more revenue. He says the team increased its support each year in all five categories of revenue: season tickets, single tickets, attendance by schools, corporate sponsorships, and merchandise sales. Average attendance for games was 4,500 when he took over, and it now tops 5,000.

Since 2009, he tells me, “we made yearly progress to the point that next year there’s a balanced budget that’s proposed.”

But a budget on paper is just that, which underlines the challenge Black faces. Given that the team still lost money under Lindenberg, it’s not likely Black paid much, if anything for the team.  But what happens if the team loses money, where does that leave Black, is there a contractual provision to cover this? Lindenberg won’t say, noting that the contract swears them both to secrecy, and Black echoed that, saying she “can’t discuss terms.”

“I thought it was time to get a new leader in place,” Lindenberg says. “I think everyone knows Sue’s strength is networking. She knows a lot of powerful people with money.”

And she will need all the corporate sponsors she can get.  Just how big a challenge she faces was all but shouted out by the Milwaukee Wave website, where Black was listed as a staff member in every category of the front office: Executive Staff, Sales, Marketing and Communications, Soccer Operations and the team’s non-profit arm, the Wave of Hope. I mentioned this to Lindenberg in our interview and by the end of the day, Black’s name had been removed from every category but Executive Staff and Wave of Hope. Lindenberg says he will be providing free consulting behind the scenes to Black. Perhaps that was one example.

The franchise Black inherits does have its strengths: it’s the longest-running soccer franchise in North America, and has been led for 21 year by internationally known soccer coach Keith Tozer, who has won six championships and nine Coach of the Year Honors. “I think Keith and the players are great!” Black says.

But the Major Indoor Soccer League the team belongs to includes just six other teams: the Chicago Soul, Baltimore Blast, Rochester Lancers, Syracuse Silver Knights, Wichita Wings and the Missouri Comets (based in the lesser metropolis of Independence, Missouri). The Norfolk, VA team went out of business after just one season, merely the latest of cities that could not support a soccer team.

A rivalry with the Chicago team could help Milwaukee, but that team isn’t doing very well: it draws 1,902 people per game, compared to 5,068 in Milwaukee and 5,975 for league leader Rochester.

Spirit of Milwaukee in Decline?

The news that Delta Air Lines won’t renew its agreement paying $500,000 annually for naming rights to the downtown convention center is bad news not just for the Wisconsin Center District (which runs the convention center) but for a number of other organizations. Among other things, it raises questions as to whether there is much reason for Spirt of Milwaukee to continue operating.

Spirit of Milwaukee began in the 1980s with a goal of “promoting to local residents and informing citizens across the world the many tremendous attributes and assets of working, living, playing and learning in the city of Milwaukee and the surrounding seven counties,” according to its mission statement. It has provided “seed capital for nifty ideas,” says Spirit’s board chair Gary Grunau.

But its key role was as a pass-through organization: Each year it would get the naming rights money from Midwest Express (the original airline that bought the naming rights) and successor airlines and divvy the money out.  Thus, in 2010, Spirit paid out $166,667 to the Wisconsin Center District and $175,000 to Visit Milwaukee, the city’s tourism bureau, all money that came from the naming rights. Spirit also funneled $40,000 to the Cultural Alliance of Milwaukee in one year, and kept some money to run its own organization.

But in 2010, Spirit of Wisconsin executive director began Dean Amhaus began spending most of his time working to create the Milwaukee Water Council. In essence, he was on loan to the Water Council, which paid 88 percent of his salary. Amhaus eventually became executive director of the Water Council.

Spirit of Wisconsin has yet to replace Amhaus as director. It’s budget has been declining for years. When I asked Grunau about the future of Spirit of Wisconsin last fall, he told me, “a lot depends upon subsequent funding,” namely the naming rights money. At that point Gruanu was still hopeful the agreement would get renewed.

Now, without that money and without an executive director, you have to wonder if Spirit will continue operating.

Short Takes

-Wisconsin Supreme Court Chief Justice Shirley Abrahamson wrote an interesting op ed recently on the role of drug courts, which noted that there are now some 2,700 drug courts in the nation. “Two decades ago, Wisconsin had no drug courts,” she wrote. “Today, there are 57 problem-solving court programs in 38 counties,” which includes Milwaukee.

The move to create drug courts was intended to treat addiction as more of a medical problem than a crime and also recognized the disproportionate impact the incarceration of drug users had on black males. That impact has been particularly horrendous in Milwaukee, as I wrote in a recent column. Since the creation of Milwaukee’s drug court in 2009, the number of African American men getting incarcerated has declined significantly.

-Speaking of the courts, a study by the The Minnesota Law Review, ranked the 36 justices who served on the U.S. Supreme Court in the last 65 years by the proportion of their pro-business votes and found that no court has been more pro-business than the current one. All five of the current court’s more conservative members were in the top 10 of pro-business judges. “But the study’s most striking finding was that the two justices most likely to vote in favor of business interests since 1946 are the most recent conservative additions to the court, Chief Justice John Roberts and Justice Samuel A. Alito Jr., both appointed by President George W. Bush,” a story in the New York Times reported.