Brewers Floundering on Stadium Deal

American Family Field. Photo by Jeramey Jannene.

Last week Major League Baseball Commissioner Robert Manfred came to town to play the civic blackmail card, warning that the Milwaukee Brewers could move to another city if the taxpayers didn’t pony up and provide yet another massive subsidy for the team. This kind of threat has often been used by pro sports commissioners, but more strategically. Manfred’s visit was badly mistimed: It is unlikely to have much impact and now it will be hard for the Brewers to bring him back for an anticlimactic encore warning. It is part of a series of mistakes by the team that go all the way back to prior owner Bud Selig and will make this a very hard package for politicians to pass

Stadium and arena subsidies are a nightmare for elected officials. If you don’t provide a subsidy and the team moves you get blamed. If you vote for the subsidy, you can also be blamed. Republican state Sen. George Petak was, famously, recalled from office by Racine voters in 1996 for backing the five-county sales tax that paid for the Brewers stadium. So a sports team has to maneuver very adroitly.

And the Brewers are asking for a lot. The original stadium deal and 25 years of repairs and maintenance have cost taxpayers $1.56 billion to date, as Urban Milwaukee has reported, and now the owners want another $290 million subsidy to be put aside (or $378 million with interest it is expected to earn), simply to guarantee they stay in Milwaukee for another 13 years. That would be the highest per-year subsidy in major league history as sports funding analyst Neil deMause has written.

Back in 1996, when the first Brewers deal was passed, it was clear what it would pay for: a new, state-of-the-art stadium. When the subsidy for the Milwaukee Bucks was passed in 2015 it was equally clear, for a state-of-the-art arena. But what are we taxpayers getting this time?

The Southeast Wisconsin Professional Baseball Park District that oversees Brewers’ stadium already commissioned a 2018 study by the Mortenson company of all the likely maintenance and repair costs for the stadium through 2040 and put aside $71.8 million in sales tax revenue to pay for a long list of stadium features. Those included “a full replacement of all 35,244 seats,” replacing two 800-ton chillers and air-handling equipment, the flat roof portion of the ballpark, the LED ribbon board and LED out-of-town scoreboards, and doing “one more replacement of these boards” 10-15 years later, along with new LED lights and theatrical controls, a “drastically improved” sound system, maintenance and upgrades of 9 elevators and 10 escalators and parking lot and roadway improvements.

The Brewers have insisted the study was incomplete and have come up with their own study showing the true cost was $448 million, but the team has never clarified or costed out which features were missing from the Mortenson study and what taxpayers will actually be paying for.

Worse, they have done a poor job of lobbying the state Legislature. The team spent $435,000 on lobbyists in the 2021-2022 session and surely are aware that Republican legislative leaders are typically at odds with Democratic Gov. Tony Evers. Yet the team crafted a subsidy package with the governor and left out legislators in this discussion, as Assembly Speaker Robin Vos complained. And so the proposal was among hundreds that legislators removed from the budget.

At this point it’s far from clear what a revised subsidy proposal might look like. Vos has suggested Milwaukee taxpayers must pay for some of it, but that can’t happen until legislators figure out what the increased shared revenue and sales tax hike for the city and county of Milwaukee will look like. And even then will likely be no local money available.

The one pot of money that might have been used, an increase in the hotel and car rental tax which helps support the Wisconsin Center District, was already grabbed by the Milwaukee Bucks for Fiserv Forum. And the Bucks also got lucky in having Chris Abele as Milwaukee County Executive at the time. Abele, a Bucks fan, was a key factor in providing county support and helping craft the deal.

But the Bucks leaders were also far more adroit in how they handled state, county and city politicians. Bucks President Peter Feigin was more positive and engaging than Brewers President Rick Schlesinger. And once the arena was built the Bucks owners began building the Deer District around it, with restaurants, bars, a hotel, the Five Fifty Ultra Lofts apartment complex and (partnering with the Medical College of Wisconsin) a sports science center. The Brewers, by contrast, have never built much around the stadium on the 265 acres for parking that the team controls — even though any development it did would be tax exempt.  (The fact that the proposal by Evers included such a tax exemption was seen by some as a clue that the team planned to do such development. In fact, it simply included the provision as written in the prior legislation for the stadium.)

Meanwhile as the Brewers did nothing to make its stadium more of an attraction, baseball has seen a huge decline in its fan base: attendance for MLB games has steadily declined since the 2011-2012 season, with an overall 14% decline, while TV viewership for games has plummeted, from 22 million in 1992 down to 7.5 million in 2022  The average age of pro baseball fans is 57 vs 42 for the NBA. In short, there are fewer voters today who will care if Wisconsin “loses” the Brewers.

And probably fewer baseball fans in the state Legislature today than a generation ago, when it passed the last Brewers bailout. And the increase in partisanship along with the drastic gerrymandering of legislative seats since then has all but eliminated moderate Republicans or Democrats — politicians like George Petak — who might be able to find common ground on the tough issue of a sports subsidy.

Back in 1996, one issue that nearly derailed the stadium deal was a belated push to build the stadium in Downtown, which Selig adamantly opposed. Had he relented, there would be bars and restaurants in the area that got business from the games and the team would now be talking about preserving a chunk of downtown development as well as a major league venue. By contrast, an empty baseball stadium in the Menomonee Valley, while not ideal, would have nowhere near the economic and psychological impact of a white elephant in Downtown.

One thing the Brewers have been strategic about is realizing that the huge, $6.9 billion state budget surplus offers a now-or-never opportunity to gain another subsidy. But until it’s clear what taxpayers would be paying for, until the city’s and county’s financial issues are solved, until there’s an actual legislative bill crafted, a grim reaper warning by the commissioner is unlikely to have much impact. Instead, it suggested the Brewers have lost their way and are feeling very desperate.