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A poor reflection of Selig's insistence that new stadiums are needed for higher revenues

OAFC BBS - All Topics: Archive: A poor reflection of Selig's insistence that new stadiums are needed for higher revenues
Top of pagePrevious messageNext messageBottom of pageLink to this message   By deajay on Tuesday, November 11, 2003 - 08:24 pm:

The Milwaukee Brewers have been instructed to cut payroll to $30mil this upcoming season.

The Brewers "pledged higher payrolls and more competitive teams when they sought legislation to finance much of the cost of Miller Park ..."

Their attendance dropped to $1.7mil this past season. Well, indeed, old Bud is still a car salesman at heart and the tax paying public in Wisconsin is paying for a Rolls Royce when they got a used first-year Hyundai.

"http://sports.espn.go.com/mlb/news/story?id=1659639"

Top of pagePrevious messageNext messageBottom of pageLink to this message   By ws9 on Wednesday, November 12, 2003 - 10:51 am:

My favorite line "but the payroll target number all depends on how we draw" Now thats a classic.

If only all of America could adopt MLB's philosophy.

All college students should stop studying until their prof. start giving them good grades.

All companies making crappy products, refuse to imporve them until people commit to buying lots more of them.

Vote Bud in 2004.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By rocket on Wednesday, November 12, 2003 - 01:08 pm:

The architect of revenue sharing, now lowers his
payroll to barely be above what he will
receive from the big spenders. How pathetic.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By deajay on Wednesday, November 12, 2003 - 03:05 pm:

Yeh, doesn't it kind of make one wonder what his team is doing with their revenues? I believe they received more than any other team. Did they really go back into the team? Anyway, I think it is a sad plight for the Wisconsin public, because it is apparent that this team has been woefully been mismanaged. In the meantime, it will be very interesting to see if Detroit improves at all. If they do, that makes Milwaukee's brass look even worse.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By rocket on Thursday, November 13, 2003 - 01:45 pm:

Now two state legislators are upset with the
Brewers, want to look at the books.

http://www.jsonline.com/sports/brew/nov03/184607.asp

The Brewers fans that are still left are pissed
and spouting off....

http://www.jsonline.com/sports/brew/nov03/184558.asp

Top of pagePrevious messageNext messageBottom of pageLink to this message   By deajay on Thursday, November 13, 2003 - 08:41 pm:

Thanks, Rocket. Well, one thing's for certain, both the legislators and the fans want the Seligs out. And, the legislators have every right to want to see the financial books. Course, they know their political future is on the line, as well.

And they need to draw 2mil attendance next year to break even? They'll be lucky to draw 1.5mil and that's BEFORE they dump Sexson and Jenkins. Also, interesting ... and true ... comments from the legislator side re needing wealthy owners to run successful franchises.

We don't even have a new stadium and the comments have to hit Oakland A's fans too. It is our good fortune that we had a good scouting system over the years and obviously, good coaching at the minor league level. Actually, guess that is Schott's good fortune, up till now, anyway. But sadly, the way Schott runs this club is not all that dissimilar to the way Seligs run theirs ... tight-fisted and refusing to keep any stars beyond FA.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By diamond_lil on Thursday, November 13, 2003 - 09:00 pm:

you don't even have to look at the boods, which they won't show anyway...here's what Forbes put out after Selig testified to Congress:

http://www.baseballprospectus.com/news/20020403pappas.shtml

Top of pagePrevious messageNext messageBottom of pageLink to this message   By eyleenn on Thursday, November 13, 2003 - 09:02 pm:

Since the state put up the money for Miller Park, they should by all means have the right to see the books.

How great would it be if it were proved that Selig's management really did scam the Wisconsin public?

Top of pagePrevious messageNext messageBottom of pageLink to this message   By diamond_lil on Thursday, November 13, 2003 - 09:03 pm:

and here's another great read:

http://www.wisinfo.com/dailytribune/wrdtsports/281669319600999.shtml

Top of pagePrevious messageNext messageBottom of pageLink to this message   By deajay on Thursday, November 13, 2003 - 09:52 pm:

Gee, I wonder if $1 (or $2)nites, four nites a week, will help? :)

Top of pagePrevious messageNext messageBottom of pageLink to this message   By sactodavey on Thursday, November 13, 2003 - 11:24 pm:

i got to see miller park last year, it is a nice place but they have a tgif's in the park open 7 days a week when i was there around 2p.m. in the afternnon the place was empty , to bad for them he he he it is like the sky dome i have been their too, it has a hard rock also but the fads of having resterauts in stadiums goes quick with and all the yuppie things and cost to much, the A's have it made paying really no rent.

In time the Giants will feel the same drain even thuogh san fran is a beautiful city and it is a nice venue the fans will get tired of going to the games the yuppies will find another place to be and quite going then the Giants will start losing money in droves.

I personally hope th A's do not get a stadium because in time it will come back to haunt them like it has all the other new stadium teams except baltimore.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By voxhoo on Thursday, November 13, 2003 - 11:47 pm:

The Brewers are paying $12 mil/year in rent/debt service plus the cost of maintenance on the new park. Their rent in the old park was under a mil/year.

It might have been publicly funded but, it doesn't mean the Brewers got off without financial obligations. In the last year of the old park, they drew 1.4 mil. You have to draw a lot of extra fans to cover $12 mil.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By sactodavey on Friday, November 14, 2003 - 12:20 am:

BINGO!!!! opening night pays A's rent all year hm..... like i said the A's will never see a new park thank god!!!

Top of pagePrevious messageNext messageBottom of pageLink to this message   By oaktownfan on Friday, November 14, 2003 - 12:43 am:

I don't see how a new park in Oakland could come back to haunt the A's.

If you have a good team early on when the park opens, you do well both on and off the field.

You point out Camden.
-But look at Jacobs when Cleveland was hot. They sold out for hundreds of games in a row.
-SBC with the Giants.
Safeco, with the Mariners.

If the A's owners had agreed and the city helped fund a new park a few years back. The new A's park would've opened 2 years from now. The same exact time when the Big 3 contracts would run out and maybe they would projected how much renues they would've had the first few seasons with sellouts, they would've signed Tejada this offseason and Chavy next offseason knowing the A's would be a good team for a good part of this decade.

I see no reason why a new park wouldn't help the A's out, LONG TERM.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By deajay on Friday, November 14, 2003 - 09:38 am:

Here's a resolution to the whole thing. It would be very simple if greed and arrogance didn't rule.

Contract the Brewers, move the Expos to Milwaukee and get them a new owner.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By sactodavey on Friday, November 14, 2003 - 10:01 am:

Yes new parks real nice but remember in cleveland they sold out only because the Indians after 40 yrs of losing finnally had a great team beggining its 7 yr run but even with the attendance they could not afford to keep the players and the team is on a low again, so where is the attendance now in Cleveland? low so does a new stadium mean bigger attedance every year? no for here in oakland we have proven a good team will attract we drew 2.2 million in a so called ugly park.

The point is safeco in seattle SBC in SF and the jake in clevland all had 1 thing in common when they are drawing well the teams are doing well in winning but eventually all these teams will be on the decline and even with the big attendance with all the ball park debt they still could not afford to keep their big stars except SF with bonds, i think in time the A's would not be able to afford to keep their players even with a new park like celveand wth rameriez seattle with A-rod etc.. and the A's will start to go on a typical down cyle not winning and you will se declined attendance and a huge stadium debt this is what has happened in detriot millwaukee now clveand, just stay at the net pay nothing for rent and put the $$$ back into the farm system.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By eyleenn on Friday, November 14, 2003 - 01:42 pm:

I think Cleveland is on the rise again, with all their good young players. All teams go through cycles. You have to hope and work for short down-cycles.

Milwaukee hasn't made the slightest attempt to field a competitive team and their fans know that.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By diamond_lil on Friday, November 14, 2003 - 01:55 pm:

sactodavey,

I'm sorry but the problem is not the new ballpark but the ownership and how they run their club.

The new ballpark with a good ownership would be the ideal, but I have to agree that if you put a new ballpark in Schott's hands it will be a total disaster as it was in Reisndorf's in Chicago and Selig's in Milwaukee as far as nurturing or keeping any kind of attendance, even with a winning team. Schott is not the type of owner any fan can support without resentment and disgust.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By oaktownfan on Friday, November 14, 2003 - 03:44 pm:

Well, with a new park, the A's might have not signed all of their free agents, but they sure would have had a lot more money gained in the new park that they would have signed at least 2 or 3 of their stars. With the net, they don't get as much money as they would get if they had a new park and they probably won't sign any of the Big 3 or Chavy.

The reason why teams like Baltimore and Cleveland went bad was not because of the not signing star players, it was because they were bad because they never had any young players come through like the A's do.

Manny was offered a contract with the Indians, it was just Boston offered a whole lot more. Arod was offered a contract from the Mariners, but he was given 250 million by Hicks in Texas. It's one thing to not try to sign your star players, it's another to be outbid by a significant amount.

Those teams once their star players go a little old, they never had a farm system to replinish their team.

You say the those teams declined and in return, the attendance will to. Well, Cleveland and Baltimore after their stretch of winning still drew well over the 2.7-3 million even with a bad team. The ballpark aura will last a few years even with a bad team but it's up to the gm to help rebuild the team. Those teams had a 2 year run of losing and still draw well and then they had to chance to rebuild the team with their farm system and with some mid level free agents but they didn't and they prolonged their agony.

I don't see that happening with the A's because their farm system shoots out a player that gives you hope for the future. Plus, their gm whether ti be Beane or Paul at that time would know make the team competitive instead of having it go down the toilet like Cleveland and Baltimore did.

ARod left Seattle but they used the money to sign players like Ichiro, Olerud, Boone to contracts. It's not like the Mariners stood pat and felt sorry for themselves.

I think if Beane had the money, he would give a true effort in signing Tejada, Chavy, and the Big 3. Now, he's trying to spin that they are interested so he can save face for his boss.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By eyleenn on Friday, December 12, 2003 - 10:29 am:

This is from today's NYTimes:

December 12, 2003
In Milwaukee, a Bookkeeping Brouhaha
By PAT BORZI

he sign on West Bluemound Road advertises the place as "Milwaukee's Oldest Custard Stand, Since 1938." For decades, the unpretentious Gilles Frozen Custard has been the favorite lunch stop for baseball's commissioner, Bud Selig, a place where he can grab a hot dog and gab about the team closest to his heart, the Milwaukee Brewers.

All five inside tables at Gilles (pronounced GILL-eez) were occupied when Selig walked in one recent afternoon, in a rumpled overcoat with a cellphone pressed to his ear.

"Speak of the devil," said Frank Cimermancic, a frequent Gilles patron who had been talking about the Brewers. Cimermancic and Scott Miller, who work at Harley-Davidson offices nearby, watched Selig pick up his food and retreat to the comfort of his black Lexus sedan.

Selig is a legendary Everyman figure in this city on the western shore of Lake Michigan, respected for buying the Seattle Pilots and bringing baseball back here in 1970, five years after the Braves left for Atlanta. But lately, the Brewers are a subject that the usually approachable Selig has apparently been avoiding.

In recent weeks, Wisconsin politicians and taxpayers have assailed the Brewers for appearing to renege on a promise to increase payroll and improve the team if the state built them a new stadium. Miller Park, financed primarily with public money and loans, opened in 2001.

But even with increased revenue-sharing income from Major League Baseball, a combination of mounting debt and declining attendance forced the Brewers to reduce their payroll to $40.6 million last season from $52.7 million in 2002. The club's board of directors then recommended a further reduction to about $30 million next year.

The team's president, Ulice Payne Jr., who was hired to great fanfare in September 2002 as the first African-American to be a major league team's top executive, expressed concern about the board's thinking to The Milwaukee Journal Sentinel last month and, as a result, was forced out a little more than a year into a five-year contract. (Payne's settlement with the team included a confidentiality agreement; he did not respond to an interview request from The New York Times.)

Payroll constraints then forced General Manager Doug Melvin to trade the team's highest-paid and most popular player, first baseman Richie Sexson, to the Arizona Diamondbacks on Dec. 1.

From the bars and restaurants on Water Street in Milwaukee to the legislative offices in Madison, the state capital, people want to know why the Brewers are cutting back when the state gave them exactly what they said they needed to thrive: a retractable-roof stadium at a cost of about $400 million.

Last week, the Brewers agreed to let an independent, three-person panel of Milwaukee-area C.E.O.'s review their finances and give a public accounting, a humbling step for a franchise trying to regain public confidence. And state legislators have called on the Brewers to allow their financial records to be scrutinized by the state's Legislative Audit Bureau.

"They have a massive credibility problem that will be difficult if they don't come clean with the people who helped build the stadium," said Assembly Speaker John Gard. "That credibility problem is with the people they're trying to convince to take money out of their pockets to go to Miller Park."

Two years ago, Selig tried to eliminate the Minnesota Twins and the the Montreal Expos by contraction. But the team he nurtured for so long is now in worse shape than either of those franchises.

The Brewers have had 11 consecutive losing seasons, tying the Pittsburgh Pirates for baseball's longest active streak of futility, and they last made the playoffs in 1982. Attendance at Miller Park, which peaked at 2.81 million in its first season, dropped to 1.7 million last year.

People like Gard, who supported the controversial stadium funding bill that passed in 1995, want to know how the Brewers amassed $110 million in debt a figure that team officials confirmed and whether the franchise can survive here.

"I think we have a right to ask tough questions, because the future of the franchise is on the cusp right now," Gard said. "What is the financial stability long-term of the franchise? There are some people who would suggest D-Day is coming within the next 24 months. What is the future here if attendance continues to decline?"

Selig is the largest shareholder in the ownership group; he put his 30 percent share of the Brewers in a blind trust after becoming the permanent commissioner of Major League Baseball in 1998. He has refrained from saying anything about the team or its financial footing, and he did not respond to interview requests from The Times. Neither did Wendy Selig-Prieb, Selig's daughter and the chairwoman of the club's board of directors.

"People feel like they've been lied to," said Cimermancic, who dropped his partial season tickets after the Brewers lost a franchise-record 106 games in 2002. "I don't feel lied to. I'm sure it wasn't a lie per se, because that presumes it was premeditated. They had a business model and a forecast in place, and the world changed for them. People look for evil in their intent, but I don't think there was evil."

Others, like Milwaukee Mayor John O. Norquist, aren't as forgiving.

"This is the issue," he said. "They just let everybody know they have $110 million in operating debt, and that's why they have to cut back on player salaries. My question is, what caused it? What was it spent on?

"The Seligs really aren't rich enough to be baseball owners, at least not in this day and age not if they have to cut player salaries down to the bottom of the league after getting half a billion dollars to build this stadium."

Rick Schlesinger, the Brewers' vice president for business operations, said the team lost money throughout the 1990's playing in County Stadium and accumulated most of its debt by borrowing to pay its bills. The owners contributed $90 million toward the new stadium, much of it borrowed.

A larger income via revenue sharing the Brewers received $15 million last season does not make up for the loss of income from ticket sales and concessions, Schlesinger said. The Brewers, he said, must draw two million fans in 2004 to break even.

Meanwhile, the team is seeking new investors. Schlesinger confirmed that members of the ownership group committed $44 million to the team over the past six years, with Selig contributing about $13.2 million.

The discord over the stadium goes back more than a decade, to the debate over whether it should have been built and who would pay for it. Scott Walker, the Milwaukee County executive, was a state assemblyman when the stadium bill passed, and he remembers it as "the most polarized issue I ever dealt with in eight and a half years as a legislator, even more so than abortion or gun control."

How polarized? As part of the financing, the final bill included a one-tenth-of-a-cent sales tax imposed in Milwaukee County and four surrounding counties. George Petak, a Republican from Racine who cast the deciding vote on the bill in the State Senate, was recalled one year later. Walker said he voted for the bill after polling constituents and finding that most favored it.

The Brewers and their supporters expected a renaissance similar to Cleveland and Baltimore, cities whose teams enjoyed years of booming attendance and increased revenue after moving to new ballparks in the 1990's. But there were problems. A series of poor drafts in the mid-to-late 1990's left the Brewers bereft of young talent. They raised their payroll when salaries skyrocketed throughout baseball, but the high-priced veterans they brought in Jeff Hammonds, Eric Young and Jeromy Burnitz among them didn't make much of an impact.

High-revenue teams like the Yankees have the financial wherewithal to overcome a personnel mistake. The Brewers, with their debt, do not. "You have to sell a lot of tickets to support one $10 million player," Melvin said.

The 2002 Brewers lost a club-record 106 games and drew about 850,000 fewer fans than the year before.

Last year, the Brewers released Hammonds two months into the final season of a three-year, $22 million deal. Now, Melvin said, the plan is to rebuild from a replenished farm system, though the bulk of those prospects are not expected in the majors until 2005.

"I see our model similar to what Minnesota's is," said Melvin, which means developing the cornerstones of the team instead of signing costly free agents.

Critics of Selig's delight in the irony of the Brewers using a franchise that Selig tried to eliminate as the blueprint for rebuilding.

Some Brewers fans grew optimistic in the second half of last season, when the team won more regularly and ended up with 12 more victories than the year before. But the Payne fiasco and further payroll paring left club officials in a tough position.

"This is not a great environment to sell season tickets," Schlesinger said.

So now the Brewers have agreed to a public review of their finances. And Schlesinger is holding daily meetings with season-ticket holders and sponsors, emphasizing the team's late-season improvement.

"I don't know if it's the Midwestern thing, but we tend to be fairly forgiving and generous to our teams," said Walker, who takes his two sons, ages 8 and 9, to Brewers games.

"The big difference for the Brewers is the 2004 season. They talk about the farm teams and the drafts. But what is going to put butts in the seasons in 2004? That's going to be the biggest challenge for the average fan and for the season-ticket holders. Is it worth buying the package again?"

The future of the team that Bud Selig brought here depends on a favorable answer.

Top of pagePrevious messageNext messageBottom of pageLink to this message   By tekgraf on Friday, December 12, 2003 - 01:46 pm:

All I can say is: ba-huh!

Top of pagePrevious messageNext messageBottom of pageLink to this message   By eyleenn on Sunday, December 21, 2003 - 06:03 pm:

From Andrew Zimbalist in today's NYTimes:

December 21, 2003
BACKTALK
Baseball Makes a Mess in Milwaukee
By ANDREW ZIMBALIST

Tommy G. Thompson played a key role in the building of Miller Park in Milwaukee with public money while he was governor of Wisconsin. Like many other residents of the state, he feels a bit jilted.

"The Brewers made it clear that if we built a modern, state-of-the-art stadium, it would provide them with the resources to field a winning baseball team," Thompson, now the secretary of health and human services, said. "The Brewers need to put an end to the games. They need to invest in a winning team."

Other politicians are more outspoken. Referring to the family that owns the Brewers, State Senator Mike Ellis said, "The Seligs just scammed the living dickens out of the people of this state."

It was agreed in 1995 that a retractable-roof stadium would be built for the team. The stadium was ready for the 2001 season. When it opened, the Brewers had not won a divisional race for 19 years and had not had a winning season in eight years. Each of the three years in their new digs, the Brewers have had a substantially lower winning percentage than in any year from 1995 to 2000.

When the deal was hammered out, the stadium was to cost $250 million, with the Brewers contributing $90 million. The Brewers were to receive (and have received) all revenue from the stadium, even from events other than baseball.

The state's Legislative Audit Bureau reported that as of the end of 2001 the stadium's total cost rose to nearly $425 million. The Brewers' share stayed at $90 million, $41.1 million of which came from a 20-year naming-rights deal with the Miller Brewing Company. The balance appears to have been borrowed by the team, and $36 million of the associated team debt was canceled by the quasipublic Stadium District in September 2002.

The Stadium District was supposed to contribute $3.85 million a year toward maintenance and repairs, costs normally assumed by the team. For ending that obligation, the Brewers' debt to the district was extinguished. The upshot is that the Brewers appear to be contributing only about $13 million of their own funds to stadium construction, and the audit bureau is concerned that the ballpark may suffer from inadequate maintenance resources over the years.

Meanwhile, the Brewers' ownership has decided that the team cannot be competitive in the near term. The opening-day payroll was reduced from $52.7 million in 2002 to $40.6 million in 2003 and to a projected $30 million for 2004. (The Brewers have dumped the salaries of seven of their higher-paid players from last season.) Fans want to know what happened to the promise of a competitive team.

Fans might also want to know what the Brewers are doing with their revenue-sharing money from Major League Baseball. During the labor negotiations, Bud Selig, who put his 30 percent interest in the Brewers in a blind trust after becoming commissioner in 1998, reportedly insisted that the new agreement restructure the revenue-sharing plan so that the third quartile of teams receive a proportionately larger benefit than the bottom quartile.

His family's Brewers just happen to be in the third quartile and just happen to have increased their net revenue-sharing receipts by more than any other team. It rose from $1.5 million in 2001 to $9.1 million in 2002 to an estimated $18 million in 2003, according to a financial analysis the Brewers provided to potential investors in July.

The labor agreement is clear that each club must use its receipts "in an effort to improve its performance on the field" and that the commissioner "shall enforce this obligation." Thus, the Brewers appear to be violating their covenants with the people of Wisconsin and with the players' union, as the commissioner seems to be idly standing by.

Do the Brewers have a defense? First, we have heard that the team is loaded with $110 million in debt. True enough, but this is about the average debt level for a major league team. Much of this debt appears to be from the stadium. (The naming rights are paid over 20 years, so some of the team's share had to be financed.) That is, this debt is the product of an investment, not a bleeding income statement. Indeed, the Brewers' own financial analysis shows a $20.24 million operating profit for their three years in Miller Park.

Some additional debt may have been taken on when the 29 teams bought the Montreal Expos two years ago for $120 million. This is also an investment that should yield healthy returns when the Expos are sold.

Second, the Brewers will say that they are rebuilding and that all teams go in a cycle. Never mind that the team has been rebuilding for 11 years and never mind that General Manager Doug Melvin says they want to emulate Minnesota (a team Selig tried to eliminate three years ago and whose opening-day payroll grew from $40.2 million in 2002 to $55.6 million in 2003). The real point is that the team can be developing its minor league talent at the same time that it acquires new major league talent.

The team needs pitching and a right fielder; many promising young players have been available at a range of prices this off-season, but the Brewers haven't shown any interest. If a new stadium is to be successful in generating revenue, the product on the playing field must be attractive. By refusing to invest in today's team, the Brewers are squandering the rich revenue opportunities of a new stadium as well as breaking the bonds of trust with their fans.

And if the Brewers were really sacrificing 2004 to be strong in 2005 and 2006, why do their projections for payroll and player development expenditures remain flat from 2004 through 2006? Something here doesn't compute.


Andrew Zimbalist, professor of economics at Smith College, is author of "May the Best Team Win: Baseball Economics and Public Policy."


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