• WisBusiness

WisBiz In-Depth: For Sale: Milwaukee Pro Sports
7/12/2004

By Gregg Hoffmann

The formal announcement of the sale of the Milwaukee Admirals’ hockey franchise likely will come before Labor Day.

Some national investors have expressed interest in buying the Brewers, who were put on the block last winter by the Selig ownership group.

While U.S. Sen. Herb Kohl technically took the Bucks off the block last season, it’s known he will entertain offers. And, there are rumors of an attempt to buy the NBA franchise by a consortium of some sort.

Some say the very fact “For Sale” signs have gone up on the city's pro teams indicate that Milwaukee no longer is a good sports town in this day of astronomical salaries and the importance of big-market TV revenue. Others say Milwaukee-area taxpayers have contributed too much for sports already. Still others dispute those claims and ask: “Why would there be reports of prospective buyers if the market was no good?”

What does it say about Milwaukee as a pro sports market when “For Sale” signs are hanging on three of the city’s franchises? What challenges, or obstacles, do pro sports in Brew City face?

“I think it just shows a natural transition after very stable sports ownership for Milwaukee teams,” said Phil Witliff, an Admirals’ executive who has been with the franchise since his playing days.

“The Selig group is the longest ownership in baseball. Jane Pettit owned the Admirals for 20 years. Herb has owned the Bucks for more than 15 years. I believe it shows the commitment of these owners.”

Witliff pointed out that keeping franchises in Milwaukee has been the priority of all of these owners, even if the teams have not been profitable.

In the Admirals’ case, a group that is said to include Nashville Predators’ owner Craig Leipold, a son-in-law of the late Sam Johnson, was expected to buy the team by now. Without naming any names, Witliff said getting all the principals together has taken longer than expected, but that the sale should still happen by the end of summer.

The process also might have been delayed because of the talk of a work stoppage in the NHL this coming season. Leipold’s franchise is not in a traditional hockey market, so he might have concerns about adding a minor league ownership to his holdings during what could be a tough time for pro hockey. But the NHL situation is not expected to be a deal buster for the Admirals.

Managers of the Jane Pettit trust fund have made it clear they have no long-range interest in owning a hockey franchise. The late Bradley heir stipulated, however, that the team should not be sold unless it can remain in Milwaukee.

The Admirals have assets. They won the American Hockey League championship last season and play in a nice hockey venue at the Bradley Center. Their main problem always has been surviving as a minor league franchise in a major league sports market.

Leipold’s Predators are the NHL affiliate of the Admirals, so it seems like a natural to have Leipold buy the team. But Leipold might not end up as the main owner, according to some sources.

Brewers draw some interest

The Brewers have drawn interest from multiple groups, according to some media reports. But no local investors have publicly said they are involved.

Harris Turer, a member of the current board of directors, has said he would like to be part of a new ownership group, but no other mover and shaker in town has gone public with a similar hope.

“There are groups that have shown due diligence in pursuing the possibility of a sale. Whether that leads to an actual offer we have to wait to see,” said Brewers’ executive Laurel Prieb.

The groups do not include local investors at this time, but “some of the current owners” could end up being part of a consortium, according to Prieb. The Seligs also are not concerned about buyers from elsewhere in the country, he said, because the lease at Miller Park is ironclad and would not allow a move of the team.

“We keep saying that, but people keep asking, ‘Could the team be moved?’ People just don’t seem to believe it,” Prieb said.

The Brewers are said to be on the market for about $180 million. Their assets include an improving ballclub with a low payroll, a farm system that was picked as the best in baseball last season, a revised revenue-sharing system that helps small-market franchises, and a relatively new venue in Miller Park.

Negatives for the Brewers include one of the smallest media revenue markets in pro sports, debt said to exceed $110 million and leftover resentment and controversy over the financing of Miller Park.

Miller Park has had its problems, most recently with some bearings in the roof mechanism. It is not clear if those difficulties could present a hang-up in a sale.

A recent series in the Washington Post was quite critical of the process for gaining financing for Miller Park and Bud Selig, current commissioner of baseball and longtime head of the Brewers’ ownership group. Selig and former GOP Gov. Tommy Thompson openly ripped each other in the series and are said to not be on talking terms.

Bucks ownership

Kohl could have sold to a group headed by former NBA great Michael Jordan last summer, but reportedly could not get a guarantee that His Airness would keep the team in Milwaukee.

Although Kohl is not actively marketing the team, rumors have surfaced of more than one group of local and national investors who are interested in the Bucks. Jordan has even been rumored to be part of one of the groups.

“I am absolutely focused on seeing the team stays here, which it will,” Kohl said in a May 2003 interview with WisBusiness.com. “When the team is sold, I have no idea when it will happen, because I have no timetable. Who knows? I might be an owner for a long, long time, because I'm not just out to sell it.

“I'm looking to work with an owner, or a group of people, who will keep the team anchored in Wisconsin. …I'm not going to own the team forever. The process of moving the team into another ownership, whenever that occurs, is something that needs to take place.”

The Bucks have a young, up-and-coming team and a solid, enthusiastic coach in Terry Porter, which are assets. The Bradley Center, one of the Admirals’ assets, is somewhat of a liability for the Bucks.

By NBA standards, the venue already has become a bit outdated. Insider talks about adding amenities and perhaps even expanding the BC have gone on for months. It generally is believed that a Bucks’ sale will not happen until new owners can be guaranteed of some updating to the facility.

“It is sort of dated, only because time goes by,” Kohl said of the arena in that WisBusiness.com interview. “It is among the best-maintained facilities in the league, and people are constantly amazed from around the league when they come to Milwaukee. They marvel at what good shape it is in. People who run the Bradley Center deserve great credit for the way they have maintained it.

”So, that's not the issue. The issue is the amenities, parking, just everything associated with brand new facilities. If you travel around the circuit of the NBA, you see facility after facility, the new ones, that are so attractive. They really are destinations. You go there because there is so much going on -- eating, entertainment, videos arcades, all kinds of things that make it an experience.”

Soccer franchises

Two pro soccer franchises, the indoor Wave and outdoor Wave United, are owned by a group headed by Tim Krause. Both teams have enjoyed competitive success, but draw limited crowds.

But Krause and his investors think big. The Milwaukee teams are linked to a franchise in England, and some plans for international competition have been discussed.

Krause also proposed a 20,000-capacity soccer stadium for downtown Milwaukee a couple years ago, but the proposal received a rather cool reception because it would have been on a site where the Bradley Center board would like to expand.

The proposal also called for takeover of the stadium and BC operations by a pro sports entertainment company. That did not sit well with the BC people and others.

A major asset for the indoor Wave was a move from the BC to the U.S. Cellular Arena last season. The team’s crowds often looked lost in the BC, but the smaller Arena provides a more intimate, exciting environment.

The soccer franchises have not been advertised for sale; in fact, owners seem to be looking to expand.

Over-extended market?

Witliff and others insist that the “For Sale” signs for the other three franchises do not mean Milwaukee is dwindling as a pro sports market. In fact, some people feel it could be poised to enter another golden era, not unlike the late 1970s and '80s, when the Brewers regularly won and Don Nelson’s Bucks earned division titles practically every year.

Yet a study by Street & Smith’s Sports Business Journal last year reported that Milwaukee ranked as the sixth most “over-extended” sports market in the country.

The study found a $21 million deficit between the income base of the Milwaukee community and the cost of doing business in pro sports.

The findings contrasted sharply with an ESPN Magazine story, released around the same time, that rated the Packers as the top pro sports franchise. The study that formed the base of that story included financial stability.

Some have questioned why the Packers can be so stable, while teams in a bigger market of Milwaukee have always been considered fragile. Insiders will tell you some of it has to do with management, especially since Bob Harlan took over as president of the Packers.

Probably a bigger factor is the TV revenue structure of the NFL, which gives the Packers as much money from television as teams in much larger markets. Also helping the Pack are the overall popularity of football and the fact that the NFL plays only once a week, while teams in Milwaukee play virtually daily, in the case of baseball, and several times per week in case of the other teams.

The Packers also have a long tradition of enjoying the label of Wisconsin’s team -- if not also America’s Team at certain times in their history.

While the Packers are riding high, Harlan is the first to admit that the franchise could face difficulties if the NFL ever changed its TV revenue-sharing system. The renovation of Lambeau Field also was billed as a necessity for protecting against future financial threats.

Meanwhile, back in Milwaukee, the long term future of pro sports in the market could be determined once the “For Sale” signs are taken down and new owners take over the hockey, baseball and basketball franchises.

--Hoffmann is a veteran journalist, former writer of the WisPolitics.com Milwaukee Insight column and has covered Milwaukee sports for more than 27 years. He writes WisBiz In-Depth about statewide business stories.
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