Holding out on billionaires may be smarter/cheaper gamble
It looks as though the state of Wisconsin is ready to cave to the billionaires and sign off on a new Milwaukee Bucks arena.
Democrats were called into talks for the first time Tuesday and were close to making a deal with Republicans on spending $250 million for the estimated $500 million facility.
“For the first time, I think we’re at the table about what will make a win for everyone involved,” Sen. Lena Taylor (D-Milwaukee) told reporters.
But spending $250 million doesn’t seem like a win, especially when you consider that, if the state just held out on the billionaire owners, they might just be forced to build their own stadium or lose the team.
Even more foolish if you watch last Sunday’s episode of Last Week Tonight with John Oliver.
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When Herb Kohl sold the Bucks to billionaires Wesley Edens and Marc Lasry, it was under the requirement the team be kept in Milwaukee.
But the NBA also required Milwaukee have a new arena ready by November, 2017 or it would buy the Bucks back for $575 million – $50 million more than purchase price.
Between that time and now, however, the L.A. Clippers were sold for $2 billion, which skyrocketed the value of every team in the NBA, giving a reason for Wisconsin to hold out.
Because, if the NBA buys the team back and offers to move the Bucks to, rumored, Seattle or Las Vegas, the franchise’s worth is estimated around $1.6 billion.
That means the new owners would stand to lose nearly $1 billion by not kicking in $250 million more for the arena deal to be completed. Not to mention, they’d potentially lose the team.
It’s unclear if the new owners would have exclusive rights to buy the team back from the NBA, or if they would have to submit their bid along with other potential buyers.
If the owners were given exclusive rights – which seems unlikely – then Wisconsin may want to make the deal to build the arena to keep one of only 30 franchises in the world in a sport that’s growing exponentially in popularity.
Because it may be in the new ownership’s best interest to spend the extra $1 billion to buy the team back and move it to a larger market, rather than keep the Bucks in Wisconsin, where support has dwindled after over a decade of uninspiring play.
Is the risk worth it? Are the Bucks that important to Milwaukee or Wisconsin?