Venue Detail
Milwaukee Brewers
Revenues From Sports Venues Pro Facilities Report
February, 2011
Milwaukee Brewers
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1 Brewers Way Milwaukee, WI 53214 Phone: 414-902-4400 URL: www.milwaukeebrewers.com
Owner
Mark Attanasio
League
Major League Baseball National League, Central
Venue
Miller Park, 1 Brewers Way, Milwaukee, WI 53214 Owner: SE Wis. Professional Baseball Park Dist. & Brewers Managed by: Team Built: 2001 Capacity: 42,500 Permanent concession stands: 27 Concessionaire: Sportservice Suite caterer: Well Bread Catering Beer: MillerCoors
Building sponsors
Clubs/Restaurants: Yes Seating: Yes
Naming rights
Sold to: Miller Brewing Co. Price: $41, 000,000 Term: 20 years Expires: 2021
Ticket prices
Season tickets range from $729 to $5,022 Single tickets range from $14.00 to $48.00
Attendance
2007 average attendance: 35,421 2008 average attendance: 37,882 2009 average attendance: 37,499
Luxury Suites
Quantity: 70 Term: 4 to 7 years Price: $128,000 to $128,000 Seats: 14 to 20
Club seats
Quantity: 3,500 Term: 1 to 1 years Price: $3,200 to $4,200 Includes: In-seat wait service, stadium club.
Financing
The $312 million ballpark is funded with $90 million in funding coming from the Brewers and the balance from a five-county tax increase. Pct. public: 71
Ground was broken for the new $312 million Miller Park in 1996 with the goal of opening the venue in 2000. Those hopes were dashed during a summer afternoon in 1999 when a crane lifting a portion of the retractable roof for the new ballpark collapsed, bringing down a portion of the roof already assembled and damaging the bowl below. Reluctantly the opening was pushed to April 2001.
Insurance covered the construction losses and the team has insurance that will cover some of the lost revenue due to a late opening, but the accident cut into the momentum building for the opening.
As expected, Miller Park generated new revenues, but it fell short of its potential as fans failed to materialize at the venue in its second year. The result is that the team's extra revenue went to pay higher operating and salary expenses, but did not result in significantly higher profits.
The figures were uncovered by the Milwaukee Journal Sentinel which obtained team financial reports from 1998 to 2002. Team officials said the numbers appeared to be accurate.
In its first year, the team was rewarded with 2.81 million fans and $110 million in operating revenue. In its last year at County Stadium, the team earned $68 million in operating revenue. The additional revenue in 2001 was enough for the team to post a $6.7 million profit, compared to a $2.01 million profit the previous year and a $22.34 million loss in 1999.
The following year, in 2002, the team's losing performance on the field cut attendance to 1.97 million and owners had to invest $11.7 million in additional capital. Total operating revenue was $104 million and total operating expenses were $106 million. A reconfiguration of the team's debt allowed it to show a $30.38 million paper profit for 2002, but the newspaper report said the team actually lost $11 million.
Problems continued for the team and in 2004 it was put up for sale. Because the state and the business community invested heavily in the ballpark, both wanted to audit the team's books. The Brewers allowed it, but would only approve limited information for public release.
Two groups of investigators got a chance to look inside the Brewers' books and they came away with a view of a financially underperforming team heavily saddled with debt. One of the reports also raises questions about future upgrades of the team's new Miller Park and advises state officials to keep an eye on reserve funds needed for the work.
The investigative task was undertaken by the state's Legislative Audit Bureau and a committee of business executives assembled by the Metropolitan Milwaukee Association of Commerce (MMAC).
The audit bureau summarized revenues from concessions, parking, tickets and expenses, but did not disclose specific numbers such as individual salaries. It can say how salaries compare with other Major League Baseball teams.
Both reports cited poor attendance as the team's biggest problem. The team was in 26th place among other Major League Baseball teams in 2000, just before the new ballpark opened. In its first year, the Brewers exceeded attendance expectations with more than 2.8 million fans coming through the turnstiles, putting the team in 12th place. Attendance dropped to 1.97 million in 2002 and in 2003, attendance was 1.7 million, putting the team nearly back to its starting point in 25th place nationally.
The drop in attendance flowed through other revenue streams such as concessions and merchandise sales.
The new ballpark allowed the Brewers to make more money, but the team also took on the cost of operating the venue, boosting its expenses. With the additional costs, and with revenue down, the team had to borrow to meet its obligations and it made a cash call to owners to invest more money in the franchise.
The Legislative Audit Bureau's report notes, "The notes to the financial statements indicate that Major League Baseball requires clubs to maintain an assets-to-liabilities ratio ... of at least 60/40 to ensure the financial stability of each franchise. The Brewers did not meet this ratio in seven of the 10 years we reviewed, but they met the league's assets-to-liabilities ratio in the past two years."
The reports also note that the league did not enforce the ratio for several years following the past players' strike. The rule became enforceable again in 1999.
One positive note in the new ballpark came in parking revenues. The team ranked 5th among franchises in parking revenue in 2000 and that climbed to 3rd place in 2002. The team gets all parking revenue at the ballpark.
The team's debt exceeds $133 million and was as high as $171 million as the Brewers moved into their new home. The reports say the average debt for a Major League Baseball team is $120.5 million. The average for the 12 teams that moved into new ballparks since 1994 is $140.1 million. The Brewers, who play in one of the smallest Major League Baseball markets, rank 11th in debt and 6th among those with new ballparks. The reports note it is difficult to compare franchises because of the way the public portion of ballpark financing is structured among the teams.
A portion of the team's debt is related to the $90 million it owed for ballpark construction. More than half of that debt, $50 million, came from local business groups and foundations and was unsecured. It is described in the MMAC report as "non-recourse notes."
The ability to repay that unsecured debt quickly was made possible by a change in the agreement between the team and the stadium district board that oversees the venue. Under the original agreement, the district, which owns 64 percent of the ballpark, was obligated to put money into an annual maintenance and repair fund. The contribution was the lesser of $3.85 million or 64 percent of the defined expenses incurred by the ballpark.
The MMAC report notes the agreement was changed in 2002 to reduce the district's payment to $2.16 million through 2008, saving taxpayers $78 million over the life of the lease.
"In consideration for the reduction in the (maintenance and repair) payments, a portion of the non-recourse notes issued in conjunction with the Brewers investment in Miller Park were retired. Beginning in 2003, all (maintenance and repair) payments were used to fund principal and interest payments on the balance of the non-recourse notes that remained outstanding."
In its closing notes, the Legislative Audit Bureau notes, "Because the District's lease with the Brewers request that major capital repairs 'must be made in a manner consistent with the standards within the top 25 percent of such facilities,' and because improvements necessary 'to keep the facility's quality the same as at least 75 percent of stadium complexes' are also required to be made under the lease agreement, it is important to ensure adequate contributions are made to reserve funds."
The Brewers pay no rent at Miller Park, but do contribute to the capital improvements fund. The team pays $900,000 annually through 2010, $1.2 million from 2011 to 2020 and $1.21 million from 2021 to 2030.
Twenty of the suites were designated as Founder's Suites and lease for 10 years for $1 million. These suites require a $500,000 deposit and another $500,000 in year five.
The ballpark holds 43,000 fans. Miller Brewing Company is paying $41 million for naming rights over 20 years.
In 2006, the ballpark added new premium amenities. The Mercedes-Benz Field Haus, located in the right-field area and the Dew Deck, an all-inclusive area for fans, both experienced strong sales in their first season.
Also located on the club level in the left field corner, the private NYCE Stadium Club offers a panoramic view of the ballpark. The 200-seat, multi-tiered dining room offers a buffet and an outdoor patio area for fans to enjoy the Miller Park atmosphere. (Baseball, Facilities, Financial, MLBVenueReport, Professional Sports)