Pre-draft workouts aside, the Bradley Center’s sponsorship agreement with BMO Harris Bank (and other local businesses) has been the top headline of the Milwaukee Bucks’ 2012 offseason.
This past week, Behind The Buck Pass was privileged to sit down with Marc Marotta, board chairman of the BMO Harris Bradley Center, to discuss the impact of this six year, $18 million partnership, and how it impacts the looming discussion about the viability of a new sports and entertainment arena in downtown Milwaukee.
You were quoted as calling the recent name change to the Bradley Center a “positive development.” Can you expand on that?
(This was essential) in order to maintain the BMO Bradley Center as an economically viable entity that can host tenants in a way that this community expects. Whether it be hosting top-flight concerts, or having an NBA team, or having a big time college basketball program. In order to be an economically viable entity, we had to generate significantly more money than we’re generating today.
There are a number of parts to that effort to generate significant revenue. A very important piece of that is the Champions of the Community effort. That getting done the way it got done as quickly as it got done was a positive development. (The Bradley Center) is about a 25 year old facility; as a result of that, we have a year-over-year deficit of about $12 to $14 million in terms of the amount of money we can generate versus other facilities in markets like ours.
(For example), we have 7,500 seats in the lower bowl. The average NBA facility has 10,000 seats. Those are seat you can sell for much more. We control 1,000 parking spaces. The average NBA facility controls 3,000. Most facilities have naming rights. We certainly had this incredible gift, there wasn’t the annual revenue coming in from naming rights, as is the cases with other venues.
There are not really any areas for club seats. There’s not much you can do to generate more club seats. We’ve got to make up that gap in order to remain competitive.
What’s the next step from here?
When we call them “naming rights” we call them “naming partnership rights.” BMO Harris Bank does view themselves as a partner of the family. As I’ve said before, the Bradley name will always be on the building. Over the next couple weeks, there’ll be a couple other things announced in terms of the corporate support for our efforts.
The community has to start thinking today about how we are going to get to that point with a new facility. How are we going to finance it, what is the design going to look like, how is the political support and public support going to come about, etc. You have to make a case for these sorts of things; it involves time, attention and telling a story. That may not mean a great deal of public work being done today, but certainly there’s got to be some preparatory work.
We’re in a little bit of an interesting situation. The Bradley Center board is charged with dealing with the Bradley Center, not the new arena. But we’re in a position, obviously, to be in the middle of that argument. We operate the current facility; people in the Bradley Center know more about operating a facility and what it takes than anyone else in Milwaukee.
Part of (Jane Bradley’s) gift, was to make sure we have big time sports and entertainment here in Milwaukee. If that involves a new facility at some point, I believe we’ll be in the middle of it.
What would you expect from a new arena as both an entertainment and basketball venue?
While the Bucks tend to be the tenant that uses it the most, Marquette is obviously a big tenant. The Milwaukee Admirals provide great, affordable entertainment. The Milwaukee Mustangs arena football does the same. Outside of the world of sports, we’ve got the ability to bring in high quality international performers. The only way you can do that now, given how competitive it is, is to provide revenue guarantees for these performers.
The only way to provide guarantees is if you’ve got enough revenue supporting your facility. When you talk about getting these big acts, they want facilities to take some risks. As a community, if we want to make sure we have quality entertainment, we have to generate more revenue out of the facility.
Attracting family programming, whether it be Sesame Street or dinosaurshows, is all connected. That’s a piece of it that often gets overlooked because everybody focuses on the Bucks and Senator Kohl. They account for 40% of dates, but not over 50%. One out of every four people in the Southeastern Wisconsin region go to the Bradley Center at least once a year, many of whom are there for reasons other than NBA basketball.
How closely have you been following the stadium battles in Minnesota and Sacramento, with the Vikings and Kings. Do you see any parallels to what’s going on in Milwaukee with the Bradley Center?
Oh yeah. I think that football tends to be a little different than basketball. While we’ve paid attention to the situation in Minnesota, we pay attention to all of the renovations; for example, Banker’s Life Fieldhouse (in Indianapolis) is getting $10 million a year to support operating losses. In cities like Indianapolis and Milwaukee, public funding is critical to these venues.
Sacramento is an interesting case. There was a deal cut, but there’s not enough money. At some point the Maloofs realized this doesn’t help them. There’s not enough money going to support the NBA franchise. So that deal fell apart; hopefully they reach common ground, but we do follow what’s going on in other markets.
Sen. Herb Kohl has pledged to commit some of his own money to a new arena, but the rest of the money has to come from somewhere. You’ve already mentioned public funds, which are almost certain to bring on some public opposition. How would you approach people skeptical of paying for a new facility?
It’s imperative that we continue to tell the story about what it takes to have a vibrant sports and entertainment center in Milwaukee, and how important that is, not just to fans, that come to see the game, but to the image of the city nationally, and its overall quality of life. That’s going to be an ongoing effort; any kind of financing plan is going to require some public support.
You don’t see many facilities that are privately financed in markets like ours. Even those issues need to get some public support. When Jane (Bradley) made her initial gift, there were still public debates about its location, etc. I think we’ve got to view the public story as an ongoing task.
It seems inevitable that opponents of a new arena are going to call it a waste of taxpayer money, and argue that the economic impact of no NBA team (or updated facility) is barely noticeable. How would you counter that argument?
There are a lot of studies that counter that view. One recently by the MMAC shows the Bradley Center has an enormous economic impact. While I truly believe that, there are people that make arguments that it’s just moving money from one function to another; that if you didn’t spend it on the Bucks, you’d spend it on movies or some other form of entertainment.
You can debate a bunch of studies, but these facilities are in place because they enhance our quality of life. In addition to our economic argument, when you’re able to go to an event at the Bradley Center and see Bruce Springsteen play, think about the experience; the electricity and talent and energy that comes from a performance like that. When you go to watch a Dwyane Wade or Jae Crowder perform at a high level in a Big East game with your kids, or watch Brandon Jennings light it up, those are the things you cant put a price on.
That’s why we have sports and entertainment; because we love it. It makes this a much better place to live and to work and to play, compared to places that don’t offer this opportunity. We can have the economic fight all we want, but think about what a place like this does for our image all across the country, and internationally. What does that do for the decision by employers deciding to expand or re-locate here?
Those kinds of intangible factors are indisputable, and really operate at a level above the whole economic debate.
What are your impressions about Sen. Kohl’s commitment to partially funding a new arena?
He’s spent a lot of his own personal time and resources and energy enhancing and maintaining sports in Wisconsin. Whether in Madison or Milwaukee, he’s very committed to this. There are those out there who think he’s crazy; that he should just sell the team to the highest bidder, pocket the money and go on.
Part of his legacy here, and commitment to the community, is to keep this team here. I think we owe him a great deal of gratitude. Obviously in this politically charged environment, he’s not going to oftentimes get his due.
People say, “Everybody commits to provide their own dollars to these facilities.” What they commit to is utilizing some of the sponsorship revenue to help support the debt to fund the new facility. What he’s talking about is taking money out of his own pocket today to contribute to the new facility. Not supporting it through team revenue, although some of that will likely be involved. But he’s committed to making a personal contribution when the time comes.