Corporate Welfare: America’s Other Favorite Pastime
-by Senator Chris Larson
What Wisconsin company is worth more than 7 times what it was 17 years ago (now $1.6 billion), averages $20.6 million per year in profit, pays no property tax on 265 acres of land, and has received $1.5 billion in public benefits since 1996?
Keen political observers might have some guesses as to which corporation is being referred to here. Most would be wrong.
The answer is the Milwaukee Brewers, whose owners are now asking for over $600 million in additional taxpayer funds— not for anything new— but to maintain and improve their stadium for 20 years beyond the existing lease.
As a state senator, I have conversations with constituents and other Wisconsin neighbors on a daily basis. I can’t recall a single person coming up to me and asking me to give the Brewers owners even more of their hard-earned money. It is my job to do the people’s will and to be a good steward of taxpayer dollars. Corporate welfare like this fails on both counts.
According to a peer-reviewed 2022 study in the Journal of Economic Surveys, “nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits… the deep agreement in research findings demonstrates that sports venues are not an appropriate channel for local economic development policy.”
Rick Paulist from the Atlantic Monthly was even less kind in his analysis: “Imagine a stadium as a giant drain. Money flows from the community into the stadium, where it whirls around for a bit, then funnels down some murky pipes, exiting far, far away. Some leaves with players, some with owners and ownership groups, some with the league itself.”
No reputable economist believes that massive public subsidies for pro sports arenas are good investments. And yet, such subsidies are being debated all across the county, with no signs of stopping anytime soon. It makes perfect sense if you look at it from the owners’ perspectives.
Mark Attanasio bought the Brewers in 2005 for $223 million. The team has been profitable every year of his ownership except the covid-stalled 2020 season. It is now worth a whopping $1.605 billion. He could sell the team, pay for the requested $600 million in stadium renovations out of his own pocket, and still come out of the deal $1 billion richer. We’re talking about millionaires and billionaires making hundreds of millions of dollars on cannot-lose investments. The only part of pro sports that doesn’t appreciate in value over time is the stadiums themselves. Ask any private business owner— if they could keep all the profits from their business and outsource all of their capital liabilities to someone else, they’d take that deal every single time.
That doesn’t mean we as taxpayers should fall for it. Why are we asking our neighbors to pad a billionaire’s fortunes while our public schools and local governments remain chronically underfunded? How many local playing fields could we build or improve for $600 million? Why don’t we give that a try instead?
Major sports team owners have a well defined script they follow in community after community: a sudden request for taxpayer cash, a vague threat that the team might leave if politicians don’t give the rich folks what they want, a limited time for the public to weigh in, and finally a vote for a pile of cash for the team’s owners with questionable benefit in return. We have already seen the Brewers ownership spend more on lobbying than any other entity for the first half of the year— and that was before a stadium financing bill was even introduced.
Well, we do have a bill now, and while the final details are still being negotiated, what’s being proposed includes at least $135 million in subsidies from the City and County of Milwaukee. That’s right, a profitable pro sports team owner is jumping to the front of the line to get some of the new sales tax generated by the City and County of Milwaukee before the tax has even been enacted— even as the community needs which precipitated these sales taxes have been piling up for decades. It’s obscene.
By now we’ve established that stadium subsidies are not a good investment, and that state and local governments have much better things to spend their limited resources on than a playground for millionaires and billionaires. However, the Democratic Governor of Wisconsin, Tony Evers, has indicated he will likely sign any stadium funding plan that comes across his desk. The very fact we’re having this debate at all indicates that there is at least a group of state legislators who are motivated to get something done.
Can a “good” deal be found? What would that look like? It starts with insisting on tangible public benefits in exchange for the significant public costs— costs that have already totaled over $1.5 billion, and would quickly eclipse $2 billion if the current legislation goes through. Realistically, we’re never going to get Mark Attanasio to give taxpayers their $1.5 billion dollars back, but here are some things we could do to soften the blow of what’s to come:
Increase the public/private split to 50/50 at worst. The Milwaukee Bucks built a new arena less than a decade ago with these exact parameters— and the owners were responsible for any cost overruns during construction.
Sell the stadium to the team for $1— and let them deal with any future maintenance needs
Demand a $15 million minimum wage, full benefits, and union rights for all stadium-related jobs
Open up a portion of the massive, untaxed parking lot for taxable commercial and/or residential development
Institute a stadium fee on all purchases within the confines of the stadium to go toward stadium repairs and improvements. If the owners refuse to pony up, the people who actually use the facility should be the ones who pay the most for its upkeep.
Get rid of the local contribution from Milwaukee, which has much, much bigger fish to fry than keeping a pro sports team happy and lining the owner’s pockets.
The final, and most impactful improvement that could be made to the current stadium deal is also the one least likely to happen. Major League Baseball’s ownership cartel has decided that maximizing profit is more important than creating the best product on the field or securing the long-term stability of the league. As such, they’ve decided to outlaw public ownership of MLB franchises. But public ownership may actually be the best thing that could happen to the sport. That is a discussion for another day.
The least the team could do in exchange for the massive benefits they stand to receive is agree to an equity share for taxpayers equivalent to their significant financial investment. Whenever the owner decides to sell the team, be it tomorrow or 30 years from now, the public could claw back dollar-for-dollar the money they invested to subsidize the creation of that enormous resale value in the first place.
It’s time for cities and states across the country, and even the federal government, to wake up and fight back against the legalized extortion pro sports leagues have perpetrated against our communities for decades. We’re starting to see signs of that in Las Vegas, Baltimore, and Arizona. When it comes to massive giveaways for pro sports, perhaps Milwaukee and Wisconsin can be the first in the modern era to “Just Say No!”
Chis Larson isn’t just writing about this battle, he’s leading this fight in the state Senate in Madison. And, by the way, he’s also up for reelection. Please consider contributing to his campaign here.