A New Arena for the Milwaukee Bucks 
by Madeline Collins
Milwaukee Bucks fans have been thoroughly excited by the news of the development of a state-of-the-art arena for the team, accompanied by an open-air entertainment center. This is not only big news for the team, but it is influential for local businesses and taxpayers as well. $500 million is the grand total for the construction of this arena, and everyone is eager to know where this money will be coming from.
Governor Scott Walker has answered the call by developing a plan called the “Pay Their Way” proposal. While the Bucks’ owners are providing at least $150 million, state bonds worth $220 million will be added in, as well as $100 million pledged from former owner Sen. Herb Kohl, causing the total to be $470 million. The cost of a new arena will be about $500 million. See this article to learn more about Walker’s proposal.
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The money still needed to put this plan underway has induced talk among the public and the remaining owners of the Milwaukee Bucks. Many fans agree that the owners should be putting forth a significant portion of the cost. Co-owner Wes Edens commented on the public’s demand for further financing stating, “There is an economic side to it, and it has to be a viable transaction.” Edens elaborated, affirming the owners’ existing financial commitment “kind of pushes the limit” on that viability. Even so, he confirmed that the wealth of the owners “complicates the narrative.” Watch this video for coverage on “The Economics of a New Arena” and how the public has reacted to the resulting cost of this notion.
It is relatively simple to see that the manifestation of this exciting idea is not exactly a quick and easy decision. Even with Scott Walker’s proposed “jox tax” that appears to lessen the trade-offs involved in constructing the arena, there are surprisingly many negative externalities that will likely evolve. While proponents claim that a new arena and surrounding area will help economic growth, increase the employment rate, and increase the Bucks’ revenue, these are actually common false predictions. The new public space replacing the area where the Bradley Center currently is may provide a surplus of restaurants and/or entertainment, causing the surrounding facilities to lose business. Consumers’ discretionary income is limited, and they only have so much money set aside to play with for things that are a couple of hours of fun and then done. This means other entertainment businesses, like movie theaters, could lose revenue because consumers’ money will be placed elsewhere.
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When it comes down to deciding whether or not the arena and surrounding public space is truly worth the cost, the answer depends on our intentions. If we claim that we’re doing it for the economic benefit, then it is not a viable solution; economic growth is not going to be enormous, and the employment rate will not likely skyrocket if other businesses struggle as a result. Long lasting positive effects -- at least not drastic ones -- will not occur unless exports are induced: people from outside of Milwaukee who would not otherwise spend money on the Bucks. However, if we claim that we are doing it to improve the overall quality of life for the team and the fans, then yes, this is a viable solution. If we truly enjoy a night out filled with basketball and good food and drink, then let the construction begin.
Works Cited
"Bucks Announce Game-changing $1 Billion Arena Package." Bucks Announce Game-changing $1 Billion Arena Package. 11 Apr. 2015. Web. 12 Apr. 2015.
"THE ECONOMICS OF A NEW ARENA." YouTube. YouTube. Web. 12 Apr. 2015.
"Walker Proposes Investment of $220 Million for Arena." Walker Proposes Investment of $220 Million for Bucks Arena. 11 Apr. 2015. Web. 12 Apr. 2015.
All of the things that could come from building a new arena could be positive for the community, but I wonder like all the other Bucks fans about where this funding will come from. If the arena is to be built, you raised a good question regarding nearby businesses, and questioned how they would benefit from such construction.
ReplyDeleteThis is a great blog post, very descriptive and talks about where all the money is coming from. I like how you said that the new arena is not just for looks but it is to improve the quality of life of the basketball team and the fans. That is a statement that I think everyone can agree on.
ReplyDeleteThis is a great blog post, very descriptive and talks about where all the money is coming from. I like how you said that the new arena is not just for looks but it is to improve the quality of life of the basketball team and the fans. That is a statement that I think everyone can agree on.
ReplyDeleteI disagree that surrounding businesses will not benefit from this new stadium. I think it will bring in many more people and will causes them to spend money around the area. If anything I don't think it will hurt these businesses. What I do agree on is that the owners should be putting forth most of the money to build this new stadium. Even though 500 million is A LOT, if they think they need it then they should provide the money to do so.
ReplyDeleteWhile most would think that this would help the surrounding businesses economically, I think you took a very interesting stance on it and considered that since new restaurants and stores are being built, it may actually take away business from the original restaurants and stores in the area. However, I feel as though this would be a very small negative externality. Due to the fact that it is a huge expansion and the construction drawing a lot of attention, it will end up bringing in lots of new crowds to make purchases that wouldn’t normally be made, in both the old and new businesses. Construction of the new arena will create new life in the city of Milwaukee, and create a new economic boom that will benefit the city for years to come.
ReplyDeleteEven though the arena is going to cost $500 million dollars, we also need to remember that the entire project is going to cost an estimated $1 billion dollars. The surrounding entertainment centers that the owners and the bucks are proposing would try to create a new sort of entertainment hub for the city of Milwaukee. They are looking to benefit both themselves, and surrounding businesses. It also would in turn create a large number of jobs both temporary and permanent if the entire thing were to fall through. Although like you mentioned there will be a price to pay; especially since there is still quite a bit of money that is left unaccounted for. The only way that they will be able to get this money for certain is if they can make the team feel like "the states team". For example, people from all over the state will drive any amount of time to see the Packers play, they're a Wisconsin icon. Unfortunately we can't say the same about the Bucks. Therefore investors and companies from outside the reaches of southeastern Wisconsin will be reluctant to want to buy in on the idea and fork over large sums of cash. If the Bucks were to continue their late performance and continue to draw interest state wide then they could possibly be able to find funds from across the state to fuel their $1 billion dollar fire.
ReplyDeleteI agree that there are a lot of false hopes for the city of Milwaukee for building the new arena. Creating the arena will bring in construction jobs, however I'm assuming that those who worked at the old arena will get their jobs at the new ones. I can understand that because the new arena is bigger it may need more workers, but it's not enough to make the unemployment rate change significantly. As you put it as well, there will be negative externalities for businesses around it.
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ReplyDeleteThe economic impact of building a new arena is undeniable. While I do think that temporary, seasonal jobs allotted to construction workers and other people will promote economic growth and employment, the long-term economic effects will not necessarily be significant in that respect. The Bradley center makes money now, and the new arena will make a similar amount of money in the future. You also raised an interesting point about how the current arena could be utilized for other businesses like restaurants. While people may have to pick and choose where to place their income, I actually think that these businesses could entice competition, which would benefit the economy rather than hinder it. Either way, the new arena will have an effect on the state as a whole.
I think the success of the stadium and the project is very dependent on how well the team does. If the team continues this success, people will travel much further and be far more interested in seeing them play. They will also be willing to buy memorabilia which can raise quite a bit of money. The problem can come if the team falls apart because all the interest will be gone and they will be left with an expensive project and less revenue.
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ReplyDeleteI do agree that there there seems to be some false hopes surrounding the idea of a new arena, but I do think it will end up creating more jobs for the citizens of Milwaukee. Not even just as the arena but at surrounding businesses as well. Part of me wonders if this would help the surrounding businesses economically such as the new restaurants and stores surrounding, however I can’t help but wonder if the businesses currently in the area will be hurt more than they are helped by this new addition considering the attraction surrounding new restaurants and stores. Though in the grand scheme of things this could end up being a relatively small negative externality when considering the benefits that will come from this edition.
This is a very interesting topic seeing as how the Bucks have gone through a number of new owners, logo changes, and now with the new stadium to be built, the only problem that I see as a potential threat is that with the Bradley Center there are a number of near by parking lots and by moving the stadium to more residential areas wouldn't this create a lack of parking which would greatly be hurt by the number of fans, which I do believe will continue to decline, and under the same circumstances unless the Bucks find a way to actually bring some championships home I feel as though the public won't be very welcoming to the tax increases that would occur, especially when considering the already built, still functional stadium that the Bucks already have.
ReplyDeleteBuilding a new stadium sounds great at first, but I think the success would be rooted in the Bucks success. In order for new stadium to be built that cost $500 million, the bucks need to prove themselves with a winning record. I do agree that the money should mostly come from the owners, but not from tax payers. Personally my family and I are not Bucks fans so we would have no benefit of the stadium.
ReplyDeleteMaking a new stadium for the Bucks would be great but I don’t think it is really necessary to do so. Not only would it cost a lot of taxpayers money, they already have a stadium that is nice. To me it just does not seem like the best time to build a new stadium for the team.
ReplyDeleteI think the overall success of a new stadium depends on the success of the team. If they continue to play the way they are it's going to be hard to see how the new stadium wouldn't thrive. The Bucks are changing a lot right now and to have a new stadium with it would most likely settle well with fans. If it does hurt the surrounding areas, it will make for it self.
ReplyDeleteI think you are right when you say that businesses will lose business and revenue because of the new arena. Another negative externality that the people of downtown Milwaukee would face would be the construction. Nobody is going to want to drive downtown because roads will be closed so that the arena can be build, sidewalks will likely be closed as well. Because of this, the businesses around the arena are going to lose customers for a long period of time, and could lose enough revenue that they will be forced to close or relocate. While jobs will be created for building the arena, jobs will be lost as well if the construction of the arena causes businesses to close or relocate.
ReplyDeleteThis was a great new side of the economic debate surrounding the 500 million dollar bucks arena. I previously hadn’t seen any sort of article that didn’t sing it praise and boast of the new economic activity that would be brought about by this new arena. The negative externalities mentioned in this article showed that building a new arena isn’t the greatest idea and isn’t all that necessary. While building a new arena may be very exciting to some and create a whole new experience for fans of the Bucks it also has lasting side effects. The construction of a new arena would cost the other smaller buildings around it as it would take away from the business that they currently have with the new attractions of the arena. Before making the final decision on this arena people will really have to weigh out the tradeoffs of a new arena.
ReplyDeleteI have heard both the positives and the negatives of this new arena. Spending a billion dollars to build a new stadium when we already have one that has been doing just fine, doesnt make much sense to me, especially if it starts to come out of the taxpayers pockets. I do believe that this will bring in a lot more people who want to check out the billion dollar project, which should increase the sales in the surrounding area, or at least you would think. But im not sure if spending that much on something we already have and make good use out of, will be worth it in the long run.
ReplyDeleteBuilding a $500 million dollar arena and entertainment center for the Bucks seems like a foolish financial decision to me. Building such extravagant places is worth the money and labor in cities such as LA or New York, but Milwaukee just doesn't have the same kind of resources or reputation for a project this size. In addition, the Bucks aren't even a very strong or popular team. Especially compared to the Packers, our basketball team just doesn't have the same enthusiastic fan-following. Sure, Wisconsin's GDP may rise because of all the new goods & services expected to be offered by the new arena. Ticket prices and restaurant/entertainment prices may increase, however, based on the arena's great new quality, yet this may decrease the average customer's demand for tickets. Based on the Law of Demand, consumers would purchase more tickets as the price decreases and purchase less as the price increases. This would potentially cause those consumers to substitute Bucks' tickets for other cheaper entertainment alternatives. Overall, the future is still uncertain for Wisconsin's economic future after the extravagant project, but I predict the GDP may increase after the arena is built and then eventually lower based on high prices, low customer demand, and the amount of substitutes available. In the end, though, probably the largest determinant of the new arena's success is how well the Bucks perform in years to come. If they play well and attract a bigger fan base, the $500 million dollar arena may just be worth it.
ReplyDeleteI beg to differ. If the land of the old bradley center turns into residential and/or industrial buildings, then it is likely that the new stadium will get paid for over the years. when new people and industrial businesses enter the area the production possibilities curve for the city will extend, because we can make more products. The new businesses increase the demand for labor and so long as more people need to get hired than enter the city, which is likely considering the average size of a household, then the demand curve for labor will also shift to the right. Due to this increase in demand, wages will increase, and likewise disposable income leading to people spending more money at their favorite restaurants and Bucks game tickets.
ReplyDeleteThis was very interesting piece to read Madeline! I heard about them building a new stadium and having a new logo as well. Is this a huge turning point for the Bucks or is it just an economic crisis? I like how you mentioned the economic impact of this new stadium. I didn't really think of the different businesses it would effect or possibly ruin. This could be a huge negative externality for different companies surrounding the new construction zone. But this could also be a positive externality. With this, it could provide more businesses and more places for people to be employed. The demand for Bucks tickets will for sure go up which could also help the economy. People will want to see the new logo with the nice, new stadium! Nice job Madeline
ReplyDeleteThis is a very interesting topic to read about! I do not see why $500 million dollars needs to be spent top build a new arena. I think that fans and the team that want this arena should pay for it themselves. The owners of the bucks team should also be contributing the majority of the money necessary. I think that moving the arena will hurt the economy more that helping it. Although a new arena may draw in more spectators for the games, it will not be beneficial enough to make this project worth the large amount of money necessary. Thank you for sharing!!
ReplyDeleteI'm a huge fan of basketball but I honestly don't even like the bucks. In recent years we can tell they have been struggling to keep up with the competition so why should they get a new arena? Yes, most of it is payed for but I'm sure tax payer wouldn't agree to their money paying for an arena that they will probably never go to. I feel like constructing this new arena will hurt the economy instead of benefiting it. In my opinion this project should be stopped because it is way too much money for a team that doesn't bring home championships. Nice information though! It was a nice post!
ReplyDeleteIf this is going to consist of over $500 million dollars, perhaps taxes should only be sent to the population of the city of Milwaukee. Some people that don't even live near Milwaukee would be suffering the marginal cost more than the benefit of the new stadium. Yes as one of these tradeoffs requires more jobs to build the arena, someone is going to need to pay the workers. Also if it is replacing the Bradley Center, then the Milwaukee Admirals should contribute to this stadium as well. Otherwise they are just free riders.
ReplyDeleteI enjoy the topic that you picked! Personally, I don't think this money needs to be spent on a new arena. Yes, it looks pretty amazing but it's not necessary. From going to Bucks games in the past, I noticed that there's not a great amount of people who attend them. The Bucks don't have the best record so many people don't want to go to the games to watch them lose. I'm sure though, in the first year of its opening, it will attract a lot of people. After that it will just be another stadium. As you mentioned, I agree that this new structure will hurt the economy rather than helping it. Overall, great argument!
ReplyDeleteOverall, this was a great topic to choose to write about and I enjoyed reading your post! Once I heard about the news of developing a new arena in downtown Milwaukee for the Bucks, I thought it was awesome and that I would love to see it myself once it's finished! I remember reading that Bradley Center is one of the oldest arenas across the United States, so I believe the new one is much needed. And I actually disagree when you say that building a new arena won't help economic growth. I think it most definitely will help the economy because there can't be a surplus of businesses, the more businesses, like restaurants and hotels, the more competition. The competition will help businesses thrive and consumers will have a lot of variety to choose from. I think the new arena will bring Wisconsin residents and residents from many other states into town, which also helps the economy. So I believe that building a new arena will help the quality of life in downtown Milwaukee as well as help the team out, like you stated, but it will also impact economic growth in a positive way. I would also be interested in knowing if other events like concerts and shows will be held in that same arena too. If that is true, that would help the economy prosper as well.
ReplyDeleteThis was a great topic of discussion, especially with all the talk about the new arena. I agree with Emma that I don't see why there needs to be this much money going into building a new arena. As you mentioned in the article, I think it's a good concept that the bucks current and past owners are assisting in getting this project under way because it should not come from citizens taxes when some could care less about this new arena. Although, for those who dislike basketball they need to take into consideration that the new facility will most likely be used for events such as concerts or possibly meeting as well. It won't all be about the Bucks and basketball. Furthermore I do agree with you that near by businesses might lose revenue due to new restaurants and business that will be out into the new arena although over time I believe this project will benefit Milwaukee, Wisconsin, and the people.
ReplyDeleteIt is interesting how this decision is made largely by those in ownership positions and government positions, but it affects the public in multiple ways. I feel that the negative externalities mentioned are debatable. This investment would most likely bring more customers into the area and have more positive effects on the economy than negative.
ReplyDelete$500 million dollars is quite drastic and I think that is way too much. Moving it could be a good idea, or it could be a very bad idea. It could be a good idea because maybe it would make room for a bigger parking lot for more cars. But it could be a bad idea because the location could be farther for some people and they wont be willing to make the trip.
ReplyDeleteMilwaukee doesn't need a $500 million dollar arena. The Portland Trail Blazers have the 3rd best stadium in the NBA according ranks given by Bleacher Report writer Jesse Dorsey. In July of 1993 the Moda center cost $262 million dollars to build which equal $406 million dollars today. The Bucks are trying to over do this stadium and build more than we need this stadium would be a mistake AT THIS SIZE AND COST. I would love to see the Bucks get a new and quality stadium but we don't need the best Stadium in the entire league or one of the best like we would be paying for.
ReplyDeleteThis an extremely relevant topic especially now with the release of the Bucks new logos because if the new owners drag their feet on building the new stadium into 2017, they have no contractual obligation to keep the team in Wisconsin, so it is entirely possible that the delays that we are experiencing are a direct result of the owners attempting to move the Bucks out of Milwaukee. That being said, due to the new logos (which include one featuring the state of Wisconsin) the likelihood of keeping the Bucks at home is rising.
ReplyDeleteThis is quite the interesting viewpoint. I would agree that the income made by the new arena would take away some revenue for other businesses around the arena like movie theaters and such that you stated in the article, but I don't believe that it would be a trade-off where economic benefits would not ensue. Although we do have a limited amount of disposable income, maybe the Bucks game offsets the amount of money we would spend at a movie, but we must also factor in costs of food, surrounding businesses who supply bars and sports shops where fans will flock to with more people at the game. This is not even mentioning the amount of revenue that will increase inside the stadium shops that will be caused by an increase in the inflow of patrons to see the Milwaukee Bucks. While I do believe the economic benefit may be slightly overlooked at time, there's no doubt that there will be economic benefit in the construction of this new stadium and an increase in the spirit of Bucks fans across the state.
ReplyDeleteI feel 500$ million is quite a lot of cash to put on the shoulders of taxpayers when many of them are opposed to the stadium. But I also feel that the previous statement is cookie-cutter and could be applied to any government project. The publicity of this stadium will certainly increase the attention paid to the Bucks Brand, increasing club revenue, as well as this, restaurants in the area will receive economic boon. All in all, I think the costs are greater than the benefits.
ReplyDeleteI like how the video you linked connected to the article. I think it is crazy that the cost of a new arena will be about $500 million, this is why I believe that some people disagree to build the new arena. People are going to have to pay taxes to help pay for the new arena, and I think that non-basketball fans won't want to pay taxes for that. I like how you said that, even with Scott Walker’s proposed “jox tax” that appears to lessen the trade-offs involved in constructing the arena, there are surprisingly many negative externalities that will likely evolve.
ReplyDeleteI really like how you related this article to the economy. I think most people are quick to think that even with the arena's massive cost, it will greatly improve the economy in the end. What will happen to surrounding restaurants and places of entertainment? Will there may be some external publicity, the majority of America is not going to convert to Bucks fans for the purpose of the arena. In the end, how much would this really be helping the Bucks, and our community as a whole?
ReplyDeleteIts about time they get a new building. I like the idea that is will also be used as a entertainment building. I don't care for basketball so the idea that we are paying for it is a bummer. I do not really follow the proposal Scott Walker is coming up with.
ReplyDeleteIn your post, you had done well in correctly including terms from our class. I always find it interesting when teams want to build a new arena/stadium, and then turn to the tax-payers for funding. Scott Walker's idea addresses my point, but $30 million is a lot of money. In my opinion, the players/teams/etc. should pay for the construction of their arenas/stadiums.
ReplyDeleteI believe that the decision to spend money on a new bucks stadium is definitely worth it. Some arguments that the stadium will distract from businesses surrounding the stadium is, in my opinion, false. The new stadium will only attract new customers and crowds around the restaurants and stores surrounding the stadium. As a basketball fan, I can guarantee that fans will dine before the game. Creating a bigger newer stadium will attract more business.
ReplyDeleteIt's crazy to think that $500 million is needed to build a new arena and I personally believe that this new stadium is unnecessary. Many don't want an increase in taxes and as you mentioned above it can hurt other businesses and companies. I think this is an expense that is not needed and will ultimately hurt the economy.
ReplyDeleteYou did a great job for arguing both sides. I personally feel that the new arena is worth it because otherwise we would most likely end up losing the bucks team. Their will be positive externalities by having a bigger and new arena it may attract bigger names in music. A big negative externality though I am curious about is parking and traffic because currently it is awful. I also feel the surrounding businesses may initially take a hit but then even out. I know when we head down to games we like to eat somewhere close by to have good wholesome food instead of concession food. Their seems to be a lot of what if's surrounding the idea of a new stadium.
ReplyDeleteMadeline, I hadn’t heard much previous information on this topic in a while and your article did a great job filling me in! I had no idea that this stadium would cost $500 million to build. I believe that most of this money should come from the owners, and not from the people by raising taxes. I also believe that by building this stadium, businesses around the area will be more popular because many more people will travel to the Milwaukee area to see the new stadium. Great article!
ReplyDeleteThe Milwaukee bucks are a historic franchise and it would be extremely saddening to see them go. I am glad that so much effort is being put into the creation of the new stadium. I am surprised that the city of Milwaukee isn’t chipping in for the new stadium. It would benefit the city’s economy the most so to me this is surprising. Also the way that governor walker set up the “pay their way” plan to me is genius. The Milwaukee bucks will have to pay the 220 million dollars back to the state. With the creation of the new stadium this would be easy since it would bring in more fans, advertisement, and hopefully a better team.
ReplyDeleteThis is a big decision to make, and a big decision who has to pay for it. My question is why do the people that live around Milwaukee have to suffer from the increase in taxes. When they for one don’t like basketball or will not receive the benefits of the new arena. If the Bucks what a new arena they should be the ones paying for it the only ones paying for it.
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