Gannon Huebner
I am pretty sure that I am not the only one who is sick of reading blogs week after week about the effects of the coronavirus so I decided to switch it up and go for a topic that is a little more light hearted but still touches on our last units of economics. And that is the economics surrounding the Milwaukee Bucks. The Milwaukee Bucks over the last few years have become not only one of the most dominant teams in the NBA but have also started to grow into a money magnet for the city of Milwaukee. The Bucks organization has never been this lucrative in all its years in the NBA and it’s all because of the decisions and moves they have made to get where they are today.
The Bucks have made crucial decisions during the last decade in order to make their team the way that they are today. They had to look at all different opportunity costs and marginal benefits while making these moves, and they clearly chose right in almost every move they have made. The first decision they had to make was who they were going to draft with the 15th pick in the 2013 NBA Draft, they could have taken a lot of different people but instead they drafted a lengthy teenager from Greece named Giannis Antetokounmpo. Now at the time it may not have seemed like the best pick, but nowadays, he has been the best player by far from that draft class and it isn’t even close. Giannis is the main reason why this team has transformed over the years and a big part of why the Bucks are pulling in money left in right, known as the Giannis effect(which will be talked about shortly). Also, the Bucks made a very crucial trade in 2013 as well (nba.com). The Bucks traded their star at the time in Brandon Jennings for Brandon Knight, who was the centerpiece of the trade, Khris Middleton and Viacheslav Krasvtsov. At the time Khris Middleton was a nobody, and now he is an all star and part of one of the best 1-2 punches in the league. The opportunity cost of that trade was a very big one having to let go of Brandon Jennings, but the outcome or benefit of the trade was much much higher.
The Giannis effect probably took place during the 2015-16 season, after he started to play well and make a name for himself. The Bucks last year built their new arena, the Fiserv Forum. This was a huge money move for the Bucks as it drove in more and more crowds who wanted to see the new stadium and the best team in the NBA. My mom works with an ad agency who works with Fox Sports and there are rumors of All Star weekend being held in Milwaukee in a couple years, which would bring a boat load of money and attention to Milwaukee. According to slam.com, from 2016 to 2019, the average ticket price for Bucks games has gone up from 89 dollars to 153 dollars. The Bucks made 79 million more dollars in revenue this past season compared to the prior season. Peter Feigin and the Bucks organization has used the face of the franchise in Giannis to market and create a brand for their team which has allowed Milwaukee basketball to get back on the map, after a very rough decade prior to Giannis and Khris coming. With the season being cancelled due to coronavirus, there is no way of knowing how much money the Bucks would have made during the playoffs with ticket sales and marketing. If you know Bucks playoff basketball, you know how packed the games are and how much energy there is. The demand for tickets is very high, which causes the prices to rise exponentially when the playoffs roll around. The Bucks used to not be able to fill the arena at the Bradley Center, now every home game is packed, even on Mondays, which is great for the organization.
As long as the Bucks hang onto Giannis for as many years as possible, their numbers will continue to go up and eventually when they win their first championship, they will have one of the best markets in the NBA. The Bucks have an economic growth like no other, and it will only keep rising.
Works Cited
Frank, Peter. “Bucks Would Contribute to Milwaukee's Economic Vitality.” Press Gazette Media,
Wisconsin, 14 June 2015,
www.greenbaypressgazette.com/story/opinion/2015/06/14/bucks-contribute-milwaukees-
economic-vitality/71177354/.
Kirchen, Rich. “Milwaukee Bucks Value Climbs over $1.35 Billion.” Bizjournals.com, 2020,
www.bizjournals.com/milwaukee/news/2019/02/06/milwaukee-bucks-value-climbs-to-1-3
5-billion.html.
Lawrence, Jesse. “Bucks Ticket Prices Up 9 Percent on Secondary Market .” SLAM, 15 Oct.
2018, www.slamonline.com/nba/bucks-ticket-prices-up-9-percent-secondary-market/.
“Milwaukee Bucks on the Forbes NBA Team Valuations List.” Forbes, Forbes Magazine, 2020,
www.forbes.com/teams/milwaukee-bucks/.
Mstanton. “Bucks Acquire Knight, Middleton and Kravtsov from Pistons.” Milwaukee Bucks,
NBA.com/Bucks, 31 July 2013,
www.nba.com/bucks/release/bucks-acquire-knight-middleton-and-kravtsov-pistons.
I would say that the opportunity cost that the bucks put on the line was huge for them because it could have gone really bad or really good, but this is what economist have to use and think about everyday to boost their profits. Sometimes the opportunity may seem like a long shot but the long shot can be a absolute win and can boost profit margins.
ReplyDeleteI don't typically look into sports, so I had no idea of the different financial decisions a single team can make, and this laid all of it out for me. I understood the idea that the Bucks were important to the state, but it's astounding how much money they're making with each game. What I don't know, however, is how volatile trading players is. You mention they "drafted" Giannis, which was an incredible decision, but do teams have a chance of losing players in future drafts? Will the Bucks ever decline in popularity from what they have now?
ReplyDeleteIn a way, the bucks run their own little economy in and around the Fiserv Forum. Like you said, since the new development of the stadium not only have the Bucks benefited significantly, but businesses and districts around the stadium have seen an increase in visitation and revenue. Not to mention our recent success with Giannis as the staple for the Bucks; he has brought in a lot of money for the organization itself.
ReplyDeleteI think it's a great idea that you decided to write about something apart from Coronavirus. This was a new topic I don't hear about a lot, but I was able to learn from your article. I knew that it costs a lot of money to build a new stadium, especially one as big as the Fiserv Forum, but it's interesting how it paid off with all the new money being brought into Milwaukee with Bucks games and extra attention brought upon them by new players.
ReplyDeleteI like that you decided to write about something other than the coronavirus. This topic was super interesting because lots of people don't understand how much sports teams have to deal with economics. Lots of people don't fully understand how the decisions made by a professional sports team can affect the businesses near the stadiums and the city as a whole. It was also interesting to learn about the Giannis effect and how much he has affected the game and the revenue that is brought in by him.
ReplyDeleteI feel like this was more intriguing then most of the other ones because it was actually something other than corona. But yes i agree the cucks have amde some very crucial moves to get where they are today
ReplyDeleteThis is an interesting piece. It would be interesting to know if this is maintainable once Giannis is gone. In other words does the Giannis effect have an inverse or is it a one way type of thing. I do agree though that having All-Star weekend in Milwaukee would do great things for the city.
ReplyDeleteNice job, it's cool to hear about something other than the virus or the stay at home crap. A lot of people think that sports is just sports, but in the end economically it means a lot. Especially for those that hold stocks within certain teams like the Bucks or the Packers. Cool topic.
ReplyDeleteI'm very glad to see some variety, I've heard enough about corona. It is interesting to see how much the prices have increased since 2011. The price increase makes sense too. As the team improves, more people are willing to spend more money to see their games. The new arena also contributes to the price increase because the upkeep price for the building has likely increased. I'm not super into sports so it is interesting to see how athletes also follow similar rules to the rest of the free market; sports teams are paid more if they perform better.
ReplyDeleteI like the Bucks, but I’m not a die-hard fan or anything- I do try to catch the game on TV if I’m not too busy. Reading this article was really cool because I got to see why and how the Bucks have gotten more and more popular over the years and how it’s affected their income. I inferred that a large amount of the Bucks’ economic success was due to the addition of new players like Giannis and Middleton, but I really didn’t think about how much the Fiserv Forum affected it. It has made me wonder about how other events that occur in Fiserv Forum (such as concerts and conventions) affect the Bucks’ income. Another thing that has crossed my mind is how the ticket sales would be affected if Giannis or another star player would be injured? Would the sales go down, or stay the same? Would the prices rise or drop? I’m excited for when the NBA season opens back up!
ReplyDeleteThis was a very interesting topic and was definitely a good variety from all of the blogs around corona. This was also interesting because I knew that Giannis was a huge player for the Bucks, but I didn't know how much money that they were actually making off of him and how successful the team as a whole was becoming. Also the Bucks making more money means that it is alos bringing in more money for the city of Milwaukee which will help our local economy as well.
ReplyDeleteI'm not really familiar with the basketball scene or any of the players mentioned in the piece but it was still an interesting read. It is fascinating how we can see economics come into play even in situations like trading a player when it isn't the first thing on most people's minds. You did a good job of conveying the importance of the Giannis effect, especially since I didn't know who Giannis was before reading this.
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ReplyDeleteI'm not too into sports anymore, but I know who Giannis is. I never realized how an individual person can have an economic effect on a team. I wonder what the teams income would look like if Giannis left? I did really like this topic however it was something new to read.
ReplyDeleteThis is a very interesting topic, compared to many talking about the pandemic around the world. It is very interesting as well how big of an economic impact one player can make on an organization or how trading players can either increase of decrease the economic impact of that organization.
ReplyDeleteThis was a great explanation of the economic value of a single person can have. This really shows how sports are not just a game but a business. This example can apply to other players around the league like lebron and steph curry. This also shows how players can change a team into a big market team as it can lead to more spending cash for a team
ReplyDeleteI like many others are not familiar on the topic of basketball but I do find it very interesting how the milwaukee bucks has a factor in the the local economy and how the money cycles from locals to be navigated in the bucks. but I wonder if the city would be as prevailing without the bucks? or would there be another rising factor?
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