Last week, Forbes magazine came out with its annual estimate of profits for Major League Baseball teams. The analysis ranked the small-market Milwaukee Brewers as the seventh most profitable team in baseball, with an estimated $22.4 million in operating income in 2005. This is a remarkable showing, yet not as good as the team did in 2004. For that year, Forbes ranked the Brewers as fourth most profitable, with an operating income of $24.2 million.
The Journal Sentinel has yet to report the Forbes analysis. The Business Journal had it on its Web site on April 21.
Baseball Commissioner Bud Selig and other pro sports leaders typically pooh-pooh these rankings, noting that Forbes doesn’t have access to a team’s internal finances. But pro sports teams have repeatedly been proven to provide misleading statistics, leaving Forbes as the best source available.
Brewers owner Mark Attanasio has said his profit for 2005 was about $4.5 million. That’s much lower than the Forbes estimate, but the magazine does not take into account taxes, depreciation and interest payments. A newly purchased franchise like the Brewers can claim millions in phantom depreciation on ballplayers, a tax break not allowed to any other industry. As for interest payments, that reflects borrowed money, not money an owner actually put up to buy a team.
The long and short of it is the Brewers are doing very well. Though the team ranks 26th of 30 franchises in total revenue, its profit is high because its expenses are low. That would reflect two factors: a very favorable stadium deal, with the public paying for more of the costs than most cities, and a player payroll that is one of the lowest in the league. This raises an obvious question: Given how generous the taxpayers have been, why is the Brewers payroll so low?
As I noted in a column in the April issue of Milwaukee Magazine, seven of eight teams that went to the playoffs last year spent anywhere from $75 million to $208 million. The exception, San Diego, played in a terrible division and finished just two games over .500 yet still spent $63 million. The Brewers’ payroll has risen under Attanasio but remains at just $52 million.
Still, the Brewers have become a more exciting team, and no one is demanding that the team raise its payroll. The honeymoon with Attanasio is still on, not just for fans, but for the media. Maybe that’s why the Forbes analysis didn’t get any ink in Milwaukee.
Jim Sensenbrenner Gets Off Easy
Sunday’s Journal Sentinel did a story on travel junkets by members of Wisconsin members of the House of Representatives. Reporter Katherine Skiba made Democrat David Obey the poster boy for such junkets, leading with a description of a six-day trip he took to Jamaica for a conference on education reform sponsored and paid for by the Aspen Institute Congressional Program.
The choice of Obey made no sense, since he ranked fifth of seven House members from Wisconsin in travel bills. Obey took two trips with a value of just under $7,000, far below Republican F. James Sensenbrenner (four trips worth $36,192), Republican Paul Ryan (five trips worth more than $25,000), Democrat Tammy Baldwin ( two trips worth nearly $19,000) and Democrat Ron Kind (five trips worth just over $7,000).
Given how high Republicans Sensenbrenner and Ryan ranked, they surely should have been used as the lead. The obvious choice is Sensenbrenner, given his long-term track record on this issue. As a story by Erik Gunn in the April issue of Milwaukee Magazine noted, Sensenbrenner ran up a travel bill of $180,000 since 2004 that was paid by outside groups, while taxpayers have financed some $139,000 in travel junkets for the congressman since 1994.
It’s also worth noting that Sensenbrenner is a millionaire who can afford to pay for his own travel. All of which makes him the obvious and most dramatic lead for the story. So why did this “liberal” newspaper choose not to go after a Republican? Someone should alert talk radio.
Milwaukee vs. Waukesha Revisited
In February, Journal Sentinel reporter John Schmid did a front-page, top-of-the-fold story predicting that Waukesha County would pass Milwaukee County in total property value by 2014. As I noted in my column then, Schmid’s “hot” story was based on a Public Policy Forum report that was nearly a year old. Worse, it was contradicted by an earlier PPF study (in 2003) predicting that Waukesha would overtake Milwaukee by 2007. Which one was right?
That’s a moot point now, for the prediction has changed again, as Schmid reported last week, this time with a timely story on the latest PPF report. The April 2006 study noted the big year the City of Milwaukee had in increased property values and thus moved the date back for Waukesha passing Milwaukee to either 2015 or 2033, depending on whether you used the last 12 or five years of data on property tax values to make the projection. In short, in just three years, the PPF has offered dates ranging from 2007 to 2033 for when this momentous day will arrive.
At what point does the PPF or at least Schmid and his editors come to the conclusion that this entire prediction process is meaningless? Some developers predict that the city renaissance is likely to continue for another 15 years. And as more and more new and renovated buildings come online, that in turn will fuel ever more retail and other development. All of which would make pre-renaissance data on property values in Milwaukee completely misleading.
Meanwhile, no one knows when Waukesha will run out of water or what the impact of that will be. Not to mention the rising price of gas, which makes ever more distant sprawl ever more expensive. It’s just possible Waukesha County will never pass up Milwaukee County. Isn’t that just as good a prediction as the PPF’s shifting list of dates Schmid continues to swallow?
Short Take
In a city that is short on characters, John Tries was a memorable one. Tries, who died last week, was the classic bipartisan operative who worked in the administrations of both Republican Gov. Tommy Thompson and Democratic Mayor John Norquist. Tries was a former cop who ended up suing the police department. He was a street-smart guy yet often more eloquent than the most professorial policy wonk. He could be slippery behind the scenes or an ethicist on the record. And he was a “suit” who always seemed more comfortable dressed down — way down. For more than two decades, Tries chatted up and influenced a host of politicos and reporters, and he was a damn colorful addition to the dialogue.
