Last week, Senator Herb Kohl, the owner of the Milwaukee Bucks, announced that it was time to begin planning for a new arena in Milwaukee for the Bucks and that he would be willing to make a personal contribution towards construction of said arena. Since a new arena would have to be multipurpose to assure its financial viability, I think it's safe to say that Senator Kohl and the Bucks would be more than happy to have Marquette games played in this new arena. Whether Marquette would want to play their games in this arena would probably depend on its location, but we're a long way from even having an idea as to where it would go.
But last night, I got a question on the AE Twitter account that actually makes a lot of sense off the bat:
Like I said, this makes sense off the bat. Senator Kohl noted that the business sector and public sector will end up having to step up to help build this arena, so why shouldn't Marquette make a contribution towards the construction if they're going to end up playing games in the building? You make a one time (maybe three or four time to spread the expenditure out a bit) payment, you're part owner, you play for free in the building and you rake in a cut of every event in the building. From there, it's just a matter of how much the contribution has to be.
That's where we run into a little bit of trouble with this idea. Hit the jump and I'll explain.
The following are the five newest arenas in the NBA, the year they opened, and their construction costs, with all data coming from their Wikipedia pages:
- Barclays Center, Brooklyn Nets, 2012, $1 billion
- Amway Center, Orlando Magic, 2010, $480 million
- Time Warner Cable Arena, Charlotte Bobcats, 2005, $260 million
- FedEx Forum, Memphis Grizzlies, 2004, $250 million
- Toyota Center, Houston Rockets, 2003, $202 million
I'd address the cost of the Big East arenas, but it turns out that the Bradley Center is a fresh spring daisy relative to most of those buildings.
It would seem to me that either the Barclays Center cost is escalated by the sheer fact that it's in Brooklyn OR Mikhail Prokhorov is out of his frigging mind and will pay anything to anyone for anything. Either way, we can kind of ignore that price tag. So that leaves us with three arenas built in the last ten years for between $200 million and $260 million and one that cost nearly half a billion. The question that we then have to ask is: What would the price tag for part ownership be for Marquette with arenas in this price range?
Let's say it's a 25% stake in the building. 25% is a clear minority ownership, but enough of a serious contribution to allow for a significant returning revenue stream. If they manage to figure out how to build a new building for $200 million, that 25% stake would be $50 million. $50 million also happens to be the same amount of money that the university needs to finish construction on Engineering Hall. What if they can't keep construction costs that low, but Senator Kohl would require at least 25% ownership for profit sharing? That $50 million price tag starts going up pretty quickly. Marquette basketball already turns a profit by renting space in the Bradley Center, so I don't know if I see a need for the university to have part ownership (and part liability) in a new arena when that money could be much better spent on the university's core mission of education.