By JIM SCHUH
of The Gazette
If the Green Bay Packers want to increase their revenue generating capacity, they had no choice but to renovate Lambeau Field.
And Kevin Bahr, assistant business administration professor at the University of Wisconsin-Stevens Point, says if the Milwaukee Brewers are ever going to compete on a financially level playing field with teams like the New York Yankees, revenue sharing in baseball will be necessary.
Bahr studied professional sports team finances to come up with his conclusions. He presented his report on "The Business of Sports and Small Market Viability: The Green Bay Packers and the Milwaukee Brewers" at a recent Central Wisconsin Economic Research Bureau breakfast.
In discussing the Packers, Bahr says although the National Football League shares a significant part of its revenue, teams are generating a growing percentage of their income from nonshared sources - primarily from stadium-generated revenue. He says that from 1994 to 2003, estimates are that nonshared stadium-related revenue will grow from 12 percent to 22 percent of total revenues.
As recently as 1997, Bahr says, the Packers ranked ninth in NFL team revenues, but dropped to 16th two years later. He says projections show Green Bay falling to 25th by 2003 if the team didn't renovate Lambeau Field.
Bahr says the Packers think the improvements to Lambeau Field will help generate an additional $20 million in yearly revenue, and put them back in the top half of the NFL in annual income. He adds the stadium improvements, along with revenue sharing and the salary cap should allow the team to compete "on a relatively level playing field."
As for the Brewers, the new Miller Park will increase the team's ability to compete on a short-term basis, but Bahr says the Brewers will need more than a new stadium to compete in the long run.
"Baseball's current system of revenue sharing to solve the competitive imbalance problem is like putting a Band-Aid on a hemorrhage," Bahr says. And the Brewers are anticipating an additional $30 million in additional annual revenue because of Miller Park. But revenue sharing payments will stop as the team moves out of the bracket of clubs entitled to such payments under the current system, and that could cost the club up to $10 million a year.
Bahr also points out that the Brewers committed $90 million dollars to help pay for Miller Park, and debt service payments will eat up part of the increased revenues. In addition, their TV and radio contract nets them only about $5 million a season.
So Bahr says that for the Brewers to compete effectively, they'll need significant - not token - revenue sharing. In his words, "Miller Park will help the Brewers' ability to compete, but it won't solve the disparity problem."