Pro-Baseball Franchise Hit with Unusual State Audit

More than three dozen new professional sports stadiums and arenas opened in the United States in the last decade, many of them built with taxpayer money. Some taxpayers and the people who represent them seem satisfied with the bargain, but others are beginning to ask why some of the teams that benefited have provided so little to cheer about.

Wisconsin’s major league baseball team, the Milwaukee Brewers, is a case in point. After a contentious debate, the state Legislature raised $400 million through a sales surtax in the Milwaukee area to help build the Brewers a new stadium, Miller Park. State Senator George Petak (R), who cast the tie-breaking vote in favor of the tax, paid for his action politically, becoming the only state legislator in Wisconsin history recalled by the voters.

In return for the state assistance, the Brewers and their owner, Bud Selig, promised that the new stadium would improve the team’s on-the-field performance.

“It was an absolutely clear part of the bargain. They said we need this money to take us back to the World Series and be competitive again,” said State Rep. Bob Ziegelbauer (D), who eventually voted against the plan.

But three years after its opening, the promise has not been fulfilled. The Brewers have a combined record of 192 wins and 294 losses, and have remained in the cellar of their division.

Adding insult to injury, during the current off-season, they traded the team’s most popular player, first baseman Richie Sexson, and slashed payroll by 25 percent. The moves led to the resignation of team president Ulice Payne and prompted a public outcry over whether the Brewers were committed to winning.

Under enormous pressure, the Brewers reluctantly agreed in January to a public audit.

The unusual examination of the team’s books will be performed by the Wisconsin Legislative Audit Bureau. “Auditing a sports team is not something you hear about everyday. It’s very rare,” said Kinney Poynter, executive director of the National Association of State Auditors, Comptrollers and Treasurers.

Ziegelbauer, who helped trigger the examination, said it is important for legislators to discover whether the Brewers misled the public when they used taxpayer money for the stadium.

“This situation is all about accountability. There are questions that need to be answered when you are spending millions of dollars of taxpayers’ money,” Ziegelbauer said. “It’s important to see how the Brewers benefited. If you look at what’s happened since they moved into Miller Park, you start to wonder: are they even trying?”

The audit started in late January and will be completed by the end of April. But whether it actually will achieve anything remains to be seen.

For starters, the Brewers and the auditors agreed to several restrictions. Specific salaries and owners’ percentages will not be disclosed, for example. The Brewers also will not release itemized expenses and revenues but instead simply will report broad categories.

Furthermore, even if the auditors uncover fraud, the state will have no recourse against the Brewers. The Legislative Audit Bureau cannot legally penalize the team.

“We have absolutely no authority over a private business,” said Wisconsin State Auditor Janice Mueller.

Ziegelbauer said he still thinks that the Brewers have to be held accountable in some way for their promises and guarantees. “It’s a controlled audit, and they are trying to steer clear of any embarrassment. But they really have a moral and ethical obligation here to answer how they spent this money,” he said.

For their part, the Brewers seem eager to answer all questions. Noting that they voluntarily consented to the audit, the Brewers’ ownership claims that the audit will clear them once and for all.

“We have nothing to hide,” said Bob Quinn, the Brewers’ senior vice-president and chief financial officer. “There is a big difference between lying and trying to do something but failing. Nobody can question the Brewers’ commitment to baseball or their integrity.”

Publicly auditing a sports team also has been talked about in at least one other city with a new taxpayer-funded stadium. The Pittsburgh Pirates built PNC Park with more than $300 million in public money. Pirates owner Kevin McClatchy said the new stadium would improve the team’s finances and the on-the-field product.

But like the Brewers, the Pirates remain one of the worst teams in professional baseball and have slashed payrolls and traded away star players since moving into their new stadium.

Prominent Pittsburgh sports commentator Bob Pompeani has called for an audit, saying that questions surround how McClatchy spent the extra stadium revenue.

“The taxpayers came to the plate, and they deserve to know how revenue that the stadium generated was spent,” Pompeani said. “I just want to see it for myself. For me, the numbers just don’t add up.”

Pirates Vice-President for Communications Patti Paytas said that McClatchy stands by earlier refusals to open up his books for public inspection.

Dr. Mark Rosentraub, author of the book “Major League Losers: The Real Costs of Sports and Who’s Paying for It,” said the lesson from the Brewers and the Pirates is clear: states and cities should beware of what they’re getting into when they agree to finance stadiums.

“In Wisconsin, it was quite clearly a betrayal….It’s a little hard to reconcile what’s happened in the new facility with the remarks they made at the time,” Rosentraub said. “There are a lot of twists when cities and states enter sports. Politicians must be careful about understanding the owners and their claims.”