Milwaukee’s new NBA arena will open later this summer, and will host Bucks home games starting with opening night in October. Last week the Bucks and banking software company Fiserv announced a 25-year agreement to name the new arena Fiserv Forum, but this otherwise standard piece of stadium business has an especially galling backstory: an arena built with $250 million in public money will be named after a company set to absorb $12.5 million in public subsidies in a deal meant to prevent it from relocating its headquarters outside of Wisconsin.
“It makes the Legislature look foolish,” said Sen. Jon Erpenbach (D-Middleton), who voted against the deal. “It makes the governor look foolish.”
People don’t understand why a company would need taxpayer subsidies for its headquarters when it has funds available to buy naming rights, Erpenbach said.
“Maybe the state can sell naming rights on that new (Fiserv) headquarters and get some of the money back,” Erpenbach said.
As pointed out by Wisconsin state senator Chris Larson in this Milwaukee Journal Sentinel report, this means that Wisconsin taxpayers will be footing a portion of the bill to put a private company’s name on an arena built largely with taxpayer dollars.
Word apparently reached the Wisconsin Economic Development Corp back in August 2017 that Fiserv was being “heavily recruited by another state for relocation”—no doubt with a package centered around tax benefits and subsidies—and the Wisconsin legislature fell all over itself to make a competitive offer to keep the company from taking its 900 jobs elsewhere. The deal—and the symmetry of this is too perfect—would put Wisconsin taxpayers on the hook for a portion of the construction costs of Fiserv’s new headquarters.
Not that Fiserv, which reportedly made $1.2 billion in profits from $5.7 billion in revenue in 2017, needs the public money at all, whether from Wisconsin or Georgia or anywhere else—the naming rights to the new arena are reportedly a drop in the bucket:
Financial terms of the naming rights agreement weren’t disclosed, but one Wall Street analyst who covers Fiserv and the financial technology industry, David Koning of Robert W. Baird & Co., said cost shouldn’t be an issue for Fiserv.
[...]
“They execute so well that it’s very likely a pretty small expense relative to how well they’ve been doing,” said Koning.
$12.5 million obviously wouldn’t cover more than a year or two of the 25-year naming deal for the new arena, but there’s something undeniably scummy about a basketball franchise that squeezed the state for hundreds of millions of dollars for a building selling naming rights for that building to a banking business that pulled the same scam. Billionaires and corporate shareholders growing fatter on the tax dollars of the public their businesses are meant to benefit. Yuck.
H/t Brian
