Leaked Loan Application Sheds Some Light On Brewers' Pre-Miller Park Financial Woes

Tuesday morning I received an email from an anonymous source with a relatively interesting attachment: A loan application the Brewers submitted in 2001 as they prepared for their first season in Miller Park. The document is 18 pages long and contains some details I hadn't seen before about the Brewers' financial situation at the time, their expectations for Miller Park and some of the deals agreed to as the new stadium was being constructed.

Before I go into any of the details, let me make it perfectly clear that I am neither a financial expert nor an accountant. There are a handful of cases where the data I found interesting is based on my interpretation of numbers, and it's possible that my understanding of how they work is inaccurate. 

With that said, here are some of the points I took away from the document:

The team's pre-Miller Park financial woes were every bit as bad as publicly stated. Financial data accompanying the application dates back to 1997 and shows the Brewers operating at a loss each season from 1997-99, bottoming out at a net income of -$22.345 million in 1999. The team barely finished in the black in 2000 (earning $2.136 million), but only because of a $20.5 million insurance payout following the Miller Park crane accident.

In addition, the team had to borrow nearly all of its $120 million contribution to Miller Park. At the time of this application, the team had maxed out its $75 million credit line with Major League Baseball.

The organization overestimated the impact of Miller Park. The application says the Brewers expected to draw 3 million fans to Miller Park in its inaugural season in 2001, then expected 3 million again in 2002 and 2.9 million in 2003. They based those estimates on attendance increases in Baltimore, Cleveland, Chicago, Texas, Seattle, San Francisco and Detroit when their new ballparks opened.

Reality came nowhere close to those marks, as the team drew just 2.8, 2.0 and 1.7 million fans over the new park's first three seasons, falling short of expectations by around 2.4 million or about 27%. This probably explains some of the drastic cost-cutting that followed those seasons. 

The team entered into some long term agreements when Miller Park opened. You probably know that the Brewers signed a 20-year, $40 million agreement with Miller to be the ballpark's title sponsor. But you might not know (I didn't know, at least) that the team also signed a 20-year agreement with Sportservice to provide concessions at the park. The team makes $2.3 million per season off that deal, plus a percentage of gross sales. That percentage's estimated value was $11 million in 2001.

So, all told, the team is taking in somewhere in the neighborhood of $15-20 million annually from Miller and Sportservice for the park's naming rights and concessions, and those numbers should remain somewhat similar through the 2020 season, when both deals expire.

I offered the Brewers an opportunity to comment on these documents, but they declined. 

Thanks to our anonymous source for making these documents available to us. If you have access to any (Brewer relevant) documents you're able to share without creating the risk that we'll both end up in prison, my contact link is at the bottom of this page.