Critics decry Fiserv deal with Bucks
Arena rights bought after state OK’d $12.5 million in possible subsidies
Fiserv Inc.’s purchase of naming rights for the Milwaukee Bucks’ new arena comes less than a year after Wisconsin lawmakers agreed to give the company up to $12.5 million if it keeps its headquarters in the state.
That isn’t sitting well with some.
“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.
Fiserv won’t say how much it is paying over 25 years to name the Bucks arena the Fiserv Forum. Bucks executives and owners had said they expected the deal to be worth $7 million to $10 million a year for up to 20 years.
Some conservatives — including a Republican who supported the package when it passed the Legislature in 2017 — acknowledge the new deal with the Bucks will leave taxpayers with questions.
“Well, Fiserv did get a big gift from taxpayers to do what it almost certainly would have done anyway,” said Rick Esenberg, president and founder of the conservative Wisconsin Institute for Law & Liberty. “That doesn’t have much to do with the deal — I assume they’re paying what the naming rights are worth — but it’s hard to defend free market policies when politicians create the impression that the government is playing favorites. We’d all be better off if there were real constraints on the ability of government to make gifts to private parties.”
Sen. Chris Larson (D-Milwaukee)
said having the naming rights go to Fiserv is particularly galling because the Bucks arena is being partially funded with $250 million in public money.
Larson opposed the Fiserv incentive package but voted to provide public financing for the Bucks.
“Taxpayers are going to be paying to put somebody else’s name on the front of this arena that taxpayers paid for,” Larson said.
And a spokesman for Sen. Steve Nass (R-Whitewater) said while the naming rights deal is an unrelated business transaction to the taxpayer-funded incentive package, Nass understands “some taxpayers will reasonably raise questions about the necessity” of the incentive package given the company’s ability to spend millions to affix its logo to the Bucks arena.
“Senator Nass believes both Fiserv and state officials must continue to clearly communicate the strong justifications for the state assistance,” spokesman Mike Mikalsen said.
Fiserv spokeswoman Britt Zarling did not respond to questions about the criticism of the naming rights deal.
The subsidies for the Brookfield-based bank technology firm were included in legislation aimed mainly at providing $4 billion in state and local incentives to lure Foxconn Technology Group of Taiwan to Mount Pleasant.
The Foxconn provisions got most of the attention, but funding was included for Fiserv in hopes of preventing the company from moving its headquarters to another state.
The company is eligible for up to $12.5 million in incentives over five years if it builds its new headquarters in Wisconsin and retains 93% of its jobs. The company and state are in negotiations that would determine the exact terms of the package.
At a Monday stop in Combined Locks, Walker noted Fiserv hasn’t said yet whether it will keep its headquarters in Wisconsin and claim the tax credits.
Walker, who proposed and signed off on the incentive package for Fiserv, didn’t say what he thought of the company buying the naming rights for the Bucks arena.
“They haven’t claimed the credits,” Walker told reporters. “They haven’t even filed paperwork for that. So for them to do that, they would have to hit certain benchmarks, but they haven’t negotiated a contract with the state.”
On Sunday, Sen. Chris Kapenga (R-Delafield) said on WISN-TV’s “UpFront with Mike Gousha” that he tried to remove the Fiserv provision from the Foxconn bill before lawmakers passed it.
“You got Fiserv kind of thrown in there, which I completely disagreed with. I tried to get that pulled out but I couldn’t,” Kapenga said.
Fiserv, which provides technology that runs banks and allows payments of bills and debts online and over mobile phones, had a profit in 2017 of $1.2 billion on revenue of $5.7 billion.
The company is viewed as one of the best firms in its industry. It employs about 900 people in Brookfield and has about 24,000 employees worldwide.
Jeff Yabuki, chief executive officer of Fiserv, last week told the Milwaukee Journal Sentinel he considers the Milwaukee area the company’s “home market,” but a company spokesman also said officials there haven’t yet settled on where to build a new headquarters and left open the possibility of moving out of state.
Robert W. Baird & Co. stock analysts last week determined the cost of the naming rights shouldn’t be much of a financial burden on Fiserv and the exposure for the company would provide value.
Assuming the naming rights cost $5 million to $10 million a year, they would reduce annual earnings at Fiserv by 1 or 2 cents per share, according to David J. Koning, who covers Fiserv and other financial technology firms for Milwaukee-based Baird.
Robert Bamberger, a Baird research analyst who assisted with the review, said sports TV network ESPN charges about $31,500 per 30-second advertisement, or about $1,050 per second.
“If we assume at least one 10-second slow motion Giannis (Antetokounmpo) dunk is shown per night during the NBA season (five months long) on SportsCenter Top 10 highlights with a FISV logo in the background, that would equate to about $2 million of advertising exposure for FISV per year,” the Baird note stated, referring to Fiserv by its ticker symbol.