Bucks owners threatened to sue Democrats, host ‘competing event’ when rent was late
The Milwaukee Bucks billionaires recently played hardball with top Democrats over unpaid rent for the upcoming Democratic National Convention.
And nobody walked away happy. In late May, struggling to raise money amid the global pandemic, the Milwaukee 2020 Host Committee failed to make a $1 million installment payment under its $7 million contract to use Fiserv Forum to host the convention.
Bucks President Peter Feigin responded by threatening to declare the Democrats in default and take them to court over the delinquent payment. That’s not all.
During the acrimonious talks in early June, Democrats sought to have the contract amended and their total payment reduced. But Feigin asserted the Host Committee had to pay the full amount of the contract whether the convention was held at Fiserv or not.
Feigin also suggested Bucks owners might pull $3 million in donations to the convention. He even declined to rule out the possibility of hosting an unspecified “competing event” at Fiserv if Dems didn’t end up using the facility.
On June 2, President Donald Trump announced he was moving the Republican National Convention out of Charlotte, North Carolina, over concerns he might not have a full house there because of COVID-19 restrictions. Republicans were then looking for an alternative site for Trump to accept the nomination.
Using a GOP event as leverage in negotiations? That sounds like the billionaires were taking a page from Trump’s “Art of the Deal.”
“That’s brazen,” said veteran Milwaukee Ald. Robert Bauman, who represents downtown Milwaukee. “But this is what billionaires do. They negotiate tough contracts, and they give no quarter.”
In the end, the Democrats paid a total of $5.5 million to the Milwaukee Bucks for the rights to a building they
will not be using, sources confirmed.
This comes at a time when the Host Committee still needs to raise at least $15 million to put on the mostly virtual event at which former Vice President Joe Biden will accept the Democratic nomination on Aug. 1720.
Neither top Democratic nor Bucks officials would discuss the negotiations between the two sides during the first week of June. But the Journal Sentinel has talked to knowledgeable sources and reviewed key records related to the deal.
Last week, organizers announced they were downscaling the Democratic convention, telling state delegations not to travel to Milwaukee, adding satellite events around the country and moving the event from Fiserv Forum to the nearby Wisconsin Center.
Delegates will cast votes remotely, even for the presidential nomination in what is shaping up to be an increasingly virtual event.
The $500 million Fiserv Forum, which opened in 2018 and was funded with a mix of public and private dollars, had been a major selling point in Milwaukee’s being named the home of the 2020 convention.
Originally, it was projected that some 50,000 people would come to Milwaukee to attend the largest convention in city history.
But all of that was upended with the rapid spread of the coronavirus. In the last two months, top Democrats have openly speculated about possible changes in the convention, including whether one would be held at all.
For the Host Committee, concerns about the future of the convention resulted in a sharp decrease in donors. As of March, the committee had collected about $30 million of a total $70 million it needed to put on a convention as had been originally planned.
Under the original deal, sources say, the Democrats were to pay $7 million, plus expenses, to the Deer District LLC, the arena management firm controlled by the Bucks owners, for use of Fiserv.
The Host Committee’s money problems became apparent when it failed to make a regular installment payment of $1 million in late May, sources said. By June 1, the committee had paid a total of $4 million of the Fiserv bill.
Feigin, the Bucks president, threatened to send a default notice but told Rod O’Connor, the Democrats’ negotiator, that he was open to amending the original contract. Feigin gave the Democrats until June 5 to come up with the $1 million payment.
The Journal Sentinel did not see a copy of the contract amendment proposed by Democrats, but O’Connor said his side would make no more payments until there was a new deal approved by both sides, sources say.
Feigin rejected the proposed amendment, saying the Democrats were in breach of the contract and that he was considering litigation, according to sources. He again stated that O’Connor had until June 5 to make the payments. He insisted that the full amount remained $7 million.
“In the history of conventions, I don’t think this is all that unusual,” said a source close to the Bucks of the tough talk.
What was unusual, however, were two sticking points in the proposed agreement.
O’Connor and the Democrats wanted assurance that the Bucks owners — Marc Lasry, Wes Edens and Jamie Dinan — wouldn’t ask for a full refund for the $3 million they had already given the Host Committee. Lasry, in particular, is a Democratic megadonor who was once under consideration to be the U.S. ambassador to France.
Also, the Democrats wanted in writing that Fiserv wouldn’t be used for a “conflicting or competing event” around the time of the Democratic convention if it was moved elsewhere. Feigin balked at both. Feigin said the entire $3 million in donations would be at risk if the Democrats didn’t pay the $1 million by June 5. As for the arena, Feigin said Fiserv would be open for anyone if the Democrats opted out of using the arena.
The only real competing event at that time was the Republican National Convention. Trump had announced in early June that he was moving the
GOP event out of Charlotte but hadn’t decided on where to go. The Republicans eventually settled on relocating most of their convention to Jacksonville, Florida.
But after talking with Lasry, Feigin did soften on one point. He said the owners would take $5 million, plus expenses, if the Democrats did not use Fiserv and $7 million if they did.
Shortly thereafter, the Host Committee wrote a check for $1.5 million, bringing its total payment to $5.5 million to the Deer District.
A source close to the Democrats said the Host Committee paid that figure because it feared it would lose up to $10 million — $7 million on the contract and $3 million in donations from Bucks owners — if the matter went to court.
Originally, the Democrats had hoped the Bucks owners would refund all of their payments. When it was clear that was not going to happen, the Democrats sought a discount.
“We asked if they would just keep the $4 million we had already paid and call it even,” the Democratic source said. “This would have returned all of the owner contributions ($3 million) and given them a nice $1 million profit for doing nothing. That wasn’t acceptable to them.”
Bauman, the Milwaukee alderman, said the Democrats may have themselves to blame for the bad deal, in the end.
“They waited too long to pull the plug,” he said. He said it’s still possible the stripped-down version scheduled for August might not occur.
Of course, Bauman said the Bucks owners could have given the Democrats a break. Discounts are being given by lots of organizations and landlords, he said, because of the pandemic.
But Bauman said it’s clear that the Bucks were tough negotiators.
“Arguably, what spooked the Democrats was talk of another political convention,” Bauman said. “That’s kind of playing dirty.”
The Bucks weren’t very happy with some of the Democrats’ negotiating ploys either.
The source close to the team said the O’Connor never specifically said moving the convention was on the table.
Beyond that, the Bucks owners learned that the Democratic convention would be hosted by Wisconsin Center, not Fiserv, just hours before the move was made public on June 24.
“That’s absolutely, 100% correct,” the Bucks source said.
Still, the Bucks owners get to walk away with $5.5 million.
Perhaps now they can begin paying their own rent.
On June 5 — the same day Feigin was demanding payment from the Democrats — the Deer District exercised its right to stop paying monthly installments to the Wisconsin Center on its $1 million annual rent to use Fiserv. The Deer District is controlled by the Bucks’ owners.