Milwaukee Talks: Wave owner Mike Zimmerman
There are few people in the local sports scene busier than Mike Zimmerman, the owner and chief executive officer of MKE Sports & Entertainment, which operates not only the Milwaukee Wave, The Rock Sports Complex in Franklin and out-of-state baseball teams Jamestown (New York) Jammers, Rockford (Illinois) Aviators and the Kokomo (Indiana) Jackrabbits.
Oh, he is also part of 3 Beacons, a group that includes Milwaukee bar owners Seth and Jake Dehne.
OnMilwaukee.com managed to pin the Franklin native down to talk about it all in this edition of Milwaukee Talks. Enjoy.
OnMilwaukee.com: The first question has got to be, how do you manage all of this?
Mike Zimmerman: Yeah, to speak frankly, balancing – it's impossible. I can't balance it all. But what I do, what I've learned, is to pivot really hard. So when I go on something, I pivot on it. So I've got to be really thoughtful of where I spend my time, how I spend my time, who I spend it with. I find that if I give it a lot of thought beforehand setting up my dad, then I can go in and pivot on the Jamestown Jammers for two hours and then the Wave for two hours. But when you manage this many things, the balancing, I have great people and they balance it. Personally, can't. But I have fun doing it.
OMC: So how did you get here, with all of this to manage?
MZ: I started (in) health care, got super lucky, built a business, built another business, one of those businesses went public which gave me the means to build a private equity company to, essentially, built more healthcare businesses. So I built seven healthcare companies. Then my wife and I were trying to find a project to give back to the community. Because baseball is my first love I said I'd love to build a baseball field for the kids and maybe an adult field.
So, then I hooked up with Sue Black and we started looking at Crystal Ridge. I wrote this investment thesis, this business plan around it, and then that became The Rock Sports Complex. I was kind of doing that on the side in my free time and I was managing all my healthcare businesses but then this started working really well. I mean, it's not a wealth creator, but what I was seeing was the way it was impacting the community was really excited me in a way that I've never been excited before.
For me, it's always been financially metric driven – are we winning or are we losing? But this was sort of off income statement balance sheets. So, then I read this book called "The ONE Thing" (by Gary Keller) that basically inspired me to do what I really want to do, which is baseball. So I made a decision to start my journey out of healthcare into sports and entertainment. So then I launched MKE Sports & Entertainment about a year ago. It's a holding company fund and my business plan there is to build – owning a team, while it sounds sexy, it's super hard – these are financial losers. But they're like restaurants. If you can get enough of them and build economies of scale around it and shared services, you can actually win at the game. So that's our basic business model.
So, we picked up the Wave. We basically had no intention of ever entering soccer, but with my relationship with Sue I found out they weren't doing well and if I didn't do it, who would? So I jumped in. I figured, you know what, I'll cut my teeth on sports and I've had a lot of fun on that one actually. Then we picked up the Jamestown Jammers, Kokomo Jackrabbits, Rockford Aviators. And I'm trying to get out of healthcare so I can spend more … so I can balance my time on something that I really want to be doing.
OMC: You mentioned that you just started to start with a kids ballpark, and maybe an adult one. How did that grow into The Rock?
MZ: I'm a business builder, and I like to build businesses. I'm always thinking of different businesses and looking at how other industries do things. What that gave to me was a real interesting platform where you could do all sorts of (things). It's got really good topography, an existing ski hill. Baseball fields, you're right, it's kind of an easy one. The Halloween event we do – that's a great example of coming up with a concept that can make a few bucks, the community gets engaged with, and you're using the existing land. And those dollars help sort of pay for everything.
What we were trying to build was a business. The problem with just a ski hill, the problem with just a baseball field, is the seasonal nature of that. How do I keep these people employed? You need a business model that kind of keeps things going around the clock. I still have 40 acres that I don't know what I'm going to do with yet. I wanted to stadium but we all know what happened with that story. But yeah, I think it's just because for the last seven years I've been doing private equity, which is I build businesses, so my brain is kind of built that way.
OMC: Speaking of the failed stadium attempt there, how different was that experience for you?
MZ: It wasn't easy for me. I've been told 'no' a lot. Usually it takes me two times. I think what was hard for me on that one – I've learned a lot of lessons – and politics, I've got to get better at that. I'm sort of a put your head down and bulldog through and I think that's what ended up costing me, quite frankly. The problem there in Franklin is the whole Common Council was shifting. So, we had a vision together with this Common Council, the mayor Steve Taylor, a big group of people, and we were at the 11th hour with it and it shifted and these guys were saying yes and we just assumed they'd say yes, too. And then …
That was a real tough one. But I'm not giving up on it.
OMC: Did you buy into Kokomo and Rockford with the hopes that one of those two could be moved to Franklin? Or was it just about getting into baseball?
MZ: This was very organic. We sat down with Franklin, sat down with the old mayor, I want to say in November, so a year and two months ago, and then after I convinced myself and I talked to the other owners of the (Frontier) League that I wanted to be in, I knew that I wanted to be in it even more, so when (Franklin) said no, I said OK, that's just for right now, or no in this community. But I wanted to get into baseball, so these other markets started surfacing.
So Rockford is a really, really interesting one because it's a distressed team for a number of reasons. But, if the market doesn't work for Rockford, we can move that team to Milwaukee. Or we can stay in Rockford. So it gives us an option.
The, the other two just became markets. Kokomo, I heard that they were looking for an owner and I talked them into picking me. The same thing in Jamestown. They had an independent team leave their market, they went to West Virginia, so here's this town that loves baseball – sort of like the Baltimore Colts – they left town one night. It was kind of like that. So this town is crushed. Beautiful stadium. Great contract. And since that I want to do I came in and said I'll do it.
We basically bought the new franchise, if you will, rights to that. You know what's funny – the level of talent, they aren't even going to know the difference that much. A lot of the Prospect League are going to go into single A all at some point. The average Joe probably wouldn't even realize. It's like Northwoods-level baseball.
OMC: Looking at the Wave, how important was it for you to get involved in Milwaukee?
MZ: That's a big piece of it. That's something I haven't … I've done all this really great work in healthcare and it's like the (Business Journal's) '40 under 40' that I just won, I get recognized for the work I've done in Milwaukee, which has been great, but the work in healthcare is important to the healthcare industry, so it's interesting. I love it. It's my hometown. I'm not on planes anymore. But the whole goal – which is why we named it MKE Sports & Entertainment – was to try to find a spot within Milwaukee. The Wave for me was also, it feels good to do it in the hometown. Absolutely. That's why I wanted to do a stadium in Franklin. I live in Franklin.
OMC: What was the genesis of the partnership between yourself and the University of Wisconsin-Milwaukee baseball team and building a facility in Oak Creek?
MZ: (UWM athletic director) Amanda Braun, she's terrific. We've had a relationship for the better part of a year and a half and we share the same vision, which is that Milwaukee should have a stadium. For these things to work, they need to work beyond just the independent baseball team. They need to have other players in it. So, she's sort of my partner in crime I guess you could say.
They're the only D1 program in the state and Scotty Doffek is one of the best coaches in the United States puts a good team out there, but if he had the tools, if he could compete the way other people could compete? So Amanda's been a great facilitator to kind of take their vision and my vision and put it into one, so now we're both fighting this fight to get a stadium here. And we just ironically share the same place at the Panther Arena.
One of my colleagues knows Scotty really well and we were trying to see if they had an appetite for coming on board with this vision of building a stadium and that started over a year and a half ago. We also talked with MSOE and a bunch of other people and then we finally sketched out a deal and said OK, this is what it would look like and feel like and let's join forces.
We're going to come together and and build a stadium so it services both a Frontier League team and the UWM program.
OMC: April will be a year with the Wave. Are you coming up on a point when you need evaluate where that's headed?
MZ: I would say first, the sport – I didn't understand the sport. I like it a lot. Now I'm a fan of the sport. So there's that element. The other is if you look at the financial metrics, the hypothesis we had to be able to turn this around, it's not moving as fast, but it's trending that way. So I feel great about it. For example, our ticket revenues are up. Now, what's interesting, is our attendance is down, if you look at the way they used to report it. I think they were at like 3,500 a game.
We're averaging close to 3,000 a game. Those are paid tickets. We stopped the free tickets just because it devalues it. We also put this entertainment component on – have you see the black turf? Stadium Journey, that was a proud day for us, they came out and reviewed our operation and they gave us five stars in almost everything and said it was one of the better events.
So, what concerned me for the last there or four months is what the Bucks are going to do. So, I had already kind of reaffirmed my – for me it was about the next year – I reaffirmed my longer term position, which is about three to five years that I'm in it, and I was concerned that the Bucks were going to come in and kill it.
So, that looks like that's put to bed. Now, the next challenge for us is to partner with the arena in a way that financially makes sense. They're killing us. They're absolutely killing us. We get no food and beverage. They penalize us if we don't sell tickets over $2,500. They're great people. They do great work. But, they could be … we could be more creative in giving us financial incentives that would help us be in it for the long, long term. We're in the last year of our contract and it's up for negotiation and I hope we can renegotiate some of the points that I think are major levers to the business.
It's great. The one thing that I think is the biggest struggle for me, and I understand it, is everybody knows the Wave. Everybody respects the Wave. But they don't care enough to come to games. It's the same soccer people. So, this is the marketing dilemma. How do I get people just to try us out? Just a week ago we tried this guarantee. We've got commercials saying give us a try, if you don't like the experience, we'll give you your money back.
I think we're going to have to be really outrageous in our marketing but I hope the city – we need the city to wake up to the Wave – and just give us a shot. Because the product is different. It's black turf. The team is really, really good. We're going to be in the hunt for the championship.
OMC: You mentioned the Bucks, I"m sure you're asked all the time if you were approached at all to buy in as one of the many local minority investors. Were you?
MZ: Never. Never. I called them a couple times. I'm too low on the totem poll. Indoor soccer. Which, whatever. I get. I'm also … I speak my mind a lot, so they're probably just like eh, he's a little too vocal because they have to keep all their stuff quiet. I haven't engaged with them at all.
OMC: But obviously what they do, or could do, directly affects you. I would imagine you're more than an interested observer in what they're doing with a new arena.
MZ: Yeah. I don't know – I don't want to sound whiny – I don't know why, with the Wave as such an important brand in Milwaukee, I don't know why we weren't considered in all of that. Bucks basketball is great. But building a solution that works for everybody, and in the end we'll probably get there, that to me – and I think that was the same with UWM, why are we not talking? That's what Milwaukeeans do. I dunno.
This is big business, big dollars at stake, I also get macro economics and I get why they need to be quiet. And, I also realize because we're a minor league team, if you will, even though we're part of the MASL, we get by because we're scrappy and we've got to be nimble. That's how we always win. So we're kind of used to that I guess. I would've loved to just socialize with what the resolution is.
OMC: You've mentioned pivoting hard at the very beginning – do you foresee any hard pivots this summer? Other big things on the horizon or are things settling down?
MZ: My wife asks the same question, so it's a good question. What I've told people, and I truly believe it, this year has got to be about us operating. We've been out buying all these things and now we've got to prove that we can be just terrific operators. And operating, in the end, is all that really counts. Executing is all that counts. So, my team has basically said 'please don't buy any more, just let us operate.'
So, having said that, that's MKE Sports. The big thing on the horizon is what we do with this – I want to be able to announce this stadium thing in the next 60 days. That's my goal. I think we're going to be able to do that. So that'll be the next, either it's not happening for 2016 or it is and here's sort of the macro vision, which is pretty, it's a pretty cool concept. The other thing is I'm dabbling a little bit in real estate stuff in Franklin. Franklin's got their own story and we'll see how, if, I participate in some of the stuff that they want to do in retail over there.
But, in terms of sports, this is about executing. But I'm also going to be looking. I'm always looking for new stuff. You never know. It's still January, right?
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