Saturday, January 6, 2018

Ever wonder about how State Fair Park makes money?

Sometimes you see reports that aren't that important in the big picture of things, but are still fun to look at. One of these was released on Friday, which was the Legislative Audit Bureau’s look at Wisconsin State Fair Park. This not only looked at attendance at the State Fair, but also the other events that go on at the park in West Allis, and how cost-effective it is from a state level.

Not surprisingly, the majority of State Fair Park revenues comes from the 11-day Wisconsin State Fair in late Summer (over $20 million, 79.3% of all revenues). The LAB looked at State Fair attendance from 2012-2016, and after a boost in 2013, total attendance remained relatively steady at just over 1 million attendees for each of the last 4 year tracked.

ANd in case you were wondering, State Fair Park does get a portion of the sales from food, drinks and rides at the fair.
State Fair Park typically charges food and beverage vendors 24.0 percent of reported net sales for food and non-alcoholic beverages and 30.0 percent for alcoholic beverages, while beverage only vendors are charged 30.0 percent of their net sales. Vendors operating attractions on the midway collect tickets from attendees and redeem these tickets for a percentage of midway revenues. State Fair Park retains 45.0 percent of ticket revenues from ride operators and 25.0 percent from game operators on the midway.
In addition to the State Fair, the other main way State Fair Park makes money is due to renting out facilities for a number of events ($4.9 million). The biggest income-makers are through trade shows that go through the park's Expo Center.
From FY 2012-13 through FY 2016-17, State Fair Park also leased facility space for approximately 180 revenue-generating events each year. The amount of space leased varied from a single conference room to large exhibit halls in the Wisconsin Exposition Center. Examples of some of the larger events include the Realtors Home and Garden Show, the Milwaukee Journal Sentinel Sports Show, the Milwaukee Boat Show, and the National Association of the Remodeling Industry Home Improvement Show.

We estimated the percentage of revenues for each type of event because State Fair Park maintains incomplete revenue information. As shown in Figure 8, an estimated 31.1 percent of the events for which space was leased were meetings, conferences, and social functions, but they generated 5.4 percent of total event revenues State Fair Park received from leasing space. Consumer and trade shows, which are primarily large events held in the Wisconsin Exposition Center, accounted for 26.0 percent of the events held and 71.3 percent of total event revenues.

From my standpoint, one of the more interesting aspects was a discussion of the Milwaukee Mile race track. The NASCAR Busch Series (or whatever they call it now) and open-wheel racing used to have events every year at the mile, but that hasn't happened for the last 2 years, and it led the LAB to analyze what needs to be done to bring back major auto racing to the Mile.

State Fair Park indicated that, in order to secure major racing events in the future, it would need to make significant upgrades to its racetrack, including repairing the racetrack surface, restoring its pit stops, and installing additional safety features along the racetrack wall. However, the future of the Milwaukee Mile remains uncertain because State Fair Park has not developed a formal plan for the future use of the facility or the space it occupies.

Although no major racing events have been held at the Milwaukee Mile since July 2015, State Fair Park has leased the racetrack to racing clubs, driving schools, charitable organizations, and other entities for a variety of smaller events. As noted, the amount of revenue generated by non-State Fair events hosted at the Milwaukee Mile decreased from $487,100 in FY 2012-13 to $286,400 in FY 2016-17. As shown in Table 10, the proportion of revenues from each type of event has changed over time, with major racing events decreasing from 48.8 percent of revenues in FY 2014-15 to zero percent in FY 2016-17.
The LAB says a problem with doing this analysis is that racetrack's effect is hard to isolate because of the way State Fair Park does their accounting, and it is difficult to figure out how much the concerts held at the racetrack boost the attendance and sales at the State Fair.

Another area of State Fair Park that has a WEDC-style lack of reporting and detailed analysis deals with the State Fair's Midway area. State Fair Park stopped contracting for the Midway (called Spin City) after 2011, and thought it would be more cost-effective to do it themselves. LAB says the record-keeping making it difficult to find out if that is true.
In two of our prior audit reports of State Fair Park in 2012 and 2013 (reports 12-10 and 13-8), we noted that it is important for State Fair Park to track its revenues and expenditures in order to determine and evaluate the financial effects of its decision to independently manage its midway. However, State Fair Park does not maintain the information needed to do so. We found that State Fair Park has not estimated net revenues for SpinCity since 2015, and the validity of its prior estimates is in question because no supporting documentation for them could be provided.

We also found that State Fair Park has not solicited information from potential vendors on the guaranteed revenue that may be available through a future contractual relationship for midway management. Consequently, it is unable to determine whether its decision to independently manage its midway is generating more revenue than it would receive by contracting with a vendor for midway management services. Although net revenue is not the only factor to be considered in assessing whether to independently manage its midway, it is important that this amount is known and taken into consideration when evaluating the future of midway management.

And like a lot of other areas in this state that have large amounts of animals in one place, State Fair Park has had problems in keeping nearby waterways clean. The audit notes that in September 2016, the Wisconsin DNR said State Fair Park was out of compliance in 6 areas dealing with storm water runoff, and since then, we don’t know if those concerns have been dealt with.
DNR held an enforcement conference with State Fair Park in October 2016 to address the areas of permit noncompliance. As a result, prescribed remedies for the areas of noncompliance were agreed upon, including immediately implementing interim methods of storm water control, implementing a management plan for animal feces for the 2017 State Fair, and annually clearing storm sewers after the completion of the State Fair. State Fair Park believes it has addressed all areas of noncompliance. However, through November 2017, DNR had not issued its report on the extent to which State Fair Park complied with the prescribed remedies resulting from the October 2016 enforcement conference during the 2017 State Fair.

Gotta clean up from guys like this.

Guess that makes DNR consistently negligent regardless of whether it's mega-farms in rural Wisconsin or at State Fair Park in 'Stallis.

By the way, the new Cream Puff Pavilion and Dairy Education Center will be entirely paid for by grants and gifts, so none of your tax dollars, admission fees or concession money should be going to that (although it is fair to ask who donated to it and why). There are other capital upgrades at State Fair Park whose debts are being paid by a little more than $3 million of tax dollars in this Fiscal Year, and the LAB notes that State Fair Park is looking for $6.8 milion in upgrades to facilities over the next 6 years. Although interestingly, none of those capital projects seem to involve sewer or storm runoff.

It's more human-interest than hard news, but it is intriguing to see how State Fair Park and the mid-Summer Fair operate. And the issue of whether the state should continue to be the main operator of the facility and what to do with the race track if there are no auto races are ones that should be revisited in the very near future. Also, should the site be used for more than what it's used for now (weekly pig races?).

In addition, after reading this you can dazzle your friends with facts and figures this Summer if you head over to West Allis to check it out! And maybe our politicians can use this LAB audit to come up with some good ideas to drive attendance and money-generation even further at State Fair Park.


  1. Makes ya wonder why Walker did a cream puff day video and tweet promotion.

    1. Sure does. The pro-CAFO Dairy Business Association comes to mind. Nice way for those guts to buy positive PR as well.

      I,couldn't find the names of the donors in the audit, but maybe someone else knows more than I do on that.