View Full Version : A study of Pacers current and future ownership and philosophy

05-15-2007, 08:19 PM
Today I was going through a list of the nation's richest people, the Forbes 400, in a magazine here at work. I was casually looking to see who was ranked where, etc etc, and I saw the the Pacers Mel Simon ranked in the top 75 or so.

While impressed by that, Ive also been pondering the Pacers future quite a bit recently, for lots of reasons. It's apparent to me that Seattle is going to lose their team, and cities like Las Vegas, Oklahoma City, and others are in growing areas of the country and seem ready to support franchises. Its also obvious that Indianapolis is becoming a "Colts" town instead of its traditional heart of the love of basketball. Attendance is down, and costs of owning a team have never been higher.

Then I began to read the profiles of these uber wealthy tycoons, and predictably most of them are older, the majority 65 and older. Melvin Simon and his brother fit into this group quite comfortably, as they are both in their 70's I believe. When you consider the negatives and age of our principal owners, I wonder where the next generation of owners for our franchise will come.

Now, I know that its been said by some that their family members will inherit and keep the status quo. David Simon, who is the CEO of Simon Properties, will likely be given the mantle. However, no one that I know of knows much about David and his committment to the Pacers long term, and that makes me wonder if indeed he will keep the team if he gets it, or how things will go when Melvin and Herb choose to move on.

So, for me several things and topics interest me about the Pacers long term ownership situation. First, if David Simon chooses to not be the heir apparent owner, who is likely to be our next savior of the franchise? Buying an NBA team is expensive to say the least, but there are those in the world with the cash to do so. However, how many of these people have Indiana ties/roots? I dont know the answer, Im hoping some of the more educated and aware posters on the board can help me on who would be interested, because I just don't know. In my brief research on the topic I didnt see any obvious candidates in business with Indiana ties who would be likely to be able to or want to own a team and keep it in Indianapolis. Who out there seems likely to buy us?

Secondly, what type owner do we want to have? The Simons are almost famously hands off, although there are some indications and innuendo that perhaps they are more involved than appears. Do we as fans like that hands off approach, or in the modern day NBA would we be better off with a younger, more dynamic and involved owner? You can criticize his behavior and odd statements, but no one can dispute that the wacky Mark Cuban has been a godsend for Mavericks long term financial stability and success. He is very hands on and involved in every decision and aspect of the team, and interacts with the media and fans alike. Does success in the future of professional sports mean having an owner who takes this proactive type approach, and is the traditional "skybox" owner you never see in public a thing of the past?

Lastly, have the Simon's been the problem all along? Is our beloved teams lack of clear vision and focus inherently due to their lack of committment and passion for winning? Is a lack of knowledge and love for basketball itself from ownership been the reason we've been consistently good, but not championship level, for so many years? Does the Pacers lack of savvy marketing and new age thinking come not from Donnie Walsh and Larry Bird, but instead from the old fashioned owners we have in place? Is there a conservatism and lask of risk taking approach that has cost us? On some level, the Simon's have been extraordinary owners, keeping us stable, providing a winning team and culture, building a state of the art arena that helped revitalize downtown Indianapolis into a premier sports city. They've done this in a classy and fair way, and havent been in ownership just to make money, theyve spent funds at an average rate for an NBA franchise, and above the norm some seasons. On other levels however, theyve failed by not ever owning a truly premier team, and never being able to put the pieces in place to become a championship team. Under their watch the Pacers have also lost some of their identity with the rest of the state and have almost become a non entity outside Marion County.

For example, in the past I have been critical of the Pacers lack of sophistication when it comes to using new school ways to analyze players. Here in Bloomington the famous Jeff Sagarin (of the Sagarin ratings found in your newspaper) has approached the Pacers with his breakdown of several basketball statistics, using new age statistics and information. Now, Im not saying I know or understand even all the technical jargon that the kooky Sagarin can come up with, but I can tell you that it was a sophisticated examination of data that has helped forward thinking teams like Dallas and Pheonix become powers. I suspect that the pacers by and large ignore data like that in favor of the more old fashioned methods.....I wonder if instead of the Donnie being conservative if its not the Simon's instead. Maybe the questions all these years shouldn't have been can Donnie Walsh build a champion, but can the Simon brothers run the franchise the way they want and field a championship team?

With their age and the Pcers current situation, the sad and uncomfortable truth is that Herb and Mel Simon most likely will never own a champion NBA franchise. The question is who will be our owners, and what type of man/woman will they be when we reach our ultimate goal? Will they even be in Indianapolis? And who on the horizon can take over if David and the others choose to spend their time elsewhere?

Questions to ponder in this long offseason abound, don't they?

Just my opinions of course.....


05-15-2007, 10:10 PM
So many questions :confused: My head hurts :hmm: I will review this when it isn't 6:14a my time.

But - is it out of the realm of possibility that Bird would put together a group to buy the team?

05-16-2007, 12:45 AM
So many questions :confused: My head hurts :hmm: I will review this when it isn't 6:14a my time.

But - is it out of the realm of possibility that Bird would put together a group to buy the team?

I think it's possible, but with that thought I have a few added questions:

1. Do we think Bird would be a good owner for us from a business sense long term? I'm not sure that I feel that confident in his financial decisions....

2. Who would be in a minority partnership with him?

3. Would the NBA approve some sort of cobbled together partnership where a variety of people all owned various percentages of the team? I would guess they'd be leery of creating another situation like Atlanta's murky ownership group.

4. Would Larry hire someone to run the basketball and business side of things and be a "traditional" owner, or would he be the active hands on type like Steinbrenner, Daniel Snyder, the Maloof brothers, and Mark Cuban?

05-16-2007, 12:55 AM
ESPN has our current franchise value at $340 million


Larry doesn't have anything even approaching the money necessary to be an owner with any real decision-making ability. The most he could do is be in a Jay-Z mascot role, I imagine.

05-16-2007, 07:22 AM
ESPN has our current franchise value at $340 million


Larry doesn't have anything even approaching the money necessary to be an owner with any real decision-making ability. The most he could do is be in a Jay-Z mascot role, I imagine.

This is true information, no question. So the mystery to me would be who do we think Bird's partners would be if he opted to lead an ownership group of people, and would the NBA like that type of arrangement of a "cobbled together" group owning shares of the team?

If they wanted a small group or single owner, who is around that has ties to the state and would no question leave the team in Indy that also is young enough to mess with it, and has the big time cash to make the deal? I looked around and didnt find any, and that has me worried......which was one of the points of starting this thread in the first place.

I dont see anyone on th ehorizon if David Simon doesnt come through, and with the age of Herb and Mel you have to consider the likelihood of what is likely to come in the next few years.

05-16-2007, 08:29 AM
Just pray David Hall doesn't buy your team and turn it into the Pistons West, as Dan Gilbert has done with the Cavs.

05-16-2007, 11:15 AM
Bird's partners were the runner-ups in Charlotte.

Belkin - an investment banker in Boston - is his name, I believe.

Bird would clearly be a minority owner.

As for David Simon, we've heard he's quite a penny-pincher.

And don't forget the estate tax - the entire $340 (if true) is a taxable gain (the tax basis in the franchise is actually negative $4-8 million because of assumed debt) so using a current rate of 45% and exception of 2.0-3.5 million (doesn't matter), the tax bill is going to be approximately $150 million dollars, payable in cash.

The estate tax is why the Halas family had to sell the Bears. And it keeps those of us in the valuation consulting business very busy.

05-16-2007, 12:26 PM
Does the name Tony George ring a bell? He's already a close friend with Jim Irsay so I could see the Jr. Hulman having an interest in a pro team like his buddy.

05-16-2007, 12:36 PM
OK - I've had some sleep now :D

I have no idea what kind of owners the Simons have truly been. I can assume with a fair amount of accuracy, however, that it has been a good situation for the organization and the city. I think you are correct in stating they will probably not own an NBA Championship team given the existing circumstances. But, they have already owned a team that COULD have been the champions with a little luck. It just didn't work unfortu-nately. This franchise has been a very good one for many, many years while also showing fiscal responsibility.

Now, future ownership. I think there is a danger to this franchise without "local" owndership. In fact, I believe the city fathers would would extend concessions to a local ownership group that would not be available to outside interests. I do think Bird will be in this mix in some capacity. I could also see a Smulyan (former Mariners owner) or Letterman (after he bails from his race team) involved. I could see the possibility of an Irsay or Tony George remotely involved some way. That's a lot of egos to deal with but I think all committed to Indianapolis. I think the franchise would be very vulnerable with absentee ownership.

As far as a franchise' worth, Jay would be a good reference point. After all, he just got done working on a project that made an airline seemed like it was worth something.

Do I know what I'm talking about? Of course I don't. I'm just speaking as a fan :D

05-16-2007, 01:34 PM
If ownership condones management in all of the mess that has been created then indeed ownership is part of the problem.