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View Full Version : Indiana Pacers future in jeopardy from financial losses [ESPN]



RoboHicks
03-12-2009, 08:20 PM
Indiana Pacers co-owner Herb Simon passionately says he doesn't want to see the city without his franchise.

More... (http://sports.espn.go.com/nba/news/story?id=3975398&campaign=rss&source=NBAHeadlines)

Shade
03-12-2009, 09:44 PM
Moving this to the main forum.

Kid Minneapolis
03-12-2009, 09:54 PM
Ouch...

Bball
03-12-2009, 10:11 PM
"Maybe the cost of keeping an NBA franchise in Indianapolis is more than the people of the city are willing to incur," Early said.

Spirit
03-12-2009, 10:25 PM
I have no idea what i'm going to do if they move. Basketball is my life and my biggest passion, mostly centered around the Pacers. If they moved it would still be hard to just give up being a fan. I mean, i'd have to, but it will still be hard.

PaceBalls
03-12-2009, 11:07 PM
I have no idea what i'm going to do if they move. Basketball is my life and my biggest passion, mostly centered around the Pacers. If they moved it would still be hard to just give up being a fan. I mean, i'd have to, but it will still be hard.

I would still follow the team, but it would suck not being able to watch the games on local tv.

Where would be the most likely place they could end up? Las Vegas?

Kid Minneapolis
03-12-2009, 11:17 PM
I would still follow the team, but it would suck not being able to watch the games on local tv.

Where would be the most likely place they could end up? Las Vegas?

God, how ironic would it be if they moved to Baltimore...

heywoode
03-13-2009, 12:09 AM
They aren't going anywhere.

Will Galen
03-13-2009, 12:28 AM
Seattle Supersonics reborn? Tampa Bay Pacers?

special ed
03-13-2009, 12:57 AM
We all know this because IndyStar had the story last week. I'm not certain if this is the MO here, taking the story national after the local story got little sympathy? Or is ESPN simply jumping aboard, late to the party?
Bottom line is no business can continue to operate like this with the albatross that the Pacers work under. There are a number of businesses in today's climate out there that nobody ever thought would be facing similar decisions (and chose to bail). Just ask former GM employees...or ex DHL employees...or former Visteon people...

nerveghost
03-13-2009, 06:52 AM
It would be tough to see them move if it happened...but if they moved to Vegas it would be a little easier to swallow :) ROADTRIPS!!

Putnam
03-13-2009, 07:00 AM
Nothing new here. The key bits are this




"I have no thought of leaving Indiana," he said. "Only a thought of preserving the Pacers and keeping them in Indiana. That's the only issue right here."


and this

"We can handle the team," he said. "It's the operation of the facility that's causing us the problem. We're not asking anyone to pay for us. It's just the operating of the facility."


Once again, we are reminded that Conseco Fieldhouse is a public facility that at the moment is in private hands. The change that is being talked about would return that public facility to public control. On principle, people ought to support that.

Will Galen
03-13-2009, 07:13 AM
I live in Florida and don't pay Indiana taxs and don't go to Pacer games. If the Pacers move I will still follow them, so I'm really an outsider looking in.

It appears to me after reading all the threads that the only sensible thing to do is for the city to take over the running of CFH. That appears to be the only choice and everything else is just talk.

It's simple math. You lose the Pacers and you have to take over running CFH anyway, but you lose what the Pacers bring in.

grace
03-13-2009, 07:20 AM
God, how ironic would it be if they moved to Baltimore...

Does that mean Indianapolis gets to take the Cavs from Cleveland? :D

2minutes twowa
03-13-2009, 07:27 AM
I live in Florida and don't pay Indiana taxs and don't go to Pacer games. If the Pacers move I will still follow them, so I'm really an outsider looking in.

It appears to me after reading all the threads that the only sensible thing to do is for the city to take over the running of CFH. That appears to be the only choice and everything else is just talk.

It's simple math. You lose the Pacers and you have to take over running CFH anyway, but you lose what the Pacers bring in.

True. When you break it down like that, the decision seems fairly obvious. In return, I think the city should ask for a lengthy commitment from the Pacers to stay in Indianapolis without any out clauses. The city will take over the operating expenses of Conseco, and the Pacers promise to remain in Indianapolis for 20 years. The last thing we want is for the city to take over Conseco, then 10 years down the road, the Pacers threaten to leave town if they don't upgrade.

Bball
03-13-2009, 08:01 AM
I live in Florida and don't pay Indiana taxs and don't go to Pacer games. If the Pacers move I will still follow them, so I'm really an outsider looking in.

It appears to me after reading all the threads that the only sensible thing to do is for the city to take over the running of CFH. That appears to be the only choice and everything else is just talk.

It's simple math. You lose the Pacers and you have to take over running CFH anyway, but you lose what the Pacers bring in.

So the city's choices are to take over the running of Conseco and pay 15mil per year to keep the Pacers...

or...

Let the Pacers walk and take over running Conseco at the cost of 15 mil per year.

The only thing is, option #2 allows them to sell CFH, tear it down which ends the 15mil per yr obiligation, or utilize it how they see fit and reap 100% of the profits on those events.

IMHO Option #2 isn't the worst thing for the city if they are truly looking at this from a realistic and prudent point of view with the taxpayers' best interests at heart and willing to push the Pacers on the issue.

At least with option #2 you have some control and aren't in this situation again in 5 years.... 10 years... etc.. and expected to fork over even more money.

As I keep saying there comes a time when someone in government needs to say "no". You simply cannot keep milking taxpayers for these luxuries that show fewer and fewer tangible benefits to the city. Bragging rights alone are not solely worth it.

I don't want to see the Pacers leave either, but they need to find a way to make the product sustainable and self sufficient both inhouse and through the league. These taxpayer subsidies are skewing the market and player salaries and allowing these NBA franchises to ignore market realities or react much too slowly to them. Instead of fixing the real problem, they just ask the city/state for more money. Again, if the Pacers truly lost money in all but one year in their time at CFH then something is wrong besides the local government not showing them enough 'love'.

And I absolutely don't believe Indy is that much different than any other city when it comes to tastes. They will have the same issues no matter where they go if they continue to operate the team in the same fashion. Sure, they might get a honeymoon period elsewhere and a deal from another city that is better... or simply 'different'.... but if nothing else changes internally with the team and the league then nothing is going to be any different externally either. In fact, the other option is possible too: It could be worse. At least the Pacers have some history here.

Open the books. From what I gather there hasn't been a complete opening of the books. I still doubt the numbers.

BillS
03-13-2009, 08:15 AM
So let me understand - what would you put in place of CFH if you tore it down? A soaring office building packed full of people who can't find space in the current real-estate glut? Another parking lot? A homeless shelter?

Tearing down CFH would be idiotic on a huge scale.

Our best hope is that other owners are in the same boat and that players realize it isn't in their best interest to kill the golden goose.

Here's my biggest question - if the CIB wasn't in a hole due to screwing up the negotiations with the Colts, would you still be against them operating CFH? If so, were you against them operating LOS?

Will Galen
03-13-2009, 09:43 AM
IMHO Option #2 isn't the worst thing for the city if they are truly looking at this from a realistic and prudent point of view with the taxpayers' best interests at heart and willing to push the Pacers on the issue.



If the city fathers were truly looking at this from a realistic and prudent point of view with the taxpayers' best interests at heart they would never have entered into agreements with the Colts or Pacers. No city would do that for a team, yet it's standard practice.

As for opening the books who's to determine which figures to look at? Some people would say that their Mall income offsets their CFH loses.

It looks to me like losing the Pacers is the worse course for the city anyway you look at it.

MarionDeputy
03-13-2009, 10:14 AM
Once again, we are reminded that Conseco Fieldhouse is a public facility that at the moment is in private hands. The change that is being talked about would return that public facility to public control. On principle, people ought to support that.

I would support that if the users of the facillity paid rent for it. Essentially the Pacers and Colts, want state of the art stadiums but don't want pay or contribute even a share to pay for them, they don't want to pay anything to operate the stadiums even on days where it's their private business operating,they then want to collect all the revenue on game days and even revenue on non-game activities, and give nothing to their landlords.

I guess I got problems with that.

naptownmenace
03-13-2009, 10:21 AM
From what I've noticed the past couple of years, CFH is really underutilized. They hardly have any major concerts anymore or other events and this is most likely because the Simons are trying to keep the operating costs low. They have to pick up the tab during the offseason and for those other events so it seems they're trying to keep things to a minimum.

IMO, the best outcome would be for the city to take over the building expenses for non-Pacers and Fever related events. That way they can bring in major concerts, the circus, conventions, whatever they want when the Pacers aren't in town and generate some additional revenue. It may not be a great option but it might be better than losing the team outright and having to take control of an unoccupied building.

Tom White
03-13-2009, 10:42 AM
The part where Simon says they can handle the team expenses, but not the fieldhouse really gets to me.

To me, it means:

They can handle paying Reggie a 6 or 12 million "thank you" contract, plus a Bentley.

They can handle paying a max to Croshere after a couple good games in a playoff series.

They can handle paying multiple coaches contracts as well as multiple "GM" contracts.

They can handle a 6 million per year (I'm guessing here) extension to a center with a bad back who can't hit a layup.

They can spend a boatload on European scouting that enriches the team with Stanko and Lorbek.

They can spend big bucks on outside consulting firms to tell them their team needs to clean up its act for PR purposes. (Something anyone with any sense could have figured out.)

They can handle throwing a huge expensive fund raiser for Hillary Clinton plus donating who knows how much to her campaign.

But, they can't handle paying rent on the facility THE TAXPAYERS paid for to give THEIR team a place to play. (Was Market Square Arena really that bad a place, to begin with? What was wrong with it, other than it wasn't new?)

You guys can tell me I'm wrong, or add your own pet peeves to my list, but this is really bugging me.

Major Cold
03-13-2009, 11:15 AM
So basically it is this:

Who will cover the check for the building? And since the Pacers are penciled in, why would the city further put themselves in shambles for it? If the Pacers just up and move do they still have to cover the lease?

Speed
03-13-2009, 11:24 AM
Do the Pacers reap the benefit of the parking, concessions, etc? If so, shouldn't those things go to the entity running the fieldhouse? I mean, to me, it's one way or the other. If the CIB will foot the bill for operating expenses then they should get what that produces, the parking and concessions or at least a big ole chunk. If the Pacers pay for the guys that tell me where to park and the guy who gets my beer, then the Pacers should get the profit on $8 parking and a $6 beer. Is this too simplistic of a thought process?

I guess what does running the fieldhouse consist of Electric bill, ticket takers, and Green Jackets, along with the Parking and consessions.

If the question is, okay the city pays for all of the expenses and the Pacers get to keep all of the inflow of money. How does that make any sense?

This coming from the guy that believes you do almost whatever it takes to keep them here.

Bball
03-13-2009, 11:46 AM
I would support that if the users of the facillity paid rent for it. Essentially the Pacers and Colts, want state of the art stadiums but don't want pay or contribute even a share to pay for them, they don't want to pay anything to operate the stadiums even on days where it's there private business operating,they then want to collect all the revenue on game days and even revenue on non-game activities, and give nothing to their landlords.

I guess I got problems with that.


I'm right there with this.

Bball
03-13-2009, 11:57 AM
The part where Simon says they can handle the team expenses, but not the fieldhouse really gets to me.

To me, it means:

They can handle paying Reggie a 6 or 12 million "thank you" contract, plus a Bentley.

They can handle paying a max to Croshere after a couple good games in a playoff series.

They can handle paying multiple coaches contracts as well as multiple "GM" contracts.

They can handle a 6 million per year (I'm guessing here) extension to a center with a bad back who can't hit a layup.

They can spend a boatload on European scouting that enriches the team with Stanko and Lorbek.

They can spend big bucks on outside consulting firms to tell them their team needs to clean up its act for PR purposes. (Something anyone with any sense could have figured out.)

They can handle throwing a huge expensive fund raiser for Hillary Clinton plus donating who knows how much to her campaign.

But, they can't handle paying rent on the facility THE TAXPAYERS paid for to give THEIR team a place to play. (Was Market Square Arena really that bad a place, to begin with? What was wrong with it, other than it wasn't new?)

You guys can tell me I'm wrong, or add your own pet peeves to my list, but this is really bugging me.

And I'm right there with this too.

As long as cities and states keep subsidizing these sporting ventures to the levels they do, and bending over backwards to every threat or veiled threat, then the teams and league don't have to react to market realities. Player salaries escalate. Marketing takes a backseat. There's 'extra' money to give someone an empty title or pay multiple people for the same basic job.

The problem is not an Indianapolis problem, it's a Simon and NBA problem. They are just making it an Indianapolis (and Indiana) problem and the CIB is allowing them to do it.

Discussing the Colt deal is meaningless because that is crying over spilled milk.That one is already done. This is compounding the problem. They can't afford THAT deal so how can they now add this extra for the Pacers on there too? Other than using it as a lesson in guiding cities in future endeavors of this type it serves no useful purpose to say "The Pacers deserve what the Colts got". Not when the Colts don't even deserve what the Colts got or else deserve it or not, it can't be afforded.

If the city is going to pay to own and operate a building, they should see some profit sharing DIRECTLY from that. Not mythical, hard to define "benefits". And then that is compounded when they basically GIVE the building to the teams without even a damage deposit.

DocHolliday
03-13-2009, 12:20 PM
The part where Simon says they can handle the team expenses, but not the fieldhouse really gets to me.

To me, it means:

They can handle paying Reggie a 6 or 12 million "thank you" contract, plus a Bentley.

They can handle paying a max to Croshere after a couple good games in a playoff series.

They can handle paying multiple coaches contracts as well as multiple "GM" contracts.

They can handle a 6 million per year (I'm guessing here) extension to a center with a bad back who can't hit a layup.

They can spend a boatload on European scouting that enriches the team with Stanko and Lorbek.

They can spend big bucks on outside consulting firms to tell them their team needs to clean up its act for PR purposes. (Something anyone with any sense could have figured out.)

They can handle throwing a huge expensive fund raiser for Hillary Clinton plus donating who knows how much to her campaign.

But, they can't handle paying rent on the facility THE TAXPAYERS paid for to give THEIR team a place to play. (Was Market Square Arena really that bad a place, to begin with? What was wrong with it, other than it wasn't new?)

You guys can tell me I'm wrong, or add your own pet peeves to my list, but this is really bugging me.

I remember when they were begging for the Fieldhouse to be built the main idea was that building it would solve the team's financial woes incurred from playing in such an old building with no luxury suites. "Just build this for the team and we will finally be financially competitive with the rest of the league". I'm fine with letting them leave. It's not my first choice, but I'm sick of the talk. Tom White outlined most every reason why, minus the Bender fiasco.

Pacers24Colts12
03-13-2009, 12:24 PM
I'm curious, I'm not a big NHL fan by any means...but has the city ever looked at bringing in a NHL team to help out? I'd think an NHL and NBA team would be able to split the costs of the arena easily. I know many teams in the NHL move around alot, and it seems like Indiana would be an ok fit, atleast better than Phoenix. Thoughts?

count55
03-13-2009, 12:34 PM
I'm curious, I'm not a big NHL fan by any means...but has the city ever looked at bringing in a NHL team to help out? I'd think an NHL and NBA team would be able to split the costs of the arena easily. I know many teams in the NHL move around alot, and it seems like Indiana would be an ok fit, atleast better than Phoenix. Thoughts?

This memory is so old, that I don't know if it's apocryphal or not, but it seems to me that the NHL actually made several advances to Indy during the '80's and early '90's, but ownership could not be found.

Also, you have to realize that three separate hockey franchises have been formed and folded in Indy during the Pacers' existence: The Racers, The Checkers, and The Ice... (The Indiana Ice are a separate franchise, playing at a much, much lower level.)

I like hockey, but I would have a hard time spending money on both the Pacers and the NHL team...let alone the time.

Pacers24Colts12
03-13-2009, 12:38 PM
Yeah I was just curious. I know those other teams were not NHL teams...I figured some team would be willing to relocate to a state of the art arena. I also figure people probably look at Indy now, alot differently than they did in the late 80's and early 90's.

count55
03-13-2009, 12:45 PM
Yeah I was just curious. I know those other teams were not NHL teams...I figured some team would be willing to relocate to a state of the art arena. I also figure people probably look at Indy now, alot differently than they did in the late 80's and early 90's.

Well, the Racers were a WHA team...which was actually an off shoot major league similar to the AFL or ABA, but the others were minor league teams.

But consider this from Bill Simmons' "No Benjamins Association" column:


Looking at the big picture, the league won't struggle even 1/10th as much as the NHL in years to come -- of all the wildest predictions I heard in Phoenix, the craziest came from a connected executive who predicted that fifteen NHL teams would go under within the next two years (and was dead serious) -- and Major League Baseball is about to get creamed beyond belief.

BillS
03-13-2009, 01:14 PM
Don't get me started on Nelson Skalbania.

If the Pacers/Simons paid for 60% of the Fieldhouse, which I seem to remember, will the city pay them for the residual?

Also, since the additional money from the suites means the Pacers themselves are making a profit not including the operational expenses, wouldn't that mean they were correct about the Fieldhouse?

YoSoyIndy
03-13-2009, 08:48 PM
I would support that if the users of the facillity paid rent for it. Essentially the Pacers and Colts, want state of the art stadiums but don't want pay or contribute even a share to pay for them, they don't want to pay anything to operate the stadiums even on days where it's their private business operating,they then want to collect all the revenue on game days and even revenue on non-game activities, and give nothing to their landlords.

I guess I got problems with that.

You have to look at it like the big venues look at concerts or top-tier shows like Cirque. These shows pay a "rental fee" and keep the majority of the revenue. If the CIB wants a bigger cut of the revenue, then they would also have to be willing to take some of the variable financial hit, which they don't.

YoSoyIndy
03-13-2009, 08:50 PM
I'm curious, I'm not a big NHL fan by any means...but has the city ever looked at bringing in a NHL team to help out? I'd think an NHL and NBA team would be able to split the costs of the arena easily. I know many teams in the NHL move around alot, and it seems like Indiana would be an ok fit, atleast better than Phoenix. Thoughts?

The NHL team may take half the costs, but they'd canabalize ticket sales from the Pacers and Indians. More entertainment competition wouldn't help in this case.

owl
03-13-2009, 09:09 PM
I live in Florida and don't pay Indiana taxs and don't go to Pacer games. If the Pacers move I will still follow them, so I'm really an outsider looking in.

It appears to me after reading all the threads that the only sensible thing to do is for the city to take over the running of CFH. That appears to be the only choice and everything else is just talk.

It's simple math. You lose the Pacers and you have to take over running CFH anyway, but you lose what the Pacers bring in.


Well, if you put it that way, maybe something can be worked out.
The Pacers are an Indiana institution, almost like one class basketball used to be.
Oops, bad analogy :-). It seems like Canseco could somehow be made profitable.

Evan_The_Dude
03-13-2009, 09:39 PM
The hidden hint I don't think anyone is getting is where Simon says this: "I have no thought of leaving Indiana," he said. "Only a thought of preserving the Pacers and keeping them in Indiana. That's the only issue right here."

That to me means the Pacers could very well move, but they may just move elsewhere in Indiana. Where? Who knows.

Big Smooth
03-13-2009, 11:08 PM
The hidden hint I don't think anyone is getting is where Simon says this: "I have no thought of leaving Indiana," he said. "Only a thought of preserving the Pacers and keeping them in Indiana. That's the only issue right here."

That to me means the Pacers could very well move, but they may just move elsewhere in Indiana. Where? Who knows.

Eh.......I really don't see what you are seeing there at all.

"I have no thought of leaving Indiana."

"Only a thought of preserving the Pacers and keeping them in Indiana."

Those two sentences say the exact same thing.

Unless you are talking about moving them to a suburb like Carmel or something? Because let me tell you the 2nd biggest city in the state is Fort Wayne and there is no way in hell we can support a NBA team here. Not now........yeah we had the Pistons like 60 years ago or whatever it was....we are a minor league town now. And after Fort Wayne you aren't going to find any other cities in the state capable of supporting a NBA team.

Of course the Chicago Bears did threaten to move to Gary, Indiana at one time. LOL

Kemo
03-13-2009, 11:59 PM
I guess what does running the fieldhouse consist of Electric bill, ticket takers, and Green Jackets, along with the Parking and consessions.


I would imagine the Pacers have to pay for insurance to carry on CFH , and I bet it is UNGODLY .. definitely in the MILLIONS per year ..


Plus you have the property taxes which I'd imagine are as equally high , if not higher .. ( the owner of CFH has to pay this though )

Not sure what all the Pacers take personally are responsible for as far as CFH , but I imagine it is a ridiculous amount of money..

Drewtone
03-14-2009, 05:36 AM
Well, the Racers were a WHA team...which was actually an off shoot major league similar to the AFL or ABA, but the others were minor league teams.

But consider this from Bill Simmons' "No Benjamins Association" column:

And the funny thing is that I never knew Gretzky played his first professional hockey in Indy for the Racers, not to mention Mark Messier was on the Racers roster for a couple of games. I only found that out when I moved up to Ottawa.

indygeezer
03-14-2009, 05:51 AM
The absolute loudest I ever heard MSA was during a Racers playoff game and Kim Clarkson was the bully of the league. (Pre-Artest psychology).

Peter_sixtyftsixin
03-14-2009, 09:14 AM
I saw this on Indy Cornrows:

Bill Benner
IBJ
http://www.ibj.com/html/detail_page.asp?content=33554


From the department of no good deed goes unpunished, I present to you Herb and Mel Simon.

You know, those “greedy billionaires” who have done so little for this city over the years.

Except to keep their business here and grow it into the largest of its kind in the country.

Except to personally employ thousands of Hoosiers and serve as the economic engine that has put countless others to work.

Except to erase the blight by filling in those holes in the heart of downtown with that little thing called Circle Centre mall.

Except to donate millions upon millions of dollars to local charities, hospitals, not for-profits … you name it.

Except to rescue the Indiana Pacers from out-of-state ownership—remember Sam Nassi?—26 years ago when no one else wanted them. Even if it meant absorbing enormous losses along the way. They did it not because they enjoy losing money, but because they considered the Pacers an important community asset worth saving (Quick quiz: Want to know how to become a millionaire? Start out as a billionaire and buy a small-market NBA team.)

Sure, they’re rich guys and you know what? Good for them. I wish I had the business savvy and personal chutzpah to be able to walk a mile or two in their Italian loafers.

I’m also old enough to recall a time in America when accumulation of wealth and providing livelihoods for others wasn’t considered an awful thing.

And unless I’m mistaken, there never has been a hint of scandal about how they advanced their fortunes. What I do know is that they took risks, and the risks paid off. They’re self-made men. Again, a trait that once was admired in this country.

Yet now they—younger brother Herb, especially—are being pilloried for bringing the Pacers’ financials problems to light and asking for relief with the operating expenses of Conseco Fieldhouse.

Suffice it to say there’s plenty of blame to go around for the fine mess the Pacers and the Capital Improvement Board find themselves in. But any criticism of the Simons must be kept in the perspective of their positive influence on Indianapolis and their investment in the Pacers.

I hasten to remind everyone that this is not a franchise that arrived via Mayflower moving vans (and that’s not a knock on the Colts) but was born of the blood, sweat and tears of good Indiana people who had the vision long ago of using professional basketball as a catalyst to make our burg a better place.

Herb and Mel Simon sustained that vision and never uttered a complaint through year after year of losing money.

Yet there’s a lot of undeserved garbage being tossed in their direction, balanced by little appreciation of the immense contribution they have played in the city’s development.

As for the Pacers, absolutely, beginning with The Brawl in Detroit, they had a bad run. But the last “incident” took place long ago. With Herb Simon’s imperative and direct involvement, this franchise has cleaned up its act and is putting forth a team that is busting its collective rear end and playing close to the maximum of its potential.

In a sincere attempt to reconnect to the public, the Pacers have offered tickets for as low as five bucks. That’s less than a movie. Oh, and even as they continue to lose money, the Pacers have announced an across-the-board reduction in season-ticket prices for next year.

Among NBA owners, few if any have worked or lobbied harder than Herb Simon in trying to convince Commissioner David Stern that the NBA salary and revenuesharing structure is out of whack. That’s not a fight he’s waging just for his own benefit, but for the good of the league, especially with two-thirds of the teams—including virtually all the midsize and small markets—bleeding red ink.

Unbelievably, Stern continues to put on a happy face about the state of his league. Wonder if he’ll still feel the same way when the NBA’s down to 16 teams.

By all accounts—especially his own—Herb Simon’s commitment to the Pacers is unwavering. Just like the commitment the Simons made to the city years ago.

Imagine Indianapolis without the jobs they’ve created. Imagine Indianapolis without the Pacers, or the fieldhouse, or Circle Centre, or a revitalized downtown, or the millions they’ve donated to charities.

A better place? I, for one, think not. And I’m glad the greedy billionaires chose Indianapolis as their home. •

Benner is director of communications for the Indianapolis Convention & Visitors Association and a former sports columnist for The Indianapolis Star. His column appears weekly. Listen to his podcast via podcast at www.ibj.com. He can be reached at bbenner@ibj.com. Benner also has a blog, www.indyinsights.com.

Putnam
03-14-2009, 09:32 AM
I wish he hadn't written this. I agree with his defense of the Simons, but Benner is such a toadie, he doesn't persuade anyone.


BUT!!

What about this part? Is he right? Where does he get this information?



especially with two-thirds of the teams—including virtually all the midsize and small markets—bleeding red ink.

2minutes twowa
03-14-2009, 10:45 AM
I wish he hadn't written this. I agree with his defense of the Simons, but Benner is such a toadie, he doesn't persuade anyone.


BUT!!

What about this part? Is he right? Where does he get this information?

That sentence caught my eye as well. The only teams I have heard that are struggling are Pacers, Grizzlies, Hornets. A better profit sharing model has to come to the NBA or they will start losing teams.

beast23
03-14-2009, 11:00 AM
I wish he hadn't written this. I agree with his defense of the Simons, but Benner is such a toadie, he doesn't persuade anyone.

BUT!!

What about this part? Is he right? Where does he get this information?I was alwas hot and cold on Benner. I think that regardless of how anyone feels about Benner and all of the columns he wrote through the years as sports editor, they will look beyond that because they cannot deny a single word that he has written.

For weeks I've been totally peeved reading comments made by some of our own forum members who state that the Simons can stick it. I know that some of these comments were just lashing out, made out of anger, and possibly fear and perhaps a little panic.

But emotions aside, unless one is under the age of 20 or so, one would have to be an absolute fool not to know or see what the Simons have done for Indianapolis.

And now, all Herb wants to do is to "get the Pacer house in order" before passing the team on to one of his heirs. Again, unless one is an ostrich with his head buried in the sand, this is an obvious attempt by Herb to once again protect the interests of Indianapolis by doing everything he is capable of doing to keep the team here.

I don't know if he has enough years left to make the team a money-maker, or if that is even possible considering the present NBA business model (particularly the salary and contract strucutres) and the fact that we are a small market team. But a reasonable goal might be to pass it on when it is not such a huge money-loser. Maybe then the selected heir will be willing to leave matters as they are and keep the team where it belongs; in Indy.

I for one, have great respect for Herb Simon's efforts; they cerainly are not something to be scorned as some on here have done.

As for Benner's comment regarding the number of losing teams, I'm not certain who was the first to say that the number of losers was 1/2 or 2/3 or whatever, but it seems like most of the folks that speak about the NBA's economics reference that figure. Other's just say that "only a handful" are profitable or that "not many" are profitable. A good place to start for a more legitimate reference might be Forbes.

owl
03-14-2009, 11:16 AM
The NBA needs to change how it works financially.

Kid Minneapolis
03-14-2009, 11:32 AM
I can't help but wonder if the Pacers would be in this situation had the Brawl not happened... a part of me realizes this is a small market, and the Pacers haven't been a very good team for the past 3-4-5 years, and that *could* be all it takes to put a team at a major disadvantage in this economy... but there's that part of me that thinks the Pacers as a business would be a tad better off at the moment had Artest not gone into the stands... that put such a bad taste in everyone's mouth outside of Indiana, even casual fans from across the nation were spitting venom at the Pacers for that. It really hurt the organization.

BlueNGold
03-14-2009, 11:38 AM
The problem is not with the Simons persay. They may be the best owners we could ask for of the Pacers. The problem is with professional sports and how they are financed. Specifically, the issue is with the "business model" of the NBA combined with the way our city and state have been spending our tax dollars to support that "business model". While he makes valid points about the Simons, Benner needs to spend a little time distinguishing the issues and identify where a large part of the frustration is truly rooted.

As for Benner's depiction of the Simons, I think it too shows only one side of the coin. I seriously doubt the Simons are in their real estate business simply to employ people. Somewhere along the way, there must have been a strong profit motive to pile up billions. ...and there is no mention of the fact that professional sports franchises amount to expensive hobbies for the ultra rich, rather than profit-making businesses. The decision to participate in such a hobby takes on risk that the public...many who couldn't care less about the NBA or the Pacers...did not choose to take at a time like this. With that said, I reiterate that I doubt we could have better owners. They should feel slighted by the deal the Colts received. The real angst should be going toward the Irsays IMO. All things considered, I think a combination of the Colt's deal and the economy brought this all to a head...and I'd appreciate some honesty on that point...

idioteque
03-14-2009, 11:40 AM
I don't really have a problem with the Simons at all, they have done a ton for the city. Plus, they're only asking for something that someone else already has, so it isn't like they are establishing some sort of crazy precedent. I only hate that it is now acceptable and logical for a team to ask for such assistance from the state.

count55
03-14-2009, 11:48 AM
And the funny thing is that I never knew Gretzky played his first professional hockey in Indy for the Racers, not to mention Mark Messier was on the Racers roster for a couple of games. I only found that out when I moved up to Ottawa.

Yeah, I saw them both play. Years ago, I was cleaning out my closet when I found an old, old Racers program that had Wayne Gretzky in it. I showed it around, then it went back in my closet, where it got buried and probably caught up in other old mags/programs and thrown away later.

Wish I'd still had it when ebay came along.

NuffSaid
03-14-2009, 11:49 AM
Putnam,

I'm not sure how man folks on this board know how I became a Pacers fan or if any of them would think it relevant, but I'll share the short version anyway because I do think it puts things in perspective.

I grew up in Northern IN - Lake County area (Ok, Gary...dang! Drag it outta me why don't cha!? :p ) where for over 24 years I never knew my state had it's own professional basketball team. It wasn't until I was stationed in Indianapolis in the mid-80's while on shore duty in the Navy did I come to know about the Pacers. It was about the same time Reggie came on the sceen. The team was built around him and had some of my favorite players - Dale & Antonio Davis, Rik Smits, Mark Jackson and, of course, Reggie. Watching those guys play...I was hooked on this team.

Over the years since I was introduced to this team, the Pacers have had more up years than down. That's why it amazes and shocks the hell outta me (sorry FA, but the one use of profanity is appropriate in this case) that since the Brawl so many fans are against them. Mind you, as I review the posts from online news articles (see IndyStar.com) it would appear most of those making comments are youngsters and not fans who have been around long before the turn of the 21st Century. So, I tend to take their commentary with a grain of salt. Why? Because most either don't know or have forgotten about the years of consecutive post-season appearances and competitiveness this team has provided. And let's not forget the years of community contributions not to mention the jobs that remain in force where so many involved w/the Pacers take pride in performing.

I admit, from time to time I've been frustrated with this team's performance, mostly because I remember what this team was like pre-Brawl. But I try real hard to show patience during this rebuilding process. To quote Austin Croshere when recently asked about the direction the Pacers are going, "They're headed in the right direction," as far as their on- and off-court performances are concerned. They may not be winning as we all would like, but they're competing. They're trying very hard. If mgmt continues to make the right moves, I think in another season or two they'll be back among some of the best teams in the league. But the local fans truly need to come back and support them.

I live in northern Alabama, but if I could get to more than a game or two a year, I'd be front and center at the Fieldhouse. Why? Because I remember where this team came from. I remember when they really weren't anything in the league, but they played hard and never gave up. I remember the rivalries - Knicks, Magic, 76ers, Bulls, and most recently the Pistons - and the years of consecutive post-season appearances. I believe management has done a great job over the years trying to put a great product on the floor and within the community in a small-market area. Unfortunately, (the younger) fans seem to have forgotten. I say it's time the local fans start remembering what they had and begin to realize they can have that same level of pride in their team again. As Croshere said, "They're headed in the right direction".

The article is a great reminder of what the city of Indianapolis has in the Pacers, and really should be honored that the Simons still want to keep this team in the city despite the fact that they apparently have loss money in recent years. I can't imagine what Indianapolis would be like without the Pacers. I hope things turn around for this proud franchise sooner rather than later.

Local fans, get behind your team not to push them out of town but to support them totally. You (the city) need them as much as they (the team) needs you.

DisplacedKnick
03-14-2009, 12:01 PM
I would ask Benner just where is the overwhelming depiction of the Simons as greedy, grasping, selfish people who are only out for themselves. I'm sure there have been a few letters to the editor and the occasional call in to a radio show but methinks Benner's just wasted a whole bunch of electrons on nothing.

Most folks will understand it if the team moves. They won't like it one bit but they'll understand.

sloopjohnb
03-14-2009, 12:26 PM
That sentence caught my eye as well. The only teams I have heard that are struggling are Pacers, Grizzlies, Hornets. A better profit sharing model has to come to the NBA or they will start losing teams.

I posted this article by Bill Simmons on another Simon thread on PD and will post it again. It was long and I expect not many people read it.

http://sports.espn.go.com/espn/page2/story?page=simmons/090227

Specifically, 4. The dawning of NBA Franchise Hot Potato, speaks about some of the teams that are in trouble financially in the NBA.


Franchise Hot Potato hinges on five factors in all, although only three need to be in play. You need a team with a dwindling fan base and/or bailing sponsors and suite/courtside customers. (I count 11: Indiana, Memphis, Milwaukee, Sacramento, New Jersey, New Orleans, Miami, Orlando, Minnesota, Charlotte and Philly.) You need a team trapped in an aging stadium that can't drum up local money for a new one. (I count three: Sacramento, Jersey and Milwaukee.) You need an owner who purchased his team because he was worth a ton of money ON PAPER … only now, he's worth significantly less and might even be worth $10 for all we know. (Consensus candidates for this list: Phoenix, Hijack City, Jersey, Memphis, Indiana, Atlanta, Milwaukee, Charlotte … and, surprisingly, Sacramento and Cleveland.) You need cities with NBA-ready, modern arenas either finished or about to be finished that would love nothing more than stealing a team. (Definitely Kansas City, Anaheim, San Jose, Louisville, Tulsa and Pittsburgh; possibly Columbus, St. Louis; and just for fun, let's throw in Montreal and London.) And you need a struggling team that can actually extricate itself from its lease.

Looking at the next 15 months only, the consensus of people in the know was that multiple NBA franchises (guesses ranged from three to eight) will move cities, get sold to new owners or throw themselves on the mercy of the league (meaning the NBA would effectively take over operations of that franchise, kinda like what happens in the MLS or WNBA).

I'm not sure if this completely relates, but Simmons even mentions Cleveland as a team that is struggling financially (or at least the Cleveland owners).

By the way, this article is a good read and may settle or increase concerns about the Pacers moving. The article also mentions the upcoming CBA and how it should be a major victory for the owners this time around--including significant pay cuts across the board for the athletes.

My thoughts are this: if there are that many teams struggling, then at least the other cities trying to lure teams will have a pot to choose from. Usually when an NBA team moves, it's one at a time. Charlotte to New Orleans, Vancouver to Memphis, and Seattle to Oklahoma City were all moves that happened at different times.

Hope someone else finds this interesting and useful. Cheers!

YoSoyIndy
03-14-2009, 12:32 PM
I would ask Benner just where is the overwhelming depiction of the Simons as greedy, grasping, selfish people who are only out for themselves. I'm sure there have been a few letters to the editor and the occasional call in to a radio show but methinks Benner's just wasted a whole bunch of electrons on nothing.

Most folks will understand it if the team moves. They won't like it one bit but they'll understand.

I disagree with your entire post.

1) Check IndyStar.com the past couple weeks. Check the caption of the photos of TJ Ford signing autographs before the game. Check the story on David Simon and his salary of $3.4MM -- that wouldn't have been posted if his name wasn't Simon. Check the negative tone in the majority of the posts to the articles. People hate billionaires because they're rich even if they are self-made and support the town.

2) Most folks won't understand if they move because they'll just say, "How's this about money? The owners are billionaires!" You really think if the Simons moved the team or sold it to someone else that the majority of people would have rational responses?

El Pacero
03-14-2009, 12:34 PM
I agree with everything Benner wrote. Someone semi-important needed to say it. There is Lilly, then there is the Simons, and then I can't think of anyone else who has helped the City of Indianapolis more.

Taterhead
03-14-2009, 12:40 PM
I would ask Benner just where is the overwhelming depiction of the Simons as greedy, grasping, selfish people who are only out for themselves. I'm sure there have been a few letters to the editor and the occasional call in to a radio show but methinks Benner's just wasted a whole bunch of electrons on nothing.

Most folks will understand it if the team moves. They won't like it one bit but they'll understand.


The reality is the Simons have done great things for Indianapolis. But why doesn't Bill Benner mention any of the things Indy has done for them? You could write this article from either point of view and be on the money. I mean can you not be appreciative but at the same time disagree? What a moronic POV.

My position is that this is the wrong time to be asking for more. And that goes for everyone, not just them. With all their business savy they need to at the very least, find a way to minimize the damage. And I don't believe in making concessions to people using tax payer dollars, especially those who haven't made any concessions themselves first.

The real problem here is the NBA business model and some bad team decisions. Not the deal for Conseco Fieldhouse. So why is that the focus? They should be putting their energy into fixing the real problem, JMO.

Bball
03-14-2009, 12:48 PM
The real problem here is the NBA business model and some bad team decisions. Not the deal for Conseco Fieldhouse. So why is that the focus? They should be putting their energy into fixing the real problem, JMO.

Tell Benner to read this part over and over and then get back to us...

Pacers24Colts12
03-14-2009, 01:28 PM
Guys...the Simons have said they have no problem with running the costs of a NBA team, its the cost of Conseco that is killing them.

able
03-14-2009, 01:46 PM
The real problem here is the NBA business model and some bad team decisions. Not the deal for Conseco Fieldhouse. So why is that the focus? They should be putting their energy into fixing the real problem, JMO.


It's exactly what they are doing, CFH is costing them 15 million USD a year, with that post OFF their balance sheet the Pacers in general make a profit, so their business model aint that wrong, it's the housing cost that is.

So. how good was this deal, how much money did it cost the taxpayer of Indiana and what and who is still in debt on CFH ?

CFH cost $ 183 mio to build, coming in at a little 4% over budget due to ecenomny, financed by;


May 6, 1999
Copyright 1999 MediaVentures

The Conseco Fieldhouse, the new home of the Indiana Pacers that opens this fall, is running about four percent over budget, putting the final estimated cost at $183 million. The original budget was $175 million. Much of the extra cost came from dealing with contaminated soil at the site. Construction expenses, brought on by a strong economy, also added to the increase. The same strong economy has kept interest rates down, allowing the city to borrow more to meet the cost without increasing its financing cost.

The city has invested $79 million in the venue with $57 million coming from the Pacers and the rest will come from other private sources. The private money will be repaid by the city in 20 years. The Pacers' contribution will come from arena revenues and will be paid over 20 years. Public funding is supported by a tax district and an increase in the hotel-motel tax. A ticket tax will also provide funding for the debt. Based on the fact that last year those taxex on food and tickets were US$ 8 million, the 10th year of the opening of CFH, one can assume that a very large part of that "public" finance has been paid back by the Pacers themselves, add to that the 50% they paid of by now on the US$ 57 mio financing they had to pay for, and one can conclude that outside the maintenance and running cost very little cost are coinciding with CFH.

Indianapolis owns the building, for which a large part was paid by the Pacers and based upon taxes coming in as well, paid in full by the Pacers, yet the Pacers are also maintaining and running it to their own detrimental tune of $ 15 mio.

On top of that they were still paying for MSA:


November 11, 1999
Copyright 1999 MediaVentures

The Indiana Pacers opened their new $183 million retro-style fieldhouse to an enthusiastic crowd last weekend. The venue replaces Market Square Arena and offers fans better sight lines, better concession facilities and a host of other improvements. It's design is intended to reflect a high school fieldhouse.

The venue features 71 luxury suites, including two party suites, priced from $89,000 to $175,000 and 2,500 club seats selling for $2,050 to $3,239. The venue has a 400-seat Varsity Club for the club seat holders.

Other amenities include larger and more locker rooms and improved press facilities.

The team agreed to a new 20_year lease and must pay off $150 million in bonds on Market Square Arena. The team also gets all revenue and must pay $500 million in damages if it leaves before its lease expires. The team is responsible for $57 million of the cost. Another $79 million came from various local taxes and the rest is from private contributions. Among those contributions is an in-kind contribution of $10 million from Eli Lilly and Co. for use of adjacent land for a parking lot. Ogden Entertainment will provide general concessions while Levy will be operating the premium food service. Local restaurants will also have a presence in the new arena. compare that to LOS:

projected to cost $ 500 million, actual cost $ 720 mio


The stadium project is linked with the expansion of the Indiana Convention Center. These projects will be funded by a 1% tax on all prepared food in the 9 counties that surround Indianapolis except Morgan County. Marion County (County that holds Indy) will fund the project with an additional 1% tax on top of the original 1% that Marion Co. already pays for the RCA Dome. The project will also be funded by an increase in the Marion County hotel tax, rental car tax, also the sale of special Colts vanity license plate, and future lottery tickets earmarked for the project.On top of that:


In addition, details to be released today could include a provision reducing the city's obligation to make annual payments to the Colts beginning in 2006 to keep them playing here. Under the team's existing contract, the city could owe the Colts payments totaling at least $36 million through 2008, when the new stadium would open.

--skipped--

The development agreement does not call for a ticket tax -- and makes it almost impossible for the state to impose one. If the state wants to try, the development agreement says, officials have to consult with several groups first, including the Indiana Pacers, the Indianapolis Indians, the city and hospitality groups. Even then, the Colts could break their lease if the ticket tax is imposed, said John Klipsch, executive director of the Indiana Stadium and Convention Center Building Authority.

And finally WHY CIB is in trouble in reality and this has nothing to do with the Pacers asking for something they haven't got yet:



INDIANAPOLIS VENUE BOARD SEEING RED INK
January 29, 2009
Copyright 2009 MediaVentures (http://mall.ballparks.com/index.php?vendor_id=16)
Indianapolis, Ind. - The Indianapolis Capital Improvement Board, which manages Lucas Oil Stadium and other sports venues, says its operating deficit could grow to $43 million by next year, far worse than projected and too large for it to solve alone.
Part of the problem: the expected renegotiation of the Indiana Pacers' lease of Conseco Fieldhouse. The basketball team pays $15 million a year to cover game-day expenses, and the CIB, calculating the worst-case scenario, is assuming it could have to take over that cost.
To get out of its financial mess, the CIB could try to renegotiate better deals with the Indianapolis Colts and other sports teams that use the stadiums it runs.
It also could ask city taxpayers for help, though no new taxes could be raised without the OK of the city or state.
Neither option was discussed; instead, board members said the goal was to review the problem and kick off efforts to find solutions.
The situation is so dire that board Treasurer Ann Lathrop said auditors are reviewing the CIB's finances as a "going concern," a term used to suggest that its near-term viability is in question.
The board already had projected an operating deficit of up to $20 million per year in running Lucas Oil Stadium, and it added $5 million to that total for other facilities this year. Just as pressing, the CIB now expects to have to pay $43 million this year for unanticipated loan and insurance obligations brought on by the ongoing world financial crisis.
Debts that could have been handled in the past are being called in by banks short on cash, Lathrop said. Another one-time debt payment of nearly $34 million more will come due in 2017. Bob Cockrum, the City-County Council president and a CIB member, said nearly every option for a solution is on the table.
Raising taxes during a recession, he said, likely would provoke a strong negative reaction. "Some people would support it for one team or another, but others would say enough is enough," Cockrum said. "I don't think a bailout is an option."
He said the first step for the board was to reduce expenses.
It ordered a cut of 8 percent, or about $6 million, from this year's budget of $78 million and instituted immediate freezes on hiring, salaries and travel.
Just how effective any of the more obvious solutions might be will be a big question for the board to tackle.
Colts owner Jim Irsay could not be reached for comment, but Pete Ward, the team's vice president, last year said the idea of "reopening a (lease) agreement that took four years to negotiate is ludicrous."
Patrick Early, the board's vice president, said the struggling Pacers are expected to use their option to renegotiate their lease this year.
He said he expected the CIB will have to take on more of the expenses of running Conseco if it wants to keep the team in Indianapolis.
"All we've established is that the business model we're working with now can't work in the long term," Early said. "We haven't figured out a solution, but I believe it's in the best interest of the city to have the Pacers stay in that building."
Early said the Pacers' owners, Mel and Herb Simon, can't continue to lose money on the team, even as he acknowledged that the players' legal troubles in the recent past contributed to falling attendance and income. He said the team makes less than the NBA average because it's in a smaller TV market.
"Ultimately, we own the building," Early said, "so we'll have to deal with those expenses." While the Pacers pay $15 million a year to play at Conseco, the city agreed to bear game-day expenses for the Colts in exchange for a lease that would keep the team in town for at least 30 years.
Rick Fuson, chief operating officer of Pacers Sports & Entertainment, said in a statement that he was pleased that the CIB is already looking at the problem.
CIB President Bob Grand said the board will need to work with the teams, the city and financial experts to get out of its trouble.
He said he was not ready to ask the Colts to renegotiate a deal that many have criticized as too generous. But he said the board will review CIB grants for the arts and other groups and try to find a way to manage its facilities better.
Grand had asked Lathrop to study the costs of the new stadium once a full season was complete. Lucas Oil Stadium, at 1.8 million square feet, is nearly double the size of the recently imploded RCA Dome, so its higher operating costs aren't surprising. Its water and electricity costs are higher, too.
With the higher costs, the CIB operating fund balance will dwindle to $5.6 million this year from tens of millions in past years.
The problem can be traced to the plans developed to finance the stadium.
City officials had anticipated covering increased costs with taxes from a proposed Downtown casino. But when the state wrested control of the building project in 2005, the new plan included no casino or other way to cover the increased operating expenses.
State officials say they never agreed to pay those costs. Under the terms of the state's financing, excess revenue from higher taxes on food and beverage sales, hotel bookings and car rentals will be used to pay off construction bond debt early rather than to cover operating costs.
Officials think an expanded convention center Ð expected by late 2010 Ð and the new business it attracts eventually will help cover the CIB's operating costs. But the board's problems are more immediate.
Grand said he did not expect the board's financial problems to affect the city's hosting of the 2012 Super Bowl. (Indianapolis Star)now can we focus on what is really going on instead of saying Pacers run a bad business model ? they pay off CFH and ran it, now they're tired of bearing all cost, rightly so.

Tom White
03-14-2009, 01:50 PM
Just a couple of things here -

"Except to keep their business here and grow it into the largest of its kind in the country."

Yes, they have done very, very well, and congrats to them on that.

"Except to personally employ thousands of Hoosiers and serve as the economic engine that has put countless others to work."

Well, sorta. I would have to say, past the construction phase, it is the tenants of the commercial ventures the Simons own who are the employers of a greater number of people.

"Except to erase the blight by filling in those holes in the heart of downtown with that little thing called Circle Centre mall."

Unless I'm wrong (wouldn't be the first time) that $1 a year 99 year lease takes a lot of risk out of that venture. Not to mention the tax incentives that came with it.

"Except to donate millions upon millions of dollars to local charities, hospitals, not for-profits … you name it."

Once again, good for them, and congrats on doing that. I'm sure there have been some tax benefits along the way, but good has been done.

"Except to rescue the Indiana Pacers from out-of-state ownership"

At the time, maybe, but the last I knew the Simons are actually residents of California, not Indiana. Heck, I think Irsay was an Illinois resident when he brought the Colts to Indy, then moved here. The Simons have done the reverse. Not all out of state owners are bad just because of where they live.

One last thing. I keep seeing people mention the brawl. Just remember the years and years of supposedly losing money goes back a LONG time before the brawl. The Detroit situation was not the be-all, cause-all of the problem.

Pacersfan46
03-14-2009, 02:07 PM
The real problem here is the NBA business model and some bad team decisions. Not the deal for Conseco Fieldhouse. So why is that the focus? They should be putting their energy into fixing the real problem, JMO.

The Simons can't change the NBA business model. That's not a job that's in their power. So why would you expect them to focus energy on something they can't change?

I'm sure they're doing what they can to change it, but that isn't much when it's not your decision.


One last thing. I keep seeing people mention the brawl. Just remember the years and years of supposedly losing money goes back a LONG time before the brawl. The Detroit situation was not the be-all, cause-all of the problem.

I've read a couple things, and believe that until the brawl the losses were much more bearable than they are now. I would venture to guess ... just a guess mind you .... that the losses incurred since the brawl would come close to rivaling the losses of all other years before that. I have no facts, but just call it a hunch.

-- Steve --

Midcoasted
03-14-2009, 03:33 PM
Eh.......I really don't see what you are seeing there at all.

"I have no thought of leaving Indiana."

"Only a thought of preserving the Pacers and keeping them in Indiana."

Those two sentences say the exact same thing.

Unless you are talking about moving them to a suburb like Carmel or something? Because let me tell you the 2nd biggest city in the state is Fort Wayne and there is no way in hell we can support a NBA team here. Not now........yeah we had the Pistons like 60 years ago or whatever it was....we are a minor league town now. And after Fort Wayne you aren't going to find any other cities in the state capable of supporting a NBA team.

Of course the Chicago Bears did threaten to move to Gary, Indiana at one time. LOL

Move them to Evansville when they build their 11,000 seat downtown arena. LMFAO. I remember when some senator wanted to move the Colts to Evansville, it was a joke. I'm an Evansville native but I'm not sure if they could realistically support a pro franchise, as much as I'd love to see it. A metro area of 300,000 could not support a franchise, or can it? Take Green Bay for example.

Here is a real option though. Build a stadium on the Indiana side of Louisville overlooking the skyline? Louisville wants a pro team. 2 birds one stone and Id still support them. If they leave Indiana or move to Gary then no.

Naptown_Seth
03-14-2009, 03:59 PM
Not the deal for Conseco Fieldhouse.Um, of course it's the deal.

1) You run one business.

2) You run a 2nd business

3) Business 2 is losing money and you feed money from biz 1 to keep it going.

4) The contract runs out on biz 2 and you have the chance to stop running it.

Do you keep running it or get out?

As Able has pointed out in several places, you have the team part and the arena part. The Pacers are simply saying "um, you go ahead and run it, we don't want to be in that business anymore because it costs us money".


If the CFH situation was a money maker do you really think the Simons would want out of the deal? Common sense people. I'm sure they'd love to funnel money from the arena portion back to the team portion. It's the fact that money is going the other way that has them interested in changing terms.



Well, sorta. I would have to say, past the construction phase, it is the tenants of the commercial ventures the Simons own who are the employers of a greater number of people.I'm pretty sure that Simons' HQ next to the Westin employees at least 1 or 2 people.

Naptown_Seth
03-14-2009, 04:08 PM
Keep them in Indy thing - Simon is simply saying that by balancing the books the team would be far less at risk to move/fold if and when they are sold. He's saying that not only does he not want to move them, but he wants to make it so that a new owner would be compelled to keep them in place too due to being financially healthy.

Swingman
03-14-2009, 04:24 PM
Simons are trying to get taxpayer so why can't he try to get Stern to change the business model instead?

As for the original article, it is severely flawed. He says people used to be applauded for being successful and becoming rich and claiming that it's not the case today. What he fails to realize is no one is saying anything bad about him being rich. We just don't feel taxpayers should pay their operating expenses.

Building/operating expenses is part of running the team so them trying to separate the 2 is laughable.

count55
03-14-2009, 04:29 PM
Keep them in Indy thing - Simon is simply saying that by balancing the books the team would be far less at risk to move/fold if and when they are sold. He's saying that not only does he not want to move them, but he wants to make it so that a new owner would be compelled to keep them in place too due to being financially healthy.

Yup.

able
03-14-2009, 05:01 PM
Simons are trying to get taxpayer so why can't he try to get Stern to change the business model instead?

As for the original article, it is severely flawed. He says people used to be applauded for being successful and becoming rich and claiming that it's not the case today. What he fails to realize is no one is saying anything bad about him being rich. We just don't feel taxpayers should pay their operating expenses.

Building/operating expenses is part of running the team so them trying to separate the 2 is laughable.


let me try and explain something to you :

1. they have no intrest in getting the money form the taxpayer, in fact extra tax on tickets comes out of the Pacers pockets again, as they wont raise ticket prices, they just lowered them.
They dont say where the money comes from, they just say "here's your building, we paid for it, we dont want to pay for running it anymore, so you run it"
The CIB would have had NO PROBLEM if they were not paying 30 million dollar a year to run Lucas oil stadium.

2. they pay 8 million in taxes a year towards that building, they paid 57 million to building it and are paying off the states part of 79 million, yet the state/city owns the building, wouldn't you say if you own it you maintain it?

Bball
03-14-2009, 05:11 PM
Keep them in Indy thing - Simon is simply saying that by balancing the books the team would be far less at risk to move/fold if and when they are sold. He's saying that not only does he not want to move them, but he wants to make it so that a new owner would be compelled to keep them in place too due to being financially healthy.

But he's also saying I want the taxpayers to make this private venture healthy. That is game that has very little track record backing it up. -IF- the team has not been viable in all this time that Conseco has been here then the problem is not the lack of taxpayer funding, it is the business model. Particularly when you read that other teams are also having problems. It's a problem that needs addressed by the NBA and other owners overall and IMHO some questionable decisions in Pacerland hurt the Pacers even more.

No amount of taxpayer dollars are going to fix this. Taxpayer dollars will only remove the incentive to fix it. Those dollars totally skew the numbers and removes market factors from the equation. That is wrong.

The Pacers already have a sweetheart deal. Sure, the Colts' deal may be better... but that's a pointless argument when most people aren't thrilled with that either. Especially now that the true numbers are coming to light. These sports palaces weren't built with an eye on reality and budget. The retractable roof at LOS says it all to me. That was unnecessary spending.

Two wrongs aren't going to make a right in giving the Pacers a sweeter deal. Worse, it's done on the backs of taxpayers in an economic client of diminishing returns. And doubly so because we keep hearing that other teams are also having problems. The taxpayers can't be expected to prop up a failing business model.

Fix the business model first... then come to the taxpayers...

IMHO the thing the Simons should do is come to an agreement to live with the deal as-is until after the new CBA for some set period of time (5 years?). Then in the meantime turn their efforts from putting their hands in the pockets of taxpayers and move them to David Stern to get the NBA in line with reality (short term and long term) as well as work on getting their own house in order. Then revisit this in 5 years. Now is not the time to be having this discussion regardless if now just happens to be when the door opened on the current contract. If anything, the CIB needs a better deal from the Simons if they want to renegotiate this now.

kellogg
03-14-2009, 05:12 PM
Though I agree the Simons have done much for the state and local community, the bottom line still is whether taxpayers should shoulder the burden for a keeping a private business afloat.
A much better arrangement would be for the owners (and the NBA in general) come up with a more equitable distribution of league revenue; also the NBAs owners should make drastic changes to the CBA. I think a middle class family would have a lot of difficulty going along with higher taxes knowing one the reasons is to preserve the ability of the players to make millions.

able
03-14-2009, 05:14 PM
But he's also saying I want the taxpayers to make this private venture healthy.



Please show me where, when he said that ?

I can find no quote of that nature, opposite yes, but not that nature.

speakout4
03-14-2009, 05:21 PM
Just a couple of things here -

"Except to keep their business here and grow it into the largest of its kind in the country."

Yes, they have done very, very well, and congrats to them on that.

"Except to personally employ thousands of Hoosiers and serve as the economic engine that has put countless others to work."

Well, sorta. I would have to say, past the construction phase, it is the tenants of the commercial ventures the Simons own who are the employers of a greater number of people.

"Except to erase the blight by filling in those holes in the heart of downtown with that little thing called Circle Centre mall."

Unless I'm wrong (wouldn't be the first time) that $1 a year 99 year lease takes a lot of risk out of that venture. Not to mention the tax incentives that came with it.

"Except to donate millions upon millions of dollars to local charities, hospitals, not for-profits … you name it."

Once again, good for them, and congrats on doing that. I'm sure there have been some tax benefits along the way, but good has been done.

"Except to rescue the Indiana Pacers from out-of-state ownership"

At the time, maybe, but the last I knew the Simons are actually residents of California, not Indiana. Heck, I think Irsay was an Illinois resident when he brought the Colts to Indy, then moved here. The Simons have done the reverse. Not all out of state owners are bad just because of where they live.

One last thing. I keep seeing people mention the brawl. Just remember the years and years of supposedly losing money goes back a LONG time before the brawl. The Detroit situation was not the be-all, cause-all of the problem.
I can't even begin to understand this minimizing and lack of appreciation of the Simon's contribution to this city. If you haven't noticed the simon's do not run a charitable or not for profit organization.

IMO the Simons have not asked to make a profit from their ownership but are merely asking to stop the huge losses. The same can't be said for Irsay.

Bball
03-14-2009, 05:32 PM
There's 3 threads now and I find myself repeating things as I add new thoughts to each of these threads.

The Simons should be told 'no'. They've been at the top during a host of bad decisions that has certainly not helped their financial position with this team. Only 10 years into the deal and they want/need a better one. We're hearing other teams are also hurting. That is indicative of an NBA problem. 'Fixing' this problem with taxpayer dollars (and government has no money other than taxpayer money so let's not try and say the Simons aren't asking for taxpayer dollars) only allows a failed or failing business model to continue to operate in a failing manner. It skews the market and takes all pressure off the operators to find a better way to operate (that would be owners and the NBA itself... as well as put more monies into the coffer that player agents and union reps will want to seek).

Does anyone think we'd be seeing these ticket bargains if local government tossed the Simons some bailout dollars with no strings attached to shore up their bottom line? Would Tinsley still be on the court and in the court if ticket sales weren't such a concern?

And now is absolutely not the time to be seeking anything from the taxpayers for a luxury item such as a pro sports team. Even though the contract has a window of opportunity for the Simons to use it now, if anything it should be the CIB looking for a better deal at this point. The best thing for all involved IMHO is to agree to extend current terms for a few years and renegotiate this after the new CBA and better business practices established by the NBA and the Pacers have been given a chance. Hopefully that will also be better economic times for the city and state. And if it's not, then that would just be a very good reason why this cannot be negotiated now.

BTW... I don't think anyone needs to worry because I think there is little doubt the CIB will cave and give the Simons 100% of what they ask for and will ask nothing in return for it. Nor will they demand a complete and thorough examination of the books. I'm just curious if the location of the new downtown casino has also been decided and whether it will be all electronic or will have table games with real dealers and not just computerized table games with hosts.

-Bball

BlueNGold
03-14-2009, 05:43 PM
The Simons can't change the NBA business model. That's not a job that's in their power. So why would you expect them to focus energy on something they can't change?

I'm sure they're doing what they can to change it, but that isn't much when it's not your decision.

-- Steve --

I understand the love for the Simons. I'm not anti-Simon at all. However, the truth has to be told.

All the owners, including the beloved Simons, are a big part of the problem with the NBA because without their participation, the "business model" of decades of financial losses would not exist. Normal people have to make money in such matters. The NBA is nothing more than an expensive hobby for the ultra wealthy...and sometimes the ultra arrogant (Cuban). The main point is, without the billions people like the Simons have available, this silliness would not exist.

It does take two to tango, so the players and their union are the other problem...but without the deep pockets this foolish and risky game would have never been possible.

Now, there's nothing at all wrong with being wealthy and having an expensive, money-wasting hobby, but when you take risks with your money like that you should not push those risks onto other people. ...and although the Simons may very well have been generous with their money, their generosity does not necessarily reach the people who need to clean up this particular mess.

Anyway, the Simons are tied for 3rd at 3.5B in assets among NBA owners based on the information I have seen posted. That's enough money to make more than the 15M a year in interest. Even if they didn't earn a penny of interest on their billions, they could lose 15M a year for 200 years...yes until 2209...and they would STILL be multimillionaires...and that's based on their current assets. Let's just say there is no emergency here.

OTOH, if they are losing money in other ways...which they are undoubtedly...their fortune could be at risk...but please don't tell me that CFH is why they may need to sell the Pacers. What this is all about is the economy and the deal the state gave the Colts. Maybe it's that view they have from their new high-rise of Lucas Oil Stadium. It is a great view you know.

able
03-14-2009, 05:48 PM
Bball they are not asking for taxpayer's dollars, they are not even asking for money for that matter, they are saying, CIB run CFH, we dont want that anymore.
Since City/State owns the building that is a reasonable request as the Pacers are already pay 8 mio a year in taxes towards it.

speakout4
03-14-2009, 05:52 PM
There's 3 threads now and I find myself repeating things as I add new thoughts to each of these threads.

The Simons should be told 'no'. They've been at the top during a host of bad decisions that has certainly not helped their financial position with this team. Only 10 years into the deal and they want/need a better one. We're hearing other teams are also hurting. That is indicative of an NBA problem. 'Fixing' this problem with taxpayer dollars (and government has no money other than taxpayer money so let's not try and say the Simons aren't asking for taxpayer dollars) only allows a failed or failing business model to continue to operate in a failing manner. It skews the market and takes all pressure off the operators to find a better way to operate (that would be owners and the NBA itself... as well as put more monies into the coffer that player agents and union reps will want to seek).

Does anyone think we'd be seeing these ticket bargains if local government tossed the Simons some bailout dollars with no strings attached to shore up their bottom line? Would Tinsley still be on the court and in the court if ticket sales weren't such a concern?

And now is absolutely not the time to be seeking anything from the taxpayers for a luxury item such as a pro sports team. Even though the contract has a window of opportunity for the Simons to use it now, if anything it should be the CIB looking for a better deal at this point. The best thing for all involved IMHO is to agree to extend current terms for a few years and renegotiate this after the new CBA and better business practices established by the NBA and the Pacers have been given a chance. Hopefully that will also be better economic times for the city and state. And if it's not, then that would just be a very good reason why this cannot be negotiated now.

BTW... I don't think anyone needs to worry because I think there is little doubt the CIB will cave and give the Simons 100% of what they ask for and will ask nothing in return for it. Nor will they demand a complete and thorough examination of the books. I'm just curious if the location of the new downtown casino has also been decided and whether it will be all electronic or will have table games with real dealers and not just computerized table games with hosts.

-Bball

Either the Simon's subsidize this team out of their pockets or the city does or a combination of the two. What is clear is that the team does not make money so whose money do you want to spend. If no one ponies up they are gone. A new nba model is likely the last thing that will happen. Do you really believe that a nba with fewer teams would be less successful? Do you expect more successful teams would forego profits to keep losing markets viable. Your model from a business standpoint means the demise of teams like the Pacers. Or do you think that more savvy local owners would make a profit?

speakout4
03-14-2009, 06:00 PM
Anyway, the Simons are tied for 3rd at 3.5B in assets among NBA owners based on the information I have seen posted. That's enough money to make more than the 15M a year in interest. Even if they didn't earn a penny of interest on their billions, they could lose 15M a year for 200 years...yes until 2209...and they would STILL be multimillionaires...and that's based on their current assets. Let's just say there is no emergency here.
.

Let's just say they do not want to continue this losing hobby. They were not interested in this hobby initially but did it at Hudnut's request. When do we let the Simon's out from under this compassionate gesture they made 30 years ago. If the Simon's sell to local investors more interested in the bottom line we will see higher ticket prices and a $40M roster that will look like the Grizzlies.

Bball
03-14-2009, 06:08 PM
Well, how about the CIB says "We'll pick up operating expenses and then we'll need to change your annual lease payment to something a little higher than it is now. Our accountants tells us that as long as everything else remains the same then we'll need to charge 15 million per year at minimum and will need a caveat in the contract to renegotiate this in 5 years if certain conditions are met. Do you want us to draw up the papers?"

EDIT: I'm not sure I made my point. The point being: The CIB doesn't have the 15mil that the Simons' seek. It's got to come from the taxpayers...

And, also the point being that the Simons don't have a bad deal now. Before the LOS deal most thought the Simons already had the city bending over backwards for them.

-Bball

BlueNGold
03-14-2009, 06:09 PM
Let's just say they do not want to continue this losing hobby. They were not interested in this hobby initially but did it at Hudnut's request. When do we let the Simon's out from under this compassionate gesture they made 30 years ago. If the Simon's sell to local investors more interested in the bottom line we will see higher ticket prices and a $40M roster that will look like the Grizzlies.

How about we let them out of the deal when the players reduce their salaries to make up for half of the 15M. Sound fair?

speakout4
03-14-2009, 06:42 PM
Well, how about the CIB says "We'll pick up operating expenses and then we'll need to change your annual lease payment to something a little higher than it is now. Our accountants tells us that as long as everything else remains the same then we'll need to charge 15 million per year at minimum and will need a caveat in the contract to renegotiate this in 5 years if certain conditions are met. Do you want us to draw up the papers?"

EDIT: I'm not sure I made my point. The point being: The CIB doesn't have the 15mil that the Simons' seek. It's got to come from the taxpayers...

And, also the point being that the Simons don't have a bad deal now. Before the LOS deal most thought the Simons already had the city bending over backwards for them.

-Bball
It appears the pacer owners are just tired of losing money and in the next few years their heirs will make the hard decisions. Your response will be when the owners say enough losses and they are selling locally or moving the team?

Move out of Indy or sell locally________
We will renegotiate the 15M in your favor__________

Swingman
03-14-2009, 06:42 PM
let me try and explain something to you :

1. they have no intrest in getting the money form the taxpayer, in fact extra tax on tickets comes out of the Pacers pockets again, as they wont raise ticket prices, they just lowered them.
They dont say where the money comes from, they just say "here's your building, we paid for it, we dont want to pay for running it anymore, so you run it"
The CIB would have had NO PROBLEM if they were not paying 30 million dollar a year to run Lucas oil stadium.

2. they pay 8 million in taxes a year towards that building, they paid 57 million to building it and are paying off the states part of 79 million, yet the state/city owns the building, wouldn't you say if you own it you maintain it?

1. Lucas Oil Stadium has nothing to do with the Pacers. This isn't case law. Just because the Colts bent the city over backwards and took advantage doesn't mean the Pacers deserve to as well.

2. The Pacers should be glad the city gave them a $79 million dollar loan with what I would assume little to no interest. Instead they're asking for more money because they can't manage their expenses better. The city owns it because the Pacers still haven't paid off their debt to the city. When you have a mortgage on your home and a bank owns most of it, does the bank pay your living expenses/operating costs? I think not because that's the real world the rest of us live in.

Tom White
03-14-2009, 07:50 PM
Bball they are not asking for taxpayer's dollars, they are not even asking for money for that matter, they are saying, CIB run CFH, we dont want that anymore.
Since City/State owns the building that is a reasonable request as the Pacers are already pay 8 mio a year in taxes towards it.

But able, where do you think the CIB/City/State is going to get the money if not from the taxpayers? It has to come from somewhere, right?

Hicks
03-14-2009, 07:53 PM
Please show me where, when he said that ?

I can find no quote of that nature, opposite yes, but not that nature.

I think the reasoning behind what Bball is saying is this:

Simons wants CIC to pay the $15m
CIC may say yes to that, but if they do they don't have $15m
Therefore, after saying yes, to foot the bill they will tax the people of Indy

So without wanting it to happen that way, the Simons are in effect asking for tax payers to cover it because CIC won't have the money on their own, and they will have to get it from taxes.

Personally, I haven't followed this closely enough to know whether the CIC can pay for it or not. I've read enough that it seems they'd have to do some serious cutting in other areas to do it, but I haven't seen anything that explicitly says it will use tax money, either.

JohnnyBGoode
03-14-2009, 07:53 PM
But able, where do you think the CIB/City/State is going to get the money if not from the taxpayers? It has to come from somewhere, right?

Do you mean it doesn't grow on trees?

IndyHoosier
03-14-2009, 08:11 PM
This is a bit old (07-08) but it explains alot.

http://nbahoopsonline.com/Articles/2007-08/NBArevinuesharing.html

Wealth, it’s the thing which makes the world go round. Since the dawn of time humans have searched for ways to get wealth and keep wealth. Humans have traded, bartered, plundered and killed for wealth throughout history. Today we are constrained by laws and civilized society but our thirst for wealth continues. That is the problem for today’s small marker NBA teams. Especially the bottom 8, or the eight smallest market teams. They struggle to be financially secure year after year and it keeps getting harder as the salary cap continues to grow.

When the NBA began to implement its salary cap a few years ago, it may have unexpectedly stepped on a landmine. The Salary cap is determined by the overall revenue of the basketball income in the NBA. So as the league is more successful so are the teams. For the mid-market and large market teams this is great, but the smaller markets are hurt by this. The NBA salary cap is $55.63 million dollars this year, up from around 53 million in 2006-07, the minimum salary is roughly 47 million dollars and the luxury tax threshold is just less than 68 million. That is a lot of money, money which many of the smaller teams are finding harder and harder to come by.

The Bottom eight teams: Memphis, Charlotte, Portland, Minnesota(Minneapolis), Indiana(Indianapolis), Utah(Salt Lake City), Milwaukee, and New Orleans, all play in cities with around 1 million people and which do not garner a lot of media attention. Their local TV deals pale in comparison to the local TV deals which the larger markets get. The Average local TV deal for an NBA team is around 12 million dollars, but of all the small markets only New Orleans and Utah received that much or more from their local television market.

Income varies from team to team, but many sources claim that the average NBA team makes $100 million dollars annually, with the Lakers and Knicks bringing in close to $150 million annually. All the small markets, except for Utah who made the playoffs and eventually the conference finals, brought in less than 85 million dollars. Subtracting the two mega-franchises(Knicks and Lakers) the average NBA gate income was around $750,000 dollars a game or $32,250,000 a year. That $32 million may even be a little high since I also calculated the two preseason games each team plays at home. Of the $32 million a portion of that goes to the visiting team, but since everyone plays the same number of road games it tends to cancel out. The TV contracts with ABC, ESPN, and TNT bring each team 28 million for every one of the NBA teams. Merchandising also brings in close to 5 million a year and finally add in the 13 million for local TV contracts. If you’ve been following your math closely, you will see that the total here is not $100 million, its $78 Million. Here is where the differences between small and large markets begin to take effect. Large market teams get around $30-40 million dollars in corporate sponsors and advertisers. Medium markets average around $25 million, and the smaller markets $10-15 million.

The corporate sponsors’ income for the larger markets keep going up, but the same cannot be said for the smaller market. Many of the smaller markets are actually losing sponsor income. One thing which will be interesting regarding sponsor income will be what happens with the New Orleans Hornets now that they are back in New Orleans full time. The past two years they have gotten a lot of local sponsors while playing in Oklahoma City because, the people there were excited about their arrival. Now they return to a city which was nearly destroyed two years ago by hurricane Katrina. The question many have been asking about them is, will they get the needed sponsors?

Winning will help a small market team make up in the income race. As noted above Utah made substantially more than the other small markets with its playoff run to the conference finals. But here is where a catch-22 sets in. To win teams must be willing to pay the big bucks to their players. But if they are not winning they can’t get those big bucks to hand out. Thus, a continual circle of mediocrity sets in. Of the bottom 8, only Minnesota, Indiana, and Utah had multiple large contracts on their roster. Also, of the bottom 8 Utah is the only one to have made the playoffs.

There is one anomaly in this equation however, and that is the San Antonio Spurs. The Spurs are in the bottom 1/3 of the NBA when it comes to market size(currently they are the 9th smallest market), yet they are consistently one of the better teams. They’re not just a good team, they are a four-time NBA champions. But despite being a four-time NBA champion, the Spurs also suffer because of their small market status. They are not promoted anywhere as much as the far inferior Lakers or Knicks; one’s a team which struggles to make the playoffs the other has become a perennial loser in recent times. Because of this lack of attention they get, they don’t get the respect that they deserve. Having won four championships in 8 years they are not considered a dynasty but the Lakers and their three titles in the early century are; The Knicks of the early 70s,who won two titles in three years, get more accreditation as a dynasty than do the Spurs.

The NBA does not stand by as its teams sink into a cataclysm of debt. The NBA helps struggling teams out financially, but only up to five million dollars. The NBA gets that money from the TV contracts as well as the luxury tax. But with everyone except the Knicks trying desperately to avoid the luxury tax the money is coming harder to come by. The NBA has for a couple of years tried to find a way to more evenly disperse the leagues income. One suggestion was the freeze the salary cap, a suggestion which is very unpopular with the players. Another suggestion is revenue sharing, which is equally unpopular with the larger markets.

Of the most notable suggestion the one which is most likely to happen is revenue sharing, but even that idea has less than a one percent chance of happening. Teams like the Lakers, Knicks, Sixers, and Heat have to much to lose in this proposal. Revenue sharing would also reward irresponsible GM’s for their stupid mistakes. When you get right down to it, there are reasons why certain franchises continually have losing records, and poor management is almost a universal one. Take the Hawks for instance, here is a team which has been making bad decision for decades. In recent times they have made blunder and blunder in the NBA draft that they have not put an interesting product on the floor-thus they are not getting the gate recites that other teams are. Management goes both ways though, Salt Lake City is the leagues smallest market in population yet the Jazz managed to not only make money but stay competitive because their management hasn’t made the same disastrous mistakes the Hawks have.

In the long run it looks as if things will stay the same in the NBA in regards to financial decision. The bottom 8 will have to rely on their wits and some luck to stay competitive. But as long as they hire competent management and the bigger markets keep hiring irresponsible management all will work out in the end.

Taterhead
03-14-2009, 09:10 PM
Bball they are not asking for taxpayer's dollars, they are not even asking for money for that matter, they are saying, CIB run CFH, we dont want that anymore.
Since City/State owns the building that is a reasonable request as the Pacers are already pay 8 mio a year in taxes towards it.

What other landlord do you know of that pays the operating costs for their business tenants? Upkeep and operating costs are two very different things. I mean geez, who couldn't make money in a quarter million dollar building if the city let you use it for virtually nothing?

What do you think the answer would be if JC Penney told the Simons that it was just too expensive to operate the stores they rent from them and they wanted the Simons to pick up the tab?

bulldog
03-14-2009, 09:11 PM
God, how ironic would it be if they moved to Baltimore...
So what are the rules on me rooting for a team to relocate to my city? Baltimore is a passionate sports town, we could use a basketball team, it would be well supported, but I can't in good conscience root for another city to lose their team. Still, I would be geeked for a basketball team here.

Kuq_e_Zi91
03-14-2009, 09:21 PM
I'd make the trip to Baltimore as often as I could if they moved there. I don't want them to leave Indy because Indiana Pacers basketball is all I've ever known growing up, but if they do move then I hope it's Baltimore. What are the chances? Better than winning the lottery?

speakout4
03-14-2009, 09:32 PM
Interestingly, it appears that some of the members who are most adamant that the city doesn't pick up the tab for the pacers don't even reside locally so moving the team would not be as significant to them.

Taterhead
03-14-2009, 09:42 PM
Um, of course it's the deal.

1) You run one business.

2) You run a 2nd business

3) Business 2 is losing money and you feed money from biz 1 to keep it going.

4) The contract runs out on biz 2 and you have the chance to stop running it.

Do you keep running it or get out?

As Able has pointed out in several places, you have the team part and the arena part. The Pacers are simply saying "um, you go ahead and run it, we don't want to be in that business anymore because it costs us money".


If the CFH situation was a money maker do you really think the Simons would want out of the deal? Common sense people. I'm sure they'd love to funnel money from the arena portion back to the team portion. It's the fact that money is going the other way that has them interested in changing terms.


I'm pretty sure that Simons' HQ next to the Westin employees at least 1 or 2 people.

I'll ask you as well. Go try and rent a commercial property and ask the owner of said property if he'll pay operating costs for you. Then take note of the confused "is this guy nuts or what" look you receive in return. Or better yet, ask the Simons. Do you think they pay operating costs for any of their tenants?

Losses are losses. If the Pacers are losing money and the city takes over the Fieldhouse then those losses are just being pushed on to the city. I think it's funny that people actually believe that is fair or even feasable considering the problems Lucas Oil has already caused.

Taterhead
03-14-2009, 09:43 PM
Interestingly, it appears that some of the members who are most adamant that the city doesn't pick up the tab for the pacers don't even reside locally so moving the team would not be as significant to them.

I lived in Indianapolis for 27 of my 29 years on this earth and am moving back this summer.

speakout4
03-14-2009, 09:50 PM
[quote=Taterhead;864206]I lived in Indianapolis for 27 of my 29 years on this earth and am moving back this summer.[/quote

So are you are prepared to come back to Indy without this team because if the Simons are out of the pacer business it is very likely that the team will not be sold locally?

Who would buy a team that loses money? Who would buy a team that they could not raise prices because people are not willing to pay for tickets at even modest prices?

Unclebuck
03-14-2009, 09:51 PM
It's exactly what they are doing, CFH is costing them 15 million USD a year, with that post OFF their balance sheet the Pacers in general make a profit, so their business model aint that wrong, it's the housing cost that is.

So. how good was this deal, how much money did it cost the taxpayer of Indiana and what and who is still in debt on CFH ?

CFH cost $ 183 mio to build, coming in at a little 4% over budget due to ecenomny, financed by;

Based on the fact that last year those taxex on food and tickets were US$ 8 million, the 10th year of the opening of CFH, one can assume that a very large part of that "public" finance has been paid back by the Pacers themselves, add to that the 50% they paid of by now on the US$ 57 mio financing they had to pay for, and one can conclude that outside the maintenance and running cost very little cost are coinciding with CFH.

Indianapolis owns the building, for which a large part was paid by the Pacers and based upon taxes coming in as well, paid in full by the Pacers, yet the Pacers are also maintaining and running it to their own detrimental tune of $ 15 mio.

On top of that they were still paying for MSA:

compare that to LOS:

projected to cost $ 500 million, actual cost $ 720 mio

On top of that:



And finally WHY CIB is in trouble in reality and this has nothing to do with the Pacers asking for something they haven't got yet:

now can we focus on what is really going on instead of saying Pacers run a bad business model ? they pay off CFH and ran it, now they're tired of bearing all cost, rightly so.



Thank you, thank you , thank you

I think that proves just how much nthe city bend over backwards for the Colts and they didn't do that much for the Pacers. CIB needs to pick up the $15M tab
I am 100% behnd the Pacers, the Simons

Taterhead
03-14-2009, 10:00 PM
So are you are prepared to come back to Indy without this team because if the Simons are out of the pacer business it is very likely that the team will not be sold locally?

Who would buy a team that loses money? Who would buy a team that they could not raise prices because people are not willing to pay for tickets at even modest prices?

Actually I'm hoping they are going to go the casino route to solve the problem. The SB is coming, the CIB is in the red even moreso than the team, the taxpayers wouldn't have to pay it through taxes, entertainment for the city, etc.

I support any solution that doesn't involve tax.

BlueNGold
03-14-2009, 10:00 PM
But able, where do you think the CIB/City/State is going to get the money if not from the taxpayers? It has to come from somewhere, right?

I like this comment, but I must say that there is no longer any difference between the citizenry, private business and public institutions in the US anymore.

The Borg has arrived. The money you think you own (and pay in taxes) was never yours at all. It is and has always been the collective's money to be distributed as the collective sees fit. The collective, represented by the CIB, is not going to care what you think.

Resistance is futile, right Jean-Luc?

BlueNGold
03-14-2009, 10:05 PM
1. Lucas Oil Stadium has nothing to do with the Pacers....Just because the Colts bent the city over backwards and took advantage doesn't mean the Pacers deserve to as well.

One of the better points in this thread. Fool me once, shame on you....

speakout4
03-14-2009, 10:05 PM
I like this comment, but I must say that there is no longer any difference between the citizenry, private business and public institutions in the US anymore.

The Borg has arrived. The money you think you own (and pay in taxes) was never yours at all. It is and has always been the collective's money to be distributed as the collective sees fit. The collective, represented by the CIB, is not going to care what you think.

Resistance is futile, right Jean-Luc?

Where do you think the city/state will get the money if the team leaves? What will happen to the downtown area when no team is playing? Take a good look at cities with dead downtowns.

BlueNGold
03-14-2009, 10:21 PM
Where do you think the city/state will get the money if the team leaves? What will happen to the downtown area when no team is playing? Take a good look at cities with dead downtowns.

I fully understand your views and others who hold similar ones. Part of me feels the same way. However, as always, I care more about whether the right thing is being done...than what the outcome may be...even if the outcome is painful. It's the same way I view the game itself. I would prefer to lose playing the right way than win on a luck shot. And it's not even close.

I believe the worst thing we can do is to continue to support the NBA "business model" as it is presently constructed. It amounts to an expensive hobby for the ultra wealthy who need to keep out of the public purse. I certainly do not believe that cities should be paying for these million and billion dollar venues that are primarily visited by the wealthier people in our culture. If it's public property, I believe it should be just like a park or library where anyone can enter regardless of their socioeconomic status.

Now, if the NBA and our government entities stopped sleeping together, I would have no problem with any of it.

Bball
03-15-2009, 12:41 AM
I fully understand your views and others who hold similar ones. Part of me feels the same way. However, as always, I care more about whether the right thing is being done...than what the outcome may be...even if the outcome is painful. It's the same way I view the game itself. I would prefer to lose playing the right way than win on a luck shot. And it's not even close.

I believe the worst thing we can do is to continue to support the NBA "business model" as it is presently constructed. It amounts to an expensive hobby for the ultra wealthy who need to keep out of the public purse. I certainly do not believe that cities should be paying for these million and billion dollar venues that are primarily visited by the wealthier people in our culture. If it's public property, I believe it should be just like a park or library where anyone can enter regardless of their socioeconomic status.

Now, if the NBA and our government entities stopped sleeping together, I would have no problem with any of it.



I'm right there with you. Perhaps if tickets were free to the public I meet think differently about all of this.

And one thing I have to repeat: I'm extremely skeptical of the numbers being used in the first place. A complete and thorough (and independent) examination of the books should be the 1st step in the CIB (and other entities who will be involved) even LISTENING to the Simons' pitch any further. It should not even get this far without that and indications are that it has gotten this far without a full examination of the books.

-Bball

Bball
03-15-2009, 01:07 AM
I think the reasoning behind what Bball is saying is this:

Simons wants CIC to pay the $15m
CIC may say yes to that, but if they do they don't have $15m
Therefore, after saying yes, to foot the bill they will tax the people of Indy

So without wanting it to happen that way, the Simons are in effect asking for tax payers to cover it because CIC won't have the money on their own, and they will have to get it from taxes.

Personally, I haven't followed this closely enough to know whether the CIC can pay for it or not. I've read enough that it seems they'd have to do some serious cutting in other areas to do it, but I haven't seen anything that explicitly says it will use tax money, either.

Thanks.

That's pretty much it. The CIB is being asked to spend more when it's already finding itself on the short end of its ability to pay the debts it already has. A large part of that is they misjudged the full ramifications of a similar deal to what the Pacers now want (the Colt deal).

Money doesn't grow on trees so where will this money come from? Taxpayers.

It already comes from taxpayers even IF the CIB could make substantial cuts in other areas to cover this (as well as the existing obligation for LOS). Government doesn't make money, it is money that it gets from the citizens in the forms of fees and taxes.

As long as the Simons are asking the CIB for funds, it is taxpayer funds they are asking for. I don't know why there is any question or confusion about that.

I have a suspicion that a downtown casino is actually more deeply ingrained in local planning that many have suspected. I bet a lot of groundwork has already been laid behind closed doors. ...Probably to the point of being a 'when' question, not an 'if'. I bet it's already seen as the ultimate solution. I doubt the LOS shortfall is all that much of a surprise... maybe the quickness it happened but not that it occurred.

Will it be the current administration that plays the "I don't want to do this but it is our only option" card or will it be shuffled thru the deck a few times like the French Lick casino where everyone knew it was coming, the forces were all pointing that direction, and it was just a matter of time to soften the blow and pretend to the anti-gambling folks that every option was tried. The answer wasn't 'no', it was really 'not yet'... wink...

And FL is now a land based casino. No pretending it's a boat, making it look like a boat, or even putting water around it after the remodel began. That just opens the road a little more for a full-fledged DT casino. Of course, there's little difference in a full-fledged land based casino and the 'slot only' horse track casinos when that really means 'electronics only' and table games are merely played with a computerized dealer and human host as opposed to a human dealer.

So the precedent is set. The hurdles aren't nearly so high.

Is anyone here against a downtown casino?







-Bball

MillerTime
03-15-2009, 02:55 AM
If the Pacers are moving, where would they go? Indy is the 14th (out of 262) most populated city in the US.

Possible destination that would make sense are:
- San Diego: Can be an issue with territory rights to Clipps, Lakers, Sac and GS
- San Jose: Could have the same issue as San Diego
- San Fran: Would be nice, but the Bay area already has a team
- Jacksonville: Could be a possibility
- Baltimore: Wouldn't be a bad option

http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

Bball
03-15-2009, 03:04 AM
Don't bet on Downtown casino
Idea has resurfaced, but lawmakers shot it down 5 years ago and likely would do so again
By Richard Gootee

Once more, talk of a casino in Downtown Indianapolis has cropped up.

A casino, the thinking goes, could help the Capital Improvement Board, which runs the city's professional sports venues, get out of its financial mess.
Advertisement

The cash-hungry CIB says it's not actively pushing for a casino, but Mayor Greg Ballard a few weeks back said he'd never say never.

So how realistic is this idea?

Not very, judging by the reaction from state lawmakers.

Much of the opposition exists because of concerns over hurting other gaming destinations, including two new gaming facilities at the horse tracks in Shelbyville and Anderson.

"If a Downtown Indianapolis casino was allowed, it would further damage, and maybe fatally damage (the) French Lick (Resort Casino), and would hurt the revenues of the two tracks," said Senate Pro Tempore David Long, R-Fort Wayne. "You have to look at that."

The gambling debate in Long's own district is heating up.

Earlier this month, Fort Wayne Mayor Tom Henry said he wants a referendum to gauge residents' interest in a casino.

Long said he personally opposes gambling but wouldn't block the move in Fort Wayne if residents support it. But he pointed out that Senate Republicans and Gov. Mitch Daniels are opposed to granting new gambling licenses.

A new license, however, might not be necessary.

Detroit entrepreneur Don Barden owns two casinos in Gary and has expressed interest in consolidating those locations.

Barden, who owns four other casinos around the country, already tried a move to northeastern Indiana last year. But a bill that allowed Barden to move the license to Steuben County died in committee after local Gary leaders said they opposed losing one of the casinos.

In Indianapolis, former Mayor Bart Peterson floated the idea of a casino when the city was exploring ways to pay for Lucas Oil Stadium five years ago. But the state quickly shot it down.

Rep. Brian Bosma, R-Indianapolis, who was House speaker at the time, still opposes the idea.

"I don't believe that a Downtown casino enhances our status as a family-orientated convention destination for America," he said.


http://www.indystar.com/article/20090315/NEWS05/903150328

able
03-15-2009, 06:42 AM
I fully understand your views and others who hold similar ones. Part of me feels the same way. However, as always, I care more about whether the right thing is being done...than what the outcome may be...even if the outcome is painful. It's the same way I view the game itself. I would prefer to lose playing the right way than win on a luck shot. And it's not even close.

I believe the worst thing we can do is to continue to support the NBA "business model" as it is presently constructed. It amounts to an expensive hobby for the ultra wealthy who need to keep out of the public purse. I certainly do not believe that cities should be paying for these million and billion dollar venues that are primarily visited by the wealthier people in our culture. If it's public property, I believe it should be just like a park or library where anyone can enter regardless of their socioeconomic status.

Now, if the NBA and our government entities stopped sleeping together, I would have no problem with any of it.


So in your quest to do the "right" thing you are also going to be a front runner to get the Colts out of town, or at least the deal they have returned to a deal that would fit the description of "right"?

able
03-15-2009, 06:43 AM
I'm right there with you. Perhaps if tickets were free to the public I meet think differently about all of this.

And one thing I have to repeat: I'm extremely skeptical of the numbers being used in the first place. A complete and thorough (and independent) examination of the books should be the 1st step in the CIB (and other entities who will be involved) even LISTENING to the Simons' pitch any further. It should not even get this far without that and indications are that it has gotten this far without a full examination of the books.

-Bball

It is very simply; IF those "losses" on CFH are less then what they claim, or non existant, then the CIB has nothing to fear, they need less money or even make money out of it, so what's the problem and why do you want the external accountants to make more money? vested intrest somewhere?

able
03-15-2009, 06:56 AM
A few notes:

1: on renters and paying the cost; Pacers paid for the bulidiung, city owns it; Pacers pay taxes on all they do in it, to the tune of 8 million a year.
The added cost of maintenance, insurance, running it in general (staff), comes to 15 million, so in short the Pacers are "saving" the CIB all that cost, and therefore sponsorng the CIB 23 million a year.
The Colts on the other hand do not pay taxes on their tickets and do not run/maintain the building, the latter to a cost of 27.4 million in hte first year of operating.
The Colts also get a part of the INCOME of anything else that goes on in the buliding, whether the CIB profits from it or not. This number is (until now) undisclosed.

In short: Pacers are paying for the Colts to play in LOS.

As for the JCPenny example: Let's say JCP has the Pacers deal, and a new shop is build next door for Macey's and get's the "Colts" deal, in other words, no need to pay for the build (JCP paid it all) and no need to pay anything else (JCP will pay like hte Pacers) in exchange the landlord only takes a part of your earnings on game day (they got in total income 7 million in the first year I read somewhere, which includes concessions taxes). I am pretty sure JCP would pack up and leave.

3: IF they leave
The CIB faces an even bigger deficit. the 15 million will still fall on them, and on top of that they miss the 8 mio paid by the Pacers, they also have less revenue of concessions, restaurants, hotels etc in taxes and a considerable number of businesses related to the pacers will have to close down.

Even it they exploit the building themselves the cost for the 15 mio will not change, it will increase. while they still have to make 8 million NET to cover for the loss of the Pacers.

4: As for taxes being the only income a "state" or "city" has; sorry to disagree here, I can name numerous business ventures city and states run across the globe some with and some without success and whether they are "setup" with tax money or not, does not make the later income "tax" nor does it come out of the taxpayer's pocket.

It is a political movement to immediately shout "no more taxes" and "keep your hand of my money" but in this case it has nothing to do with what is going on, a restructered agreement.
If you feel that strongly then move to Morgan county and never buy anything Colts related.

Putnam
03-15-2009, 08:13 AM
As long as the Simons are asking the CIB for funds, it is taxpayer funds they are asking for. I don't know why there is any question or confusion about that.

Please stop saying this. It is not true.

The Simons are not asking the CIB for funds. The Simons are asking the CIB to pay its own bills.

Hicks
03-15-2009, 09:35 AM
Personally I've not heard of state/local business ventures that you're mentioning, Abel. Do you know of any for the Indianapolis/Indiana area?

If not, what's an example from someplace else? Thanks.

Hicks
03-15-2009, 09:36 AM
Otherwise, I think the main point Abel and others are making here is that if you're going to tell the Pacers to **** off, you should at least not be blatantly hypocritical, and in turn tell the Colts to **** off as well. Otherwise the hypocrisy would be stifling.

Justin Tyme
03-15-2009, 09:38 AM
bottom line we will see higher ticket prices and a $40M roster that will look like the Grizzlies.


Personally, I like the young Memphis team of Gasol, Mayo, Gay, Conley, Warrick, etc.

Hicks
03-15-2009, 09:41 AM
Higher ticket prices right now would just mean a return back to what they already used to be. Prices have gone down or stayed the same the past couple of seasons, and for season ticket holders who renewed, we all just got about a 25% DISCOUNT from last year's prices.

speakout4
03-15-2009, 09:43 AM
Otherwise, I think the main point Abel and others are making here is that if you're going to tell the Pacers to **** off, you should at least not be blatantly hypocritical, and in turn tell the Colts to **** off as well. Otherwise the hypocrisy would be stifling.
I would like them to explicitly state whether they are prepared to see one or more teams leave. It's that simple.

Yes they are prepared______.
No are are not____________.

speakout4
03-15-2009, 09:51 AM
Personally, I like the young Memphis team of Gasol, Mayo, Gay, Conley, Warrick, etc.
So do I but is that an economically viable package for the Pacers in Indy?

count55
03-15-2009, 09:55 AM
Personally I've not heard of state/local business ventures that you're mentioning, Abel. Do you know of any for the Indianapolis/Indiana area?

If not, what's an example from someplace else? Thanks.

About 58% of the City's revenues come from local taxes. A little less than 20% comes from State & Federal grants & Taxes. The balance comes from other sources, incuding charges for services, licenses, interest income, penalties, fines, etc.

Taterhead
03-15-2009, 11:12 AM
Otherwise, I think the main point Abel and others are making here is that if you're going to tell the Pacers to **** off, you should at least not be blatantly hypocritical, and in turn tell the Colts to **** off as well. Otherwise the hypocrisy would be stifling.

They are not the same. The Colts stadium is going to bring tremendous influx of money into the city through larger conventions and the SB of all things. It's a smart business move. I don't mind the city picking up the tab on something like that. It was an investment, that will pay for itself in time. It's not about playing favorites. It's true the Colts success of late has helped them here, and the Pacers troubles have hurt them. But that doesn't mean it isn't fair.

Hicks
03-15-2009, 11:24 AM
The Superbowl will be a one time thing, and it will also cost money.

However, I see the point with the convention center. Still, is that worth the amount of money they're going to be paying per year for LOS for the next couple of decades or more?

idioteque
03-15-2009, 11:31 AM
Otherwise, I think the main point Abel and others are making here is that if you're going to tell the Pacers to **** off, you should at least not be blatantly hypocritical, and in turn tell the Colts to **** off as well. Otherwise the hypocrisy would be stifling.

I say this as someone who thinks the NFL as a league sucks and doesn't care that much about the Colts.

I don't necessarily see it as hypocritical. For years the Colts have worked to build a winning team full of mostly good characters, although there have been a couple of bumps in that road. For the most part, though, the Colts have turned into the Utah Jazz of the NFL. They're fun to watch, generally very good, and even though they rarely win it all they do enough every year to stay competitive and keep the fans interested. Like the Jazz, the Colts are GREAT with PR and have brought in fans who naturally may not have cared much about supporting the team.

The Pacers, on the other hand, seemed to forget for a few years that Indianapolis (like Utah) is generally a conservative place and rolled the dice with a bunch of non "milk drinkers." Well, where there's smoke, there's fire, and the whole thing backfired in spectacular fashion. Yes, I realize that the Pacers have improved their PR image vastly since then and I have and continue to support the Pacers emotionally and financially at levels I would not even think of supporting the Colts at. However, sometimes just one mistake can ruin years of work before and after the fact. The Pacers really gambled big and made what could have been a huge, tragic mistake.

Unfair, maybe. But the Colts get the support and the Pacers don't based on what many see as merit.

Taterhead
03-15-2009, 11:55 AM
The Superbowl will be a one time thing, and it will also cost money.

However, I see the point with the convention center. Still, is that worth the amount of money they're going to be paying per year for LOS for the next couple of decades or more?

The SB will cost money, but when AZ had SB 42, they reported between 400 million and 500 million dollars was generated for the local economy. I would expect roughly the same for us. So that will pay to operate LOS for around 10 years with almost all that coming from sources outside of the state. And if it's a success, it could mean another game down the road. Not likely I know, but it all depends on the event.

So yes I would think so. I am not totally sure how much money conventions bring in overall, but I am pretty confident it will be enough to at least offset the costs of running LOS and the expanded convention center.

Hicks
03-15-2009, 11:56 AM
$400 to $500 million? Wow. That's much more than I would have guessed. Where did most of that come from? Just volume/traffic of people?

Hicks
03-15-2009, 11:57 AM
How could Conseco Fieldhouse best make more money? That place is a fantastic venue. I don't understand why it wouldn't be packed with activities.

Taterhead
03-15-2009, 12:10 PM
$400 to $500 million? Wow. That's much more than I would have guessed. Where did most of that come from? Just volume/traffic of people?

Just so many rich folks running around town I guess. If I would have to guess, we will have around 100 thousand tourists in town for that week or two week period. And they gotta eat, sleep and find things to do.

Also Hicks, the ICVA estimates that the 2009 convention circuit will bring in 300 million to the city this year. So I am not sure exactly how much the expansion will boost that, but I'm sure there will be improvement. And that first number is way higher than I expected to be honest.

http://www.insideindianabusiness.com/newsitem.asp?ID=33589

But that is my point about it being a great investment. If they could put a casino in let's say Union Station, to offset these costs the revenue stream would go even higher.

Hicks
03-15-2009, 12:13 PM
I've got it: Add slot machines to the Conseco main lobby! :D

YoSoyIndy
03-15-2009, 12:14 PM
The SB will cost money, but when AZ had SB 42, they reported between 400 million and 500 million dollars was generated for the local economy. I would expect roughly the same for us. So that will pay to operate LOS for around 10 years with almost all that coming from sources outside of the state. And if it's a success, it could mean another game down the road. Not likely I know, but it all depends on the event.

So yes I would think so. I am not totally sure how much money conventions bring in overall, but I am pretty confident it will be enough to at least offset the costs of running LOS and the expanded convention center.

Your economic development argument is the same with Conseco Fieldhouse, which has several huge events every year that bring in outside dollars: Big Ten Tourney and the FFA annual meeting being two good examples.

The 400 to 500 million dollars doesn't go straight to the state or city. It goes to the market as a whole, which has plenty of non-Indiana based companies (i.e. the majority of our restaurants and hotels). Not downplaying the importance, but the majority of that money isn't going to LOS, though some of it is going to the people who help pay for it.

Bball
03-15-2009, 01:08 PM
Otherwise, I think the main point Abel and others are making here is that if you're going to tell the Pacers to **** off, you should at least not be blatantly hypocritical, and in turn tell the Colts to **** off as well. Otherwise the hypocrisy would be stifling.

No, the Colts' deal is already inked. We already know the CIB had a shortfall of several million because they allegedly misjudged the cost they were agreeing to pay.

But that's water under the bridge right now.

What's hypocritical about telling the Pacers they (CIB) can't take on more debt when they (CIB) are already not able to cover their existing obligations?

You're supposed to learn from your mistakes, not repeat them out of some misguided sense of fairness.

Bball
03-15-2009, 01:14 PM
Has someone posted the deal the Simons DO get now? I think some assumptions and possibly faulty memories are being used and it would be nice to see a refresher on what the existing deal really is.

El Pacero
03-15-2009, 01:17 PM
Here's an idea from IndianaBarrister.com posted today.

Money for Nothing, Pacers for Free
by Abdul Hakim-Shabazz
http://www.indianabarrister.com/archives/2009/03/money_for_nothing_pacers_for_free.html

When it comes to the problems surrounding the Indiana Pacers and their request the city take over $15 million in the operational expenses of Conseco Fieldhouse, I’m fully convinced that there is a workable solution to this problem.

I will admit though, when I first got the news I was ticked off. I equate it to a child telling their parent that they are in trouble and they need some fast cash to avoid disaster. The parent is angry at first, but eventually cooler heads prevail and the situation gets resolved. I think the same thing applies to the Indiana Pacers.

From what I have been able to gather, the Pacers truly are running a deficit and the city picking up the $15 million in annual costs would immensely help their bottom line. So I say the city pick up the $15 million tab, but also get a few other things in exchange. Just for starters…

All naming rights revenue.
All revenue from non-Pacer events at Conseco.
All parking revenue from Pacer and non-Pacer games.
Rent from the Pacers.
Whatever else can cover that $15 million expense.
Now the exact figures each of these would generate has yet to be determined, but somehow I think it wouldn’t be too hard to get some accurate numbers. And if my memory serves me correct, the Pacers originally asked for operational control of Conseco when it was built so they could keep a good chunk of the revenue. Well guess what, if the city takes over the costs of running the place, it also gets the revenue Conseco generates. The Pacers could also help their bottom by learning how to win a few games and then they could increase their ticket prices.

I don’t believe the city should let the Pacers just fold, they are too important a component to the downtown area. But I also don’t believe the city should just bend over and give the Pacers the lubricant. Reasonable minds can reach reasonable conclusions. The Pacers need to do a public vetting of their finances and the city needs to constantly reassure the public it is negotiating to the best of its ability. And just like that annoyed parent, you help your kids, but you make sure this never happens again.

Bball
03-15-2009, 01:19 PM
Please stop saying this. It is not true.

The Simons are not asking the CIB for funds. The Simons are asking the CIB to pay its own bills.

The Simons agreed to pay those bills as part of their agreement. Now they want a different deal that has someone else paying those bills.

I fail to see the difference you're pointing out.

I guess I could say they (Simons) want government (taxpayers) to take on additional expenses so that they (Simons) can keep more money. ...Which would only exist because taxpayer funds would have lessened the Simons' financial responsibilities.

-Bball

Hicks
03-15-2009, 01:29 PM
They also have the right to seek this new agreement as part of the 1999 agreement.

Bball
03-15-2009, 01:32 PM
I'm trying to find something a little more explicit than this (from bizjounals.com) but it's a start.

Everyone agrees most cities struggle to get the upper hand in arena negotiations. A glance at recent deals around the country confirms the notion.
...

The Indiana Pacers pay no rent at the $183 million Conseco Fieldhouse, opened in 1999. The team pays a $3.4 million fee for reserved parking but assumes no responsibility for arena maintenance, utilities and other capital costs. The Pacers keep most arena revenue, as well.

http://www.bizjournals.com/charlotte/stories/2002/07/15/story3.html

Bball
03-15-2009, 01:41 PM
They also have the right to seek this new agreement as part of the 1999 agreement.

They sure do, and the city has the right to say "no".

If the Simons want the city to assume more debt then they need to allow the city/CIB to get some more of the benefits from Conseco flowing back into the CIB's coffers. They need to give up something to get something.

As I said elsewhere, the timing is so poor right now that IMHO the best thing to do would be to come to an agreement to do this 3-5 years from now after some of the Pacers PR cleanup has had time to set in as well as things like the Tinsley deal be resolved and other contracts dealt with or expired. And of course this would be after a new CBA that one would hope the Simons would be lobbying the NBA for serious changes just as hard as they are lobbying the CIB now.

Hicks
03-15-2009, 01:43 PM
They sure do, and the city has the right to say "no".

And this will help the city in the long term by saying no?

May I also ask you if you ever spend money on things you don't need even when you could have spent that money on something more useful? A yes or no will do for now.

speakout4
03-15-2009, 01:43 PM
There is a headline that Pacers may be moving and are going to KC. The $15M is chump change. They lose that much with the rest of Tinsley's contract. The whispers may be interpreted that the Simons really want out and want to pare down their business enterprises before officially passing on Simon enterprises to their kids.

So what's the point of arguing over this amount when the $15M just is advertisement that they have been losing money over many years?

The other point is that some people have a fixed idea of what the Simons should be satisfied making or losing on this franchise. A couple of hundred million will go along way in enabling the Simon's to reshape their total business if that is what they want to do. The mall business probably has peaked and a infusion of $$ by selling the team could be their ultimate goal. IMO it going to take lots more than $15m to keep the Simons happy.

Bball
03-15-2009, 01:49 PM
And this will help the city in the long term by saying no?

May I also ask you if you ever spend money on things you don't need even when you could have spent that money on something more useful? A yes or no will do for now.


I've spent my own money in that way... yes.

I've not spent someone else's money in that way though.

-Bball

BlueNGold
03-15-2009, 02:44 PM
Otherwise, I think the main point Abel and others are making here is that if you're going to tell the Pacers to **** off, you should at least not be blatantly hypocritical, and in turn tell the Colts to **** off as well. Otherwise the hypocrisy would be stifling.

You also should not jump off the roof a second time after you broke your back the first time.

BTW, I am far more livid over the LOF deal. Words cannot describe how foolish that will look in 10 years when Peyton Manning is long gone and filling that stadium is impossible. I'm sure the Irsays will be complaining about that time for more sweetener...:rolleyes:

Anyway, I'm not sure when it became vogue for private business to be supported by public tax dollars....or when conservatives started supporting such a notion. I can understand some integration between the private and public sector, but when it's necessary to maintain the expensive hobbies of the rich and famous, I simply cannot support it. I would at least first ask them to adjust player salaries prior to taking the funds needed for sewers, police officers, teachers and schools. The salaries are the real problem you know. If they were paid realistic salaries, the business would be profitable enough to support itself. Revenue sharing would also help...but then that would be against what Stern wants to do to the league....that is, move it from small markets into global markets.

Yes, if the everyone in Indy had this view, we would be in Seattle's position about now. But if it were the consensus across the US, things would be just right IMO. Player salaries would be more reasonable. People like the Irsays would not be making their threats and pulling another midnight Baltimore to Indy move in search of more tax dollars.

Again, this issue is far bigger than keeping a professional sports franchise. It's about ethics and what I believe is the right thing to do. JMHO.

Putnam
03-15-2009, 03:02 PM
They sure do, and the city has the right to say "no".

Are you sure?


Conseco Fieldhouse is public property.

The Simons agreed back in 1999 to manage and operate the facility for a fixed period of time. But Conseco is the CIB's property, and ultimately the CIB's responsibility.


The Simons have been paying the city's bills for them for 10 years. That doesn't mean those bills have become the moral responsibility of the Simons. Conseco is still public property.

The Simons have the right to open the deal now. The CIB agreed to review in 2009 back in 1999. They can't say "No" to that.

The city can't say "No" to its ultimate responsibility to own Conseco Fieldhouse.

It can say "No" to one or more particular new proposals that the Simons may offer. But the city cannot insist on the old agreement.

If they keep saying "No" to the best tenant and partner they could hope to find, they STILL incur all the costs. That is not what the taxpayers want.

BlueNGold
03-15-2009, 03:04 PM
If a one day event like the Super Bowl brings in 400-500 million, that is a compelling argument. But if you look at it more closely, there are serious holes in it.

Who gets the money? Most of it will go to hotels and eateries that pay pretty low wages for the most part. Do the tax payers get that money back...or does it go to the fat cats who own the Conrad and employ workers for minimum wage? Seriously, who benefits? I'm certain that it makes politicians look good and hotel owners rich, but I seriously doubt that money benefits the middle class at all.

Anyway, this all assumes that 100,000 people come to Indy from out of state...and probably half that many will not find seats in the stadium. For some reason I doubt those people will spend $4000-$5000 apiece for the weekend on average. But again, even if they did, who truly is going to get the money?

idioteque
03-15-2009, 03:09 PM
There is a headline that Pacers may be moving and are going to KC. The $15M is chump change. They lose that much with the rest of Tinsley's contract. The whispers may be interpreted that the Simons really want out and want to pare down their business enterprises before officially passing on Simon enterprises to their kids.

So what's the point of arguing over this amount when the $15M just is advertisement that they have been losing money over many years?

The other point is that some people have a fixed idea of what the Simons should be satisfied making or losing on this franchise. A couple of hundred million will go along way in enabling the Simon's to reshape their total business if that is what they want to do. The mall business probably has peaked and a infusion of $$ by selling the team could be their ultimate goal. IMO it going to take lots more than $15m to keep the Simons happy.

If you're going to post stuff like this you definitely need to add links.

Bball
03-15-2009, 03:59 PM
You also should not jump off the roof a second time after you broke your back the first time.

BTW, I am far more livid over the LOF deal. Words cannot describe how foolish that will look in 10 years when Peyton Manning is long gone and filling that stadium is impossible. I'm sure the Irsays will be complaining about that time for more sweetener...:rolleyes:

Anyway, I'm not sure when it became vogue for private business to be supported by public tax dollars....or when conservatives started supporting such a notion. I can understand some integration between the private and public sector, but when it's necessary to maintain the expensive hobbies of the rich and famous, I simply cannot support it. I would at least first ask them to adjust player salaries prior to taking the funds needed for sewers, police officers, teachers and schools. The salaries are the real problem you know. If they were paid realistic salaries, the business would be profitable enough to support itself. Revenue sharing would also help...but then that would be against what Stern wants to do to the league....that is, move it from small markets into global markets.

Yes, if the everyone in Indy had this view, we would be in Seattle's position about now. But if it were the consensus across the US, things would be just right IMO. Player salaries would be more reasonable. People like the Irsays would not be making their threats and pulling another midnight Baltimore to Indy move in search of more tax dollars.

Again, this issue is far bigger than keeping a professional sports franchise. It's about ethics and what I believe is the right thing to do. JMHO.

I'm still with you on this.

Taterhead
03-15-2009, 03:59 PM
Please stop saying this. It is not true.

The Simons are not asking the CIB for funds. The Simons are asking the CIB to pay its own bills.

You tell him what he's saying isn't true and then you say that?

1) How is it the CIB's bills when the agreement calls for the Pacers to pay it? That makes it the Pacers bills. The Pacers agreed to do so. There is nothing in the agreement that says the CIB will take over the costs after 10 years. It calls for the Pacers right to renegotiate the deal. That is it. A renegotiation is not an automatic transfer of responsibility.

2) What in the world makes the CIB responsible for paying the operating costs the Pacers incur while holding events in the stadium? It's the cost of doing business. With holding events, there are costs. Plain and simple. Did the CIB even have a say in how those costs were incurred? I doubt it.

Bball
03-15-2009, 04:11 PM
You tell him what he's saying isn't true and then you say that?

1) How is it the CIB's bills when the agreement calls for the Pacers to pay it? That makes it the Pacers bills. The Pacers agreed to do so. There is nothing in the agreement that says the CIB will take over the costs after 10 years. It calls for the Pacers right to renegotiate the deal. That is it. A renegotiation is not an automatic transfer of responsibility.

2) What in the world makes the CIB responsible for paying the operating costs the Pacers incur while holding events in the stadium? It's the cost of doing business. With holding events, there are costs. Plain and simple. Did the CIB even have a say in how those costs were incurred? I doubt it.

I'd be willing to bet initially the Pacers were fine with those costs because it made asking for other things go down easier (such as revenue from non-Pacer events).

That's the fly in the ointment with the argument that the CIB has to pay 15mil whether the team is there or not. May be... but they'd also get the ability to use the arena as they see fit and keep the profits.

-Bball

Taterhead
03-15-2009, 04:18 PM
If a one day event like the Super Bowl brings in 400-500 million, that is a compelling argument. But if you look at it more closely, there are serious holes in it.

Who gets the money? Most of it will go to hotels and eateries that pay pretty low wages for the most part. Do the tax payers get that money back...or does it go to the fat cats who own the Conrad and employ workers for minimum wage? Seriously, who benefits? I'm certain that it makes politicians look good and hotel owners rich, but I seriously doubt that money benefits the middle class at all.

Anyway, this all assumes that 100,000 people come to Indy from out of state...and probably half that many will not find seats in the stadium. For some reason I doubt those people will spend $4000-$5000 apiece for the weekend on average. But again, even if they did, who truly is going to get the money?


You don't think an extra 400-500 million dollars dropped in a city like Indy during a 2 week stretch benefits the middle class at all? I don't even know what to say to that.

Pacers
03-15-2009, 05:04 PM
Do the Pacers get any money from anything dealing with the stadium, ie the Big 10 Tournament, concerts, naming rights, etc? If so, it really drills a hole into the whole "It's government property so the government should pay for it" argument.

BlueNGold
03-15-2009, 05:06 PM
You don't think an extra 400-500 million dollars dropped in a city like Indy during a 2 week stretch benefits the middle class at all? I don't even know what to say to that.

There will be some exceptions, but overall it's a transfer of wealth from central Indiana tax payers making 50-100K+ to people making a whole lot more...arranged and lobbied by people who make a whole lot more.

Connect some dots for me. I would like to know how that benefits a family living off 50-100K in the Indianapolis area. That may not be your version of middle class, but that's somewhere to start.

It probably helps waiters and waitresses downtown and in the northern burbs a little. That might count at the low end...but let's just say that's an awfully limited group for an awfully limited time period when they would be making money anyway.

It might keep a bunch of $8-$10/hr people busy cleaning tables and rooms downtown. That does not count because you know they're not seeing any of it....and 2 weeks of employment is nobody's answer.

It should help some restaurant owners downtown. I guess that qualifies for the 50K-100K crowd or higher...but I suspect the bulk of that will go to places like Schula's where the owners are already multimillionaires.

It might help some retail shops, but I suspect the mall will be where the vast majority of shopping is done by out of state people...and most of those shops are large retailers manned by a minimum wage worker.

So...while there are exceptions, the bulk will go to the wealthy who own the hotels, fine dining establishments and large retailers...not the middle class tax paying residents of central Indiana.

Bball
03-15-2009, 05:13 PM
Do the Pacers get any money from anything dealing with the stadium, ie the Big 10 Tournament, concerts, naming rights, etc? If so, it really drills a hole into the whole "It's government property so the government should pay for it" argument.


I found this at bizjournal.com with a quick Google search but haven't had time to really dig too deeply (I'm actually juggling about 3 projects right now and just checking the board on breaks). I'd like to find a more thorough review of the existing deal. I know it's out there.

The Indiana Pacers pay no rent at the $183 million Conseco Fieldhouse, opened in 1999. The team pays a $3.4 million fee for reserved parking but assumes no responsibility for arena maintenance, utilities and other capital costs. The Pacers keep most arena revenue, as well.

http://www.bizjournals.com/charlotte/stories/2002/07/15/story3.html

speakout4
03-15-2009, 05:16 PM
There will be some exceptions, but overall it's a transfer of wealth from central Indiana tax payers making 50-100K+ to people making a whole lot more...arranged and lobbied by people who make a whole lot more.

Connect some dots for me. I would like to know how that benefits a family living off 50-100K in the Indianapolis area. That may not be your version of middle class, but that's somewhere to start.

It probably helps waiters and waitresses downtown and in the northern burbs a little. That might count at the low end...but let's just say that's an awfully limited group for an awfully limited time period when they would be making money anyway.

It might keep a bunch of $8-$10/hr people busy cleaning tables and rooms downtown. That does not count because you know they're not seeing any of it....and 2 weeks of employment is nobody's answer.

It should help some restaurant owners downtown. I guess that qualifies for the 50K-100K crowd or higher...but I suspect the bulk of that will go to places like Schula's where the owners are already multimillionaires.

It might help some retail shops, but I suspect the mall will be where the vast majority of shopping is done by out of state people...and most of those shops are large retailers manned by a minimum wage worker.

So...while there are exceptions, the bulk will go to the wealthy who own the hotels, fine dining establishments and large retailers...not the middle class tax paying residents of central Indiana.
Don't you hate those exhorbitant hotel taxes and restaurant taxes and all the other sales taxes that are paid by visitors to the downtown. And that money pays the PD, FD, road repair people, city hospitals, etc. These services are not limited to one class. The city takes its cut of everything.

Bball
03-15-2009, 05:26 PM
Do the Pacers get any money from anything dealing with the stadium, ie the Big 10 Tournament, concerts, naming rights, etc? If so, it really drills a hole into the whole "It's government property so the government should pay for it" argument.

Posted by John Reid, The Times-Picayune March 14, 2009 11:31PM:

In Indianapolis, before the Pacers agreed to play at Conseco Fieldhouse in 1999, Herb and his brother, Mel, agreed to pay yearly facility operating costs of the building so they would receive profits generated from various events such as the circus, concerts and other entertainment.

http://blog.nola.com/hornetsbeat/2009/03/lease_agreement_has_indiana_pa.html

Bball
03-15-2009, 05:29 PM
Does this factor into the economic equation that has the Pacers losing money 9 of the past 10 years or does this go into another part of the books?

From ALLBUSINESS.COM

The Carmel, Ind.-based financial services company signed a 20-year, $40 million sponsorship with Pacers Basketball Corp., which owns the team and the retro-look arena scheduled to open for the 1999-2000 season.

The $2 million annual payments may increase in years 11 through 20, based on the market value of the sponsorship at that time, according to Jim Rosensteele, Conseco's senior VP of corporate communications.

http://www.allbusiness.com/services/amusement-recreation-services/4580200-1.html

Pacers
03-15-2009, 05:33 PM
Posted by John Reid, The Times-Picayune March 14, 2009 11:31PM:

In Indianapolis, before the Pacers agreed to play at Conseco Fieldhouse in 1999, Herb and his brother, Mel, agreed to pay yearly facility operating costs of the building so they would receive profits generated from various events such as the circus, concerts and other entertainment.

http://blog.nola.com/hornetsbeat/2009/03/lease_agreement_has_indiana_pa.html

Well there you go. Everyone tooting the "It's government property" horn should be on board for the city keeping all of the revenue and charging the Pacers to use the joint.

speakout4
03-15-2009, 05:45 PM
If you're going to post stuff like this you definitely need to add links.
http://www.indy.com/posts/pacers-owner-money-losses-can-t-continue

Bball
03-15-2009, 06:10 PM
From 2001 there is this talking about Memphis and using the Pacers CFH deal as a comparison:

Arena plan most lucrative in NBA

Although terms of the arena financing proposal for the Vancouver Grizzlies have not been released, negotiators say it will be the most lucrative deal for a team in the NBA.

The deal would top the one made for the Indiana Pacers to build Conseco Fieldhouse, a deal that that is seen as the most lucrative lease agreement carrying public financing, says Len Perna, managing partner of Goal Group Consulting, a management firm hired by local officials to complete a financing deal for a new home for the Grizzlies.

The Pacers paid $57 million of the facility's $183 million construction cost, but terms of the 20-year Conseco Fieldhouse lease call for team owners to pay $1 in rent a year and $3.4 million to rent parking spaces. The Pacers keep all advertising, tickets and concession revenue.

The Pacers also keep the entire $40 million in naming-rights revenue paid by Indiana-based Conseco, Inc., insurance company.

"We've offered a deal that they've yet to accept that any other team in the NBA would love to have," Perna says. "We put the deal on the table on (May 7) and nothing comes close."

Negotiations are ongoing, but there are several reasons Memphis has to make a lucrative offer to Grizzlies owner Michael Heisley if the city hopes to get the franchise, says Marty Regan, a Memphis attorney working with the NBA pursuit team.

First, the Grizzlies would play at least two years in the 20,142-seat Pyramid, limiting revenue streams until a new $200 million-$250 million arena is built. The Pyramid only has 28 luxury suites, no club seating and no other amenities like restaurants.

Another reason is that Memphis would be the smallest media market in the NBA.

"There is nothing we can do, demographically, to increase the number of listeners, viewers or the size of media to buy advertising," Regan says.

And the market for securing the franchise dictates a sweet offer because other cities like Louisville have made attractive offers, Regan says, adding that Memphis doesn't have another professional team as leverage in negotiating terms for the new arena.

The more Memphis asks the owner to contribute, the more his revenue stream in the smallest NBA market will be compromised, which could make other offers more attractive or limit the owner's ability to recruit and pay the best players so the team can be competitive, Regan says.

Perna says both parties have until May 31 to agree on arena financing, putting enormous pressure on state, county and city officials to hammer out a deal for the proposed publicly funded 18,500-seat arena, which will cost up to $250 million.

May 31 is about the time an NBA relocation committee is expected to vote on the move, and that decision hinges on assurances that a new arena can be built.

The Grizzlies are not expected to contribute to arena funding under any financial scenario, and the team is expected to keep the entire $100 million it expects to get from a naming-rights deal proposed by FedEx Corp.

Without the approved financing, the Memphis investment group, NBA Now, has little chance of persuading the NBA to move a team to Memphis. At press time, no arena financing deal was in place.

"Normally this process takes anywhere from three to six months, and we are trying to get formal documentation in three weeks," Perna says. "But we intend to do whatever it takes to make a deal happen."

Heisley did not return calls for comment.

As Memphis city leaders rush to arrange arena financing, frustration is replacing elation for the Memphis investment group.

"We are writing the book on the relocation, and it's a frightening book," says Doug Carpenter, a principal of Carpenter & Sullivan, a marketing firm retained by the pursuit team that is working to bring the Grizzlies to Memphis. "Ultimately, we will be successful, but there is frustration."

The biggest issue for the investment group is time.

Memphis Business Journal - by John Lombardo and Terry Hollahan
http://sacramento.bizjournals.com/memphis/stories/2001/05/21/story3.html

Bball
03-15-2009, 06:18 PM
From IBJ The Score-
http://thescore.ibj.com/content/?cat=3

NBA: Apocalypse now

I’m not a sky-is-falling kind of guy by nature. But I think there’s a seismic shift underway in the NBA. The Indiana Pacers’ financial distress is just the tip of the iceberg.

I’m not sure many team owners or general managers see the size of the tsunami about to besiege them. Commissioner David Stern is a very smart guy, but I’m sure the leaders of Rome were equally intelligent when they took their historic tumble.

Sports radio host Dan Dakich suggested to me yesterday that surely the Indiana Pacers can’t go away. I beg to differ, and it’s time we all start acting like the possibility is real.

The signs are definitely there—and they spread way beyond Indianapolis. Twenty seven of the league’s 30 teams either plan to freeze of lower ticket prices next season. We’re not talking about the dregs of the league here. Among the teams seriously considering freezing or dropping ticket prices are Boston, Cleveland, San Antonio and Chicago. And Yes, the Pacers. Attendance and sponsorship is down league-wide. Several teams are considering 10 percent to 15 percent across-the-board budget cuts.

Since the players’ salary cap is figured on league revenue, it’s only a matter of time before the cap comes down. It’s probably time for NBA owners to consider a harder cap. There’s only one thing the players’ union fears more than that. Contraction. It’s laughable to think there are other markets waiting with open arms and sweeter deals for beleagured teams. We all see how that is working out in Oklahoma.

Sooner or later, one city somewhere will cease the massive give-aways to its NBA team—not because they want to, but simply because economically, they have to. And then the dominos will begin to fall—at a torrid pace.

Will it be New Orleans? Oklahoma? Gasp, Indianapolis? Never say never. Especially in this climate. And when the players’ union realizes this reality, they should be willing to talk turkey with owners. And owners should be willing to get serious about revenue sharing and a sustainable business model.

Even when the economy rebounds, the golden age of NBA players’ salary will be over. We’re headed toward a time when a professional athlete can make a good living—a very good living. But the days of mad money, the days of NBA players knocking down $15 million a year or more—will soon be over.

Think I’m crazy? We won’t have to wait long to find out. At the outset of this season, all we heard about was the wild 2010 free agency frenzy about to unfold. The storyline was that teams will be fighting over the likes of LeBron James, Amare Stoudemire, Chris Bosh and a few other prized players due to hit the free agency market. Teams were clearing salary cap space to prepare. Heck, I even thought Larry Bird might take that opportunity to upgrade the Pacers.

Word out of New York was that Knicks General Manager Donnie Walsh (of previous Pacers fame) would offer LeBron the league’s largest contract. And maybe, just maybe, in New York they could actually afford that kind of deal. But at what cost to the rest of the league. At what cost to a team like the Indiana Pacers. Ironic to think, a loyal guy like Donnie Walsh could stick the last dagger in his former team.

-

Pacers have explaining to do

Slowly but surely, Indiana Pacers officials are releasing more information about their financial distress. Last month, Pacers brass told me they had lost money in nine of 10 years at Conseco Fieldhouse, including the inaugural season and despite a run to the NBA Finals. But they wouldn’t tell me the extent of those losses.

Yesterday, Capital Improvement Board member Pat Early said the loss this year is set to be $30 million. That’s more than triple any published estimates. Fans I talk to are split over the idea of the city and/or state raising tax revenue to help operate Conseco Fieldhouse. Many love and want to see the tradition of the Pacers continue in Indianapolis. They also appreciate all that co-owners Herb and Mel Simon have done for the community.

As for the $15 million annually Pacers officials want to operate Conseco Fieldhouse … Well, not all fans have shut the door on the idea. But most I’ve talked to that are willing to consider the idea want two things. First, they want year-by-year information about the extent of the Pacers’ financial losses. Those fans want to see to what extent the Pacers’ wounds have been self inflicted. In simple terms, fans want to see how much the Pacers were losing before the Detroit brawl and other off-court incidents, and how much the team lost after those events.

It’s fair to point out that the Pacers-like the rest of the NBA-are struggling through an epic economic slump, which obviously is far from the team’s control. NBA officials said 27 of 30 NBA teams will either freeze or lower ticket prices next season, and many are looking to trim their budgets. Some will make cuts as deep as 10 percent to 15 percent.

Secondly, the fans I have talked to want Pacers officials to stand up before the CIB, City-County Council and/or the state Legislature and make their request and plead their case. Pacers officials have not spoken at a CIB meeting since this issue erupted early this year.

Before I joined the IBJ in 1998, I covered politics for a decade. During that time, I found what taxpayers wanted most was a thorough debate of the issues. Not scripted dialogue, but honest debate by the people asking for money or relief and the elected officials (or their appointees) who have the power to grant it. Even though not everyone agreed with the outcome, most were willing to accept it as part of the process.

-

Midcoasted
03-15-2009, 07:00 PM
Can anyone please explain to me how they are loosing 30 million a year? They keep all the revenue from all events at Conseco. How can that spell a 30 million dollar loss? Or is it a 30 million dollar loss because the revenue from those events goes into another book? Loosing money 9 out of 10 year?:bs: It has to be, there is just no way. They are making money they are just keeping the books a certain way that shows them loosing money. The Simons are really really rich. The Pacers have the best deal in the league. How could another city actually afford to top what we have given them?

More and more this seems like a greedy man trying to take us for a ride while using fear to get what he wants. I think the city should just take control of them team like Baltimore wanted to do with the Colts.

Putnam
03-15-2009, 07:07 PM
The SB will cost money, but when AZ had SB 42, they reported between 400 million and 500 million dollars was generated for the local economy. I would expect roughly the same for us. So that will pay to operate LOS for around 10 years with almost all that coming from sources outside of the state. And if it's a success, it could mean another game down the road. Not likely I know, but it all depends on the event.

So yes I would think so. I am not totally sure how much money conventions bring in overall, but I am pretty confident it will be enough to at least offset the costs of running LOS and the expanded convention center.

That estimate of the Super Bowl boost is much too high. The estimates I have (from PriceWaterhouseCoopers) say betweem $130 million and $280 million. But even it it were as high as you say, the stadium cost a lot more than $400 million, didn't it. That Super Bowl WON'T pay the cost of the stadium or anything like it.

And Lucas Oil Stadium is NOT going to bring in a lot more convention business. The expanded convention business will occur at the expanded Indiana Convention Center at the old site of the RCA Dome. The expanded convention potential would have been the same without any football stadium at all.

Pro sports facilities do not pay for themselves. Conseco won't, and Lucas Oil won't, either. The only rational justification for having a stadium or arena is if people of a community like the teams and are willing to see their tax dollar spent that way instead of some other way.

BlueNGold
03-15-2009, 07:14 PM
Don't you hate those exhorbitant hotel taxes and restaurant taxes and all the other sales taxes that are paid by visitors to the downtown. And that money pays the PD, FD, road repair people, city hospitals, etc. These services are not limited to one class. The city takes its cut of everything.

So, the justification for funding a private business with tax dollars is that some out-of-state money flows into the state coffers because of the existence of the business? I wonder if Eli Lilly or Wellpoint want in on that deal. To be sure, they bring a ton of well-to-do out of state people every week of the year...and have done so for decades filling our hotels. What happens to the tax base when all private companies use these justifications to have their operating costs covered by the government?

Well, the Colts and Pacers don't have to worry about that. Most private businesses don't have the same power and connections and don't run the type of businesses politicians like to beat their chest for.

BlueNGold
03-15-2009, 07:27 PM
That estimate of the Super Bowl boost is much too high. The estimates I have (from PriceWaterhouseCoopers) say betweem $130 million and $280 million.

Indy being a low cost area of the country...would of course be at the low end of that estimate.

Edit: Sales and Use Tax on 130M is 9.1M to the state....less than what we owe Jamaal Tinsley who doesn't even play.....lol.

speakout4
03-15-2009, 07:41 PM
So, the justification for funding a private business with tax dollars is that some out-of-state money flows into the state coffers because of the existence of the business? I wonder if Eli Lilly or Wellpoint want in on that deal. To be sure, they bring a ton of well-to-do out of state people every week of the year...and have done so for decades filling our hotels. What happens to the tax base when all private companies use these justifications to have their operating costs covered by the government?

Well, the Colts and Pacers don't have to worry about that. Most private businesses don't have the same power and connections and don't run the type of businesses politicians like to beat their chest for.
A lot of our money does come from conventions that are advertised by what the city has to offer. The city offers sports (speedway,colts,pacers) and all are attractive to varying degrees. Which tourists come to Indy to see Lilly buildings? The teams are the draw that says this city is worth visiting. Lose the Pacers, colts, and racing and we are no more a draw than Hoboken and we become what we were before we had the colts and an nba team-naptown.
I guess the question is whether the teams make us better off economically or not. If they don't they are on their own and if they do then we make an investment in them in order to get a better return.

What you and bball don't seem to get is that regardless of whether it is fair or unfair the teams need to make a certain profit and if they can't make that profit they can go somewhere else. It doesn't matter whether their lack of profit is their own fault. Somewhere else they are offering more. Would Lilly stay here if they didn't make a profit? Complicating the problem is that the Pacers may be at an inherent disadvantage vis a vis big market venues and so if we really want this team for our economic well being then we have to pony up more than other municipalities have to. Are these payments to the team in the self-interest of the city or the self interest of fans? Cities that lose big time sports teams always try to get a team back. Bball wants to tell the pacers they are making enough or should pay more of their own expenses. The pacers can tell bball to read about the team in the papers because they are gone. New city, new stadium, new lease, fans hungry for sports=bigger profits.

Bball
03-15-2009, 08:19 PM
Bball wants the Simons to open their books before the discussion goes any further. I see a lot of posturing here and I don't believe this is being debated honestly so that the taxpayers have a truly clear picture of what is going on.

In a perfect world, the Pacers HAVE to be told "no" and it shouldn't even be a question. It is a moral issue for me as well as an economic issue. Failing business models need to be allowed to fail or fix their own mess.

But things have gotten so out of whack that even with arguably the best deal in the NBA the Pacers still want more and claim they can't make a profit. Once again, in a perfect world this wouldn't be the taxpayers' problem... it would be the NBA and Simons' problem. And as such, I have no doubt it would be fixed. But these sweetheart deals offered on the backs of taxpayers take the free market out of the equation.

Also, in a perfect world it should be almost impossible to move a team. Teams in motion are not good for the NBA. That so many teams are struggling is not the fault of the city they are located in. It's not "small" markets that are struggling... it's simply that only HUGE markets can survive (apparently). The NBA business model is critically flawed. I do not want taxpayers bailing out that flawed model. They must fix their own mess and part of me thinks there is another city waiting to welcome the Pacers and part of me wonders exactly where are they going to get a better deal than here already?

Wherever they'd go, once the honeymoon is over, then what? A team with no history and a track record of questionable player contracts and abysmal marketing is suddenly going to turn that around in a new city? If anything, the new city's deal and the honeymoon period would have them (TPTB) sitting fat and happy again and doing things as they've always done... until the fans started turning their backs once the new wore off. Then what? Threaten to move again if they don't get some more corporate welfare?

It's time for ALL cities and states to say "no". The gravy train has come to an end. Taxpayers cannot afford these burdens while other infrastructure goes to waste.

This isn't about the Pacers, this is about out of control government spending being reined in for me.

BlueNGold
03-15-2009, 08:29 PM
A lot of our money does come from conventions that are advertised by what the city has to offer. The city offers sports (speedway,colts,pacers) and all are attractive to varying degrees. Which tourists come to Indy to see Lilly buildings? The teams are the draw that says this city is worth visiting. Lose the Pacers, colts, and racing and we are no more a draw than Hoboken and we become what we were before we had the colts and an nba team-naptown.
I guess the question is whether the teams make us better off economically or not. If they don't they are on their own and if they do then we make an investment in them in order to get a better return.

What you and bball don't seem to get is that regardless of whether it is fair or unfair the teams need to make a certain profit and if they can't make that profit they can go somewhere else. It doesn't matter whether their lack of profit is their own fault. Somewhere else they are offering more. Would Lilly stay here if they didn't make a profit? Complicating the problem is that the Pacers may be at an inherent disadvantage vis a vis big market venues and so if we really want this team for our economic well being then we have to pony up more than other municipalities have to. Are these payments to the team in the self-interest of the city or the self interest of fans? Cities that lose big time sports teams always try to get a team back. Bball wants to tell the pacers they are making enough or should pay more of their own expenses. The pacers can tell bball to read about the team in the papers because they are gone. New city, new stadium, new lease, fans hungry for sports=bigger profits.

Yes, the Pacers and the Colts add to the city's reputation. They probably have some impact on convention traffic...how much is unclear. I think conventions come based on the amount of space available, the quality of the facility, safety, shopping and the layout of the downtown area. They like Indy because people can easily walk to everything, it's a pretty low cost area and it's relatively safe.

I think we all understand the potential results of such a view. Seattle is out one NBA team because they came to the same conclusion. Whether you want to call their move stupid and shortsighted or equitable and honorable...it will depend on your view. Nuffsaid.

BTW, you make a good point about a smaller market team needing to "give" a little more to have a professional franchise. I consider that a shame (that I also refuse to bend over for), but it is the reality. That's also why I think revenue sharing is the way the league should be run.....or every city should keep their Mayflower trucks warmed up and ready to go...because there is always another politician in a city not so far away ready to give away tax dollars.

idioteque
03-15-2009, 09:01 PM
I think the city should just take control of them team like Baltimore wanted to do with the Colts.

That worked out real well for Baltimore, didn't it?

The situation with the public owning the Green Bay Packers is an absolute aberration that no one should put any stock in, because it can't and won't happen again.

Two things can happen here. Most likely, like every other city, Indianapolis will bend down and give the Pacers their money. Or, we could be like Seattle, and realize that the situation and precedent is flawed, and tell the Simons to **** off. That of course, would be at the expense of our team. Unless something crazy happens those are your two choices. Cities NEED to stand up to these franchises and tell them that they're not going to support something that is unprofitable and is in many instances viewed as an expensive hobby, but that hasn't happened yet and even if it did I am unsure of how that would actually change anything.

YoSoyIndy
03-15-2009, 09:14 PM
Can anyone please explain to me how they are loosing 30 million a year? They keep all the revenue from all events at Conseco. How can that spell a 30 million dollar loss? Or is it a 30 million dollar loss because the revenue from those events goes into another book? Loosing money 9 out of 10 year?:bs: It has to be, there is just no way. They are making money they are just keeping the books a certain way that shows them loosing money. The Simons are really really rich. The Pacers have the best deal in the league. How could another city actually afford to top what we have given them?

More and more this seems like a greedy man trying to take us for a ride while using fear to get what he wants. I think the city should just take control of them team like Baltimore wanted to do with the Colts.

They don't keep all of the revenue from the shows. First and foremost, the money goes to the acts themselves. The remaining dollars -- the few that are remaining -- are cut between CIB and the Pacers (or the Colts for LOS).

I'd heavily suggest reading some of the articles fellow PD'ers have posted.

YoSoyIndy
03-15-2009, 09:19 PM
Bball wants the Simons to open their books before the discussion goes any further. I see a lot of posturing here and I don't believe this is being debated honestly so that the taxpayers have a truly clear picture of what is going on.

In a perfect world, the Pacers HAVE to be told "no" and it shouldn't even be a question. It is a moral issue for me as well as an economic issue. Failing business models need to be allowed to fail or fix their own mess.

But things have gotten so out of whack that even with arguably the best deal in the NBA the Pacers still want more and claim they can't make a profit. Once again, in a perfect world this wouldn't be the taxpayers' problem... it would be the NBA and Simons' problem. And as such, I have no doubt it would be fixed. But these sweetheart deals offered on the backs of taxpayers take the free market out of the equation.

Also, in a perfect world it should be almost impossible to move a team. Teams in motion are not good for the NBA. That so many teams are struggling is not the fault of the city they are located in. It's not "small" markets that are struggling... it's simply that only HUGE markets can survive (apparently). The NBA business model is critically flawed. I do not want taxpayers bailing out that flawed model. They must fix their own mess and part of me thinks there is another city waiting to welcome the Pacers and part of me wonders exactly where are they going to get a better deal than here already?

Wherever they'd go, once the honeymoon is over, then what? A team with no history and a track record of questionable player contracts and abysmal marketing is suddenly going to turn that around in a new city? If anything, the new city's deal and the honeymoon period would have them (TPTB) sitting fat and happy again and doing things as they've always done... until the fans started turning their backs once the new wore off. Then what? Threaten to move again if they don't get some more corporate welfare?

It's time for ALL cities and states to say "no". The gravy train has come to an end. Taxpayers cannot afford these burdens while other infrastructure goes to waste.

This isn't about the Pacers, this is about out of control government spending being reined in for me.

I'd love to see the books, but I don't understand why it's necessary they show them in order to negotiate. They have a contracted right to negotiate agreed upon by boths parties when the original contracted was executed.

I think my favorite part about this whole thing was summed up by Tully in the Star -- he spent the whole article complaining about the Pacers and how they should function as is, but then went on to say that the Colts should re-negotiate if they "had any loyalty to the city". Which one is it? Should they run like a private business or run like a community-owned one? Because when things go bad like the Pacers, everyone argues the former -- yet when things go great like the Colts, everyone wants the money back based on civic duty.

It gets old.

Taterhead
03-15-2009, 11:10 PM
That estimate of the Super Bowl boost is much too high. The estimates I have (from PriceWaterhouseCoopers) say betweem $130 million and $280 million. But even it it were as high as you say, the stadium cost a lot more than $400 million, didn't it. That Super Bowl WON'T pay the cost of the stadium or anything like it.

And Lucas Oil Stadium is NOT going to bring in a lot more convention business. The expanded convention business will occur at the expanded Indiana Convention Center at the old site of the RCA Dome. The expanded convention potential would have been the same without any football stadium at all.

Pro sports facilities do not pay for themselves. Conseco won't, and Lucas Oil won't, either. The only rational justification for having a stadium or arena is if people of a community like the teams and are willing to see their tax dollar spent that way instead of some other way.

I'm just repeating numbers I heard on the local news here at the time. And I know your estimate is low. The gate for the SB was almost 60 million dollars by itself. I would say your estimate probably factors in the revenue after expenses and mine doesn't. But the expenses in putting on the event also benefit the economy, thus should still be counted as generated revenue, JMO.

I never said it would pay for the cost of the stadium, even though it will in LOS' case before it is all said and done. I said just the additional revenue from the expansion of the convention center plus the SB would likely offset the operating costs. And yes, the convention center expansion is a part of that deal because it wouldn't have been possible without removing the RCA Dome.

I am talking about the overall deal from the cities perspective not just the stadiums. LOS will host a SB, Final Fours, allow for the convention center expansion. The Fieldhouse hosts the Pacers, Fever and a few concerts, Big Ten Tourney, etc. A few very good events no doubt, but no comparison in sheer size.

Another thing I would like to see is how much the Fever make or lose and what that affect is on the number.

Taterhead
03-15-2009, 11:16 PM
There will be some exceptions, but overall it's a transfer of wealth from central Indiana tax payers making 50-100K+ to people making a whole lot more...arranged and lobbied by people who make a whole lot more.

Connect some dots for me. I would like to know how that benefits a family living off 50-100K in the Indianapolis area. That may not be your version of middle class, but that's somewhere to start.

It probably helps waiters and waitresses downtown and in the northern burbs a little. That might count at the low end...but let's just say that's an awfully limited group for an awfully limited time period when they would be making money anyway.

It might keep a bunch of $8-$10/hr people busy cleaning tables and rooms downtown. That does not count because you know they're not seeing any of it....and 2 weeks of employment is nobody's answer.

It should help some restaurant owners downtown. I guess that qualifies for the 50K-100K crowd or higher...but I suspect the bulk of that will go to places like Schula's where the owners are already multimillionaires.

It might help some retail shops, but I suspect the mall will be where the vast majority of shopping is done by out of state people...and most of those shops are large retailers manned by a minimum wage worker.

So...while there are exceptions, the bulk will go to the wealthy who own the hotels, fine dining establishments and large retailers...not the middle class tax paying residents of central Indiana.

Because they money continues to flow through the economy. It doesn't just stop with the people who earn it initially.

When you earn your paycheck, you in turn spend it. You might by a car, groceries, a jet ski, whatever. Your income in turn becomes a part of another persons' income and so on. It's a ton of money that circulates throughout the economy that wasn't there before.

Sure most of it goes to the upper and lower ends of the economy. But those are the people that pay the middle class' salaries by buying what they are selling. The more money they have to spend, the more they buy. Plain and simple.


Indy being a low cost area of the country...would of course be at the low end of that estimate.

Edit: Sales and Use Tax on 130M is 9.1M to the state....less than what we owe Jamaal Tinsley who doesn't even play.....lol.

That money doesn't just get taxed once. When you earn your paycheck at the end of the week, you then in turn spend it. Whatever you spend it on become someone elses' salary which is also taxed. And so on and so on.

It's way too simplistic to think it's just a one time tax. Even if all of it eventually leaves the state, the taxes it generated stay in terms of roads built, state employees salaries paid and school improvements.

Roaming Gnome
03-15-2009, 11:18 PM
Threads: Indiana Pacers future in jeopardy from financial losses [ESPN] & Article in Defense of the Simons have been merged together.

Sorry for any inconvenience this may have caused...

-RG

Bball
03-16-2009, 03:12 AM
Here is an article from the IBJ last year (It's from January of 08 so it's a little over a year old). You can see how this has escalated to where we are now.


What’s Pacers’ next play?
Team falls into last place in NBA home attendance; league wants ‘ship righted’
Sat. January 26 - 2008
Anthony Schoettle - aschoettle@ibj.com

The Indiana Pacers have hit rock bottom.

This month, the team slipped into last place in average home attendance among the 30 National Basketball Association teams, falling behind the New Orleans Hornets, a team that is selling tickets in an area still ravaged by Hurricane Katrina.

The Pacers’ average home attendance through 19 games is 12,068. New Orleans is averaging 12,159 through 21 home dates.

The attendance slump and two consecutive years of financial losses have stirred speculation the franchise will ask for city assistance.

The situation is so bad, said league insiders, NBA Commissioner David Stern is keeping an eye on it.

“It’s one of a handful of clubs the NBA is concerned about,” said Marc Ganis, president of Chicago-based Sportscorp Ltd., a firm that works with several NBA teams on business operations. “This is something no one foresaw three or four years ago.”

Scott O’Neil, NBA senior vice president for team marketing and business operations, said, “We’re putting a little extra time into the Pacers at this point.”

NBA account managers have come to Indianapolis to help with marketing, branding and sales, O’Neil said.

“This is not a five-alarm fire,” he said. “Our mind-set is, let’s get the ship righted.”

If the Pacers’ attendance doesn’t improve, this could be the worst year since 1990-1991, when the team averaged 11,592 per home game at Market Square Arena. The franchise hasn’t slid below 12,000 since then and only dipped below 15,500 once since 1994-1995. That was last year, when average attendance for the 41 home games was 15,359.

“This type of attendance drop does surprise me,” said Mark Rosentraub, former dean at IUPUI and author of “Major League Losers,” a book about professional sports operations. Rosentraub said teams that experience such dramatic attendance declines need to survey their fan base and take action based on the results.

One aspect that is troubling to Rosentraub is that the team’s spot in the standings doesn’t mirror their attendance rank.

“This is a team that is still in the hunt for a playoff spot,” he said. “It makes you wonder.”

A string of off-court escapades and courtroom appearances by players hasn’t helped, sports marketers said.

Forbes Magazine reported the Pacers lost $12.5 million during the 2005-2006 season and another $1.3 million last year. The team has stemmed the bleeding by cutting its player payroll from $79 million during the 2005-2006 season to $67 million last year, according to Forbes.

It isn’t all bad news for the Pacers.

The team’s merchandise sales are in the top half of the NBA, Pacers officials say. Corporate support continues to be strong, with all but a couple of Conseco Fieldhouse suites leased, and almost 200 corporate partners on the books, said Jim Morris, special assistant to Pacers CEO Donnie Walsh.

Concert business at the Pacers-run Fieldhouse also is growing, after the organization hired a Los Angeles-based booking agency. Eleven of 17 concerts hosted during 2007 were booked during the fourth quarter, and Morris said 2008 is off to a strong start (see story, page 15).

But Pacers home attendance is a crippling financial factor. Sports business experts said a decline of the magnitude the Pacers are experiencing this year could cost the team $7 million to $9 million in ticket revenue alone. Lost parking, concession and other ancillary revenue that results from fewer fans’ attending games could easily put the loss in the eight-figure range.

The situation has some wondering if Pacers officials will approach the city to seek financial assistance. New Mayor Greg Ballard said he met with team officials and has been apprised of the situation.

He said he will meet with Pacers coowner Herb Simon within a week or so, but Ballard called that a “get-to-know-you” kind of meeting.

Officials within former Mayor Bart Peterson’s administration also said the Pacers talked to them about their financial straits.

Pacers and city officials said there have been no discussions of sweetening the lease deal for Conseco Fieldhouse. It’s already pretty sweet, with the Pacers handling all the events and taking in all the revenue from the 18,345-seat facility, which opened for the 1999-2000 season. The team’s annual lease payment is $1.

City officials haven’t completely closed the door on the idea of helping the Pacers financially. There are provisions in the Fieldhouse lease that would allow the city to subsidize the Pacers to help make up financial losses.

“This relationship has to be a win-win for the Pacers and the community, and you always look for ways to make that happen,” said Pat Early, a longtime member of the Capital Improvement Board, the city government agency that owns Conseco Fieldhouse.

Early stopped short of saying he’d support subsidizing the Pacers, something the city did before the franchise moved to the Fieldhouse.

“Obviously, the solution is not to build another arena, and a subsidy would be difficult,” he said. “But if we can sit down and get the right people in the room, we can get creative.”

Pacers officials said they have neither asked to renegotiate the team’s Fieldhouse lease nor put their hands out for a subsidy. Team owners Herb and Mel Simon did not reply to requests for an interview.

“Herb and Mel have not asked for anything,” said the Pacers’ Morris. “They’ve never even raised the issue of the lease deal with the city.”

Morris called on city officials and the community to rally around the team.

“We’re really working hard to put a good product on the floor,” he said. “Herb and Mel Simon got into this business for the community, and they want this to be something this city can be proud of.”

The Pacers have to hope the off-the-court incidents that have marred the team’s reputation in recent years don’t have a lasting effect that supersedes whatever success the team can find in the win-loss column, sports marketers said.

“Winning usually cures all ills,” Ganis said. “But this market—maybe more than most—seems to want a team with character.”

With the Colts’ season over, sports marketers said the time is now for the team to make its push for fan support.

“They’ve weathered the storm, and I expect things to pick up,” said Larry DeGaris, director of academic sports marketing programs at the University of Indianapolis. “But they better have a good plan.”

http://cms.ibj.com/ASPXPages/6iframes/FrontEndArticlesDetailPage.aspx?ArticleID=10342&NoFrame=1

------------------------------------------------

I will venture forth a theory on why attendance declined even though "“This [was] a team that [was] still in the hunt for a playoff spot,” he said. “It makes you wonder.”

The East was pitiful for the 2nd half of the available playoff spots last year. Nobody thought a team backing in to the bottom rung of the playoff bracket was going to do anything but lose. I don't think casual fans or many fans overall consider just making the playoffs to be the Holy Grail. And some people even see that as being more of a setback than a sign of improvement.

I'm not surprised being marginally in THAT playoff hunt (which is much the same as this year) would not inspire much community support.

Basketball fans in Indiana are still knowledgeable about the game and the NBA. Maybe not as much as they once were but they still know when they see a team on the rise and a team simply hoping that some bad teams in front of them fall back to them.

We just need to continue the rebuild and not worry about the playoffs. It's a shame this other distraction (Pacers making overtures that they could be forced to leave Indy) has reared its head now.

-Bball

count55
03-16-2009, 07:11 AM
http://www.insideindianabusiness.com/newsitem.asp?id=34506&ts=true
InsideINdianaBusiness.com Report (No author listed)


Meeting under way currently, as I understand it.


The head of the Capital Improvement Board in Indianapolis (CIB) says all options are on the table to help the organization make up for a budget shortfall of at least $20 million. CIB Chairman Bob Grand does not rule out the possibility of a downtown Indianapolis casino to help offset operating costs for Conseco Fieldhouse, Lucas Oil Stadium and the Indiana Convention Center. He says other options include selling naming rights for the convention center.

Grand says the CIB has asked the state legislature for help on the issue. He says the board can only discuss revenue generating opportunities adding that state lawmakers would have to put those ideas into action.

Grand says the CIB had been running at a deficit for years and then took on the added financial burden of Lucas Oil Stadium.

He also says some members of the board believe the downtown area would be better off making sure the National Basketball Association's Pacers stay in Indianapolis. The CIB would have to operate Conseco Fieldhouse with, or without, the professional team as the venues main tenant.

Some opponents to a casino in Indianapolis are concerned it would take business away from new operations in Shelbyville and Anderson

Source: Inside INdiana Business

BillS
03-16-2009, 09:09 AM
Question - does anyone talking about the Pacers' sweet lease deal on the Fieldhouse factor in the $57M they contributed to building the facility?

Do any of the other teams trying to negotiate the same lease intend to pay for part of a new arena?

I have a feeling that the lease deal and the construction costs are not being seen together. I certainly have not heard of any other facility in recent years being built with contributions from the team it was being built for. Why does no one seem to look at this?

Roaming Gnome
03-16-2009, 09:19 AM
Question - does anyone talking about the Pacers' sweet lease deal on the Fieldhouse factor in the $57M they contributed to building the facility?

Do any of the other teams trying to negotiate the same lease intend to pay for part of a new arena?

I have a feeling that the lease deal and the construction costs are not being seen together. I certainly have not heard of any other facility in recent years being built with contributions from the team it was being built for. Why does no one seem to look at this?

Umm... Jim Irsay ponied up $100M dollars into the construction of Lucas Oil Stadium. It is not the same percentage that the Simons poured into Conseco, but it is a rather large chunk of change, none the less.

As for what you are saying.... I'm sure there are a lot of factors involved in the negotiations that the general public are not privy to.

BillS
03-16-2009, 11:41 AM
Umm... Jim Irsay ponied up $100M dollars into the construction of Lucas Oil Stadium. It is not the same percentage that the Simons poured into Conseco, but it is a rather large chunk of change, none the less.

As for what you are saying.... I'm sure there are a lot of factors involved in the negotiations that the general public are not privy to.

I stand corrected. I wasn't back in town yet during the Lucas Oil Stadium stuff, and since I'm only peripherally a Colts fan I didn't follow it.

One point in Irsay's favor, I guess. If the Pacers end up getting screwed, though, I'm still going to be upset with him. Not as upset as I am with Nelson Skalbania, but there you go.

Peck
03-16-2009, 12:00 PM
I stand corrected. I wasn't back in town yet during the Lucas Oil Stadium stuff, and since I'm only peripherally a Colts fan I didn't follow it.

One point in Irsay's favor, I guess. If the Pacers end up getting screwed, though, I'm still going to be upset with him. Not as upset as I am with Nelson Skalbania, but there you go.

:eek: I hadn't heard that name in a long long time.

grace
03-16-2009, 03:51 PM
Not as upset as I am with Nelson Skalbania, but there you go.


:eek: I hadn't heard that name in a long long time.

Show of hands of the people who actually remember who he is. :wave:

Show of hands of the people who think NS will be mentioned in an upcoming :kravitz: column. :wave:

count55
03-16-2009, 03:54 PM
Show of hands of the people who actually remember who he is.

:wave:


Show of hands of the people who think NS will be mentioned in an upcoming :kravitz: column.

:wave:

Roaming Gnome
03-16-2009, 04:00 PM
I'll bite... Who is Nelson Skalbania? :confused: Why is he so hated? ;)

grace
03-16-2009, 04:09 PM
He owned the Indianapolis Racers hockey team (the one that had Wayne Gretzky). His Wikipedia page doesn't make him sound all that bad as the owner. All I remember about him was how :pissed: everyone was when he folded the team.

Peter_sixtyftsixin
03-16-2009, 04:20 PM
He owned the Indianapolis Racers hockey team (the one that had Wayne Gretzky). His Wikipedia page doesn't make him sound all that bad as the owner. All I remember about him was how :pissed: everyone was when he folded the team.

I wasn't alive yet and I'm angry.

BillS
03-17-2009, 08:45 AM
The wikipedia page glosses over things and makes it sound like he tried to save the Racers. That may be a neutral reality, but as I remember it he swooped in, sold off the best players and other assets, then folded the team and went home with his bulging wallet.

Thus proving again why out-of-town owners suxxors.

Drewtone
03-17-2009, 09:54 AM
The wikipedia page glosses over things and makes it sound like he tried to save the Racers. That may be a neutral reality, but as I remember it he swooped in, sold off the best players and other assets, then folded the team and went home with his bulging wallet.

Thus proving again why out-of-town owners suxxors.

Was this why the had Messier on the roster for like 2 months or was that just player movement?

Was there an opportunity to roll the Racers into the NHL with Quebec City/Edmonton/Hartford and the others?

BillS
03-17-2009, 12:46 PM
Was this why the had Messier on the roster for like 2 months or was that just player movement?

Frankly, I don't remember.


Was there an opportunity to roll the Racers into the NHL with Quebec City/Edmonton/Hartford and the others?

As I recall he folded the Racers just before that. My personal anger stems from a feeling at the time that if he hadn't stripped the team of assets and had held on they would have been part of the merger, but his actions seemed to show his purpose was to loot the team rather than try to save it.

I was young and headstrong and much of this may not have been backed up in facts, but the emotions were definitely stirred up.

able
03-17-2009, 02:33 PM
Question - does anyone talking about the Pacers' sweet lease deal on the Fieldhouse factor in the $57M they contributed to building the facility?

Do any of the other teams trying to negotiate the same lease intend to pay for part of a new arena?

I have a feeling that the lease deal and the construction costs are not being seen together. I certainly have not heard of any other facility in recent years being built with contributions from the team it was being built for. Why does no one seem to look at this?


In actual fact the Pacers are also paying another 79 million dollars, which was not the state/city part of the build but a loan to the pacers to get the build done, afaik in exchange for the loan and location the Pacers pay for the building and the city owns it.

If the pacers leave the running cost of the building remain the same as they are today, 15 million dollar minimum, with 8 milllion less income (taxes paid by Pacers atm)

As for SB and tax calculation, only tax that comes in is from concession and rstaurants and hotels, non on tickets, the deal makes that impossible.

Gate on SB goes to the NFL, stadium has to be prepared etc etc by Indiana for the "honour" of hosting it.

Income out of SB is totally different to the numbers spat out, count is far more accurate and indeed the low-end and then it is in "(in-)direct related income".

I.e. possible conferecens sold in the wake, hotelrooms, carhire restaurants etc etc etc.

The reason the Pacers never went for it is because it does little for the fans and costs a fortune.

Taterhead
03-17-2009, 07:01 PM
In actual fact the Pacers are also paying another 79 million dollars, which was not the state/city part of the build but a loan to the pacers to get the build done, afaik in exchange for the loan and location the Pacers pay for the building and the city owns it.

If the pacers leave the running cost of the building remain the same as they are today, 15 million dollar minimum, with 8 milllion less income (taxes paid by Pacers atm)

As for SB and tax calculation, only tax that comes in is from concession and rstaurants and hotels, non on tickets, the deal makes that impossible.

Gate on SB goes to the NFL, stadium has to be prepared etc etc by Indiana for the "honour" of hosting it.

Income out of SB is totally different to the numbers spat out, count is far more accurate and indeed the low-end and then it is in "(in-)direct related income".

I.e. possible conferecens sold in the wake, hotelrooms, carhire restaurants etc etc etc.

The reason the Pacers never went for it is because it does little for the fans and costs a fortune.

http://louisville.bizjournals.com/louisville/stories/2008/05/19/daily20.html

" Indianapolis has landed the 2012 Super Bowl.

The 32 National Football League team owners voted Wednesday afternoon to award Super Bowl XLVI to Indianapolis. Phoenix and Houston also were in the running to hold the game, which will be played on Feb. 5, 2012.

The announcement was made at the NFL Owners' spring meetings in Atlanta, the NFL said on its Web site, www.nfl.com.

The game will be played in Lucas Oil Stadium, the Indianapolis Colts' new $750 million, 75,000-seat stadium, which is expected to open in time for the 2008 season.

The Indianapolis Business Journal reported that Indianapolis businesses and individuals pledged $25 million to help stage the event.

The publication also reported that sports economists estimate that more than 250,000 visitors will come to Indianapolis for the game, creating an economic impact of $300 million to $400 million for Indianapolis.

Indiana Gov. Mitch Daniels, who is in the Middle East visiting Indiana National Guard troops deployed there, issued a statement shortly after the announcement.

"As a Colts fan, I'm thrilled. As a citizen of Indiana, I'm proud," Daniels said in the statement. "This cements our state's reputation as a sports and big events capital."


Just showing people where I am getting the information from. I couldn't find the original story from the Indiana Business Journal, but this story quotes the story I read.

Even if the estimate is a little high, you cannot honestly believe that having 100k+ tourists in a city doesn't have a huge impact on all levels of the economy. And I definately believe this estimate is a lot closer than the others I've seen in this thread.

able
03-17-2009, 07:25 PM
http://louisville.bizjournals.com/louisville/stories/2008/05/19/daily20.html

" Indianapolis has landed the 2012 Super Bowl.

The 32 National Football League team owners voted Wednesday afternoon to award Super Bowl XLVI to Indianapolis. Phoenix and Houston also were in the running to hold the game, which will be played on Feb. 5, 2012.

The announcement was made at the NFL Owners' spring meetings in Atlanta, the NFL said on its Web site, www.nfl.com (http://www.nfl.com).

The game will be played in Lucas Oil Stadium, the Indianapolis Colts' new $750 million, 75,000-seat stadium, which is expected to open in time for the 2008 season.

The Indianapolis Business Journal reported that Indianapolis businesses and individuals pledged $25 million to help stage the event.

The publication also reported that sports economists estimate that more than 250,000 visitors will come to Indianapolis for the game, creating an economic impact of $300 million to $400 million for Indianapolis.

Indiana Gov. Mitch Daniels, who is in the Middle East visiting Indiana National Guard troops deployed there, issued a statement shortly after the announcement.

"As a Colts fan, I'm thrilled. As a citizen of Indiana, I'm proud," Daniels said in the statement. "This cements our state's reputation as a sports and big events capital."


Just showing people where I am getting the information from. I couldn't find the original story from the Indiana Business Journal, but this story quotes the story I read.

Even if the estimate is a little high, you cannot honestly believe that having 100k+ tourists in a city doesn't have a huge impact on all levels of the economy. And I definately believe this estimate is a lot closer than the others I've seen in this thread.

and all you did was confirm what i said, "economic impact" the money that is flowing into the state in the form of hotel nights, car rental, food and drink, this is all "turnover" not profit, low pay jobs, most temp.

The actual "honour" of organizing it COSTS money, hence the pledge for 25 mio and a lot more will be needed.

Colts get a small percentage, city gets the taxes on spending in the city.
nothing more, rest will have to come as a spinoff of the "advertising" it is for the city.

Perhaps you should do a search for cost to a city ?

Putnam
03-17-2009, 07:40 PM
Thank you, Abel.

DC 38
03-17-2009, 08:08 PM
I'm curious, I'm not a big NHL fan by any means...but has the city ever looked at bringing in a NHL team to help out? I'd think an NHL and NBA team would be able to split the costs of the arena easily. I know many teams in the NHL move around alot, and it seems like Indiana would be an ok fit, atleast better than Phoenix. Thoughts?

I don't know if it has been brought up; but Conseco Fieldhouse is not built or configured at all for NHL level hockey. You would have to drop a lot of money into the fieldhouse to make it usable to an NHL franchise. When the Indiana Ice play there; a quarter of the arena is blocked off because of the amount of space an ice rink takes up; and the amount of space a basketball only venue has. Sure, you can stage occasional hockey games there and stage occasional ice-surface events; but no NHL team is going to want to play at Conseco as is.


Cities NEED to stand up to these franchises and tell them that they're not going to support something that is unprofitable and is in many instances viewed as an expensive hobby, but that hasn't happened yet and even if it did I am unsure of how that would actually change anything.

The only problem with this logic, is there will ALWAYS be another city looking to score a franchise. Whether that is OKC throwing itself at the Sonics or Indianapolis stealing the Colts in the night, there will ALWAYS be another city itching to give a sweet deal to a pro sports team; which is what forces cities to bend over backwards to keep their teams. Look at the NFL; how did the Colts and many other teams get nice new stadiums with great lease deals in the past decade. Having Los Angeles open has been great leverage for NFL owners the past decade.

Taterhead
03-17-2009, 11:08 PM
and all you did was confirm what i said, "economic impact" the money that is flowing into the state in the form of hotel nights, car rental, food and drink, this is all "turnover" not profit, low pay jobs, most temp.

The actual "honour" of organizing it COSTS money, hence the pledge for 25 mio and a lot more will be needed.

Colts get a small percentage, city gets the taxes on spending in the city.
nothing more, rest will have to come as a spinoff of the "advertising" it is for the city.

Perhaps you should do a search for cost to a city ?

You aren't judging economic impact in your post. You are looking at this from a business perspective. 200 million earned vs. 200 million spent in business is indeed a wash. But the same 200 million spent vs. 200 million earned in economics is a fire lit.

You have the same argument as b&g and putnam, you act as if this money suddenly vanishes after it is initially earned. You also classify the expenses as a loss. Failing to recognize that even those expenses are revenue to the people earning them. The truth is it is all, expenses and earnings, revenue in economics. You put 400 million in an economy the size of Indianapolis and the impact is staggering compared to what happens when you remove it.

If anyone thinks the impact is minimal they are flat out wrong. If they were right there would actually be very little benefit to even having a sporting franchise to begin with. You can scoff at low wage jobs all you want. But they are essential in virtually any money making venture. They are also essential for all levels of economic growth.

Putnam
03-18-2009, 08:37 AM
You put 400 million in an economy the size of Indianapolis and the impact is staggering compared to what happens when you remove it.

$400 million represents 0.004% of the gross domestic product of the Indianapolis metro area ($89 Billion in 2006). That is less than half of one percent. Staggering, you say?

Anyway, you need to remember that the difference made by the Super Bowl coming to Indianapolis is nothing like the revenue it generates. That would be so only if nothing was happening here now.

The hotel occupancy rate here in Indy is not zero. It is about 60% all the time anyway. The Super Bowl coming means kicking out thousands of people who would come here for other reasons that week.

Hosting the Super Bowl means deferring resources away from already profitable endeavors in order to host the Super Bowl instead. There will be marginal increases in sales for hospitality businesses, but the totals ascribed to the Super Bowl do not represent net gain to the city's economy.



you act as if this money suddenly vanishes after it is initially earned.

Yep. Because very much of it will suddenly vanish. Super Bowl week will bring in a lot of network crews from other places who will eat free food from catered buffets while they are here and then go back home to New York and spend their paycheck there.

The most substantial long-term benefit of the Super Bowl will be an enclosed practice field for the NFC team that will be built on the campus of Arsenal Tech High School near downtown. That is something we'll be able to keep and enjoy long after the Super Bowl week is over. But we're not even sure if that will be built by Hoosier workers.

In short, the total number of permanent new jobs created in Indianapolis from the Super Bowl will be ZERO. The number of temporary (1-3 week duration) jobs for local residents will be a few hundred. The hotels and restaurants are already staffed, so no jobs will be created there. The NFL and the networks will bring their own people. The souvenirs sold will be league approved, with no preference going to local vendors. Even opportunities for prostitutes and nudie dancers will be diluted by out-of-town "talent."

Think about that: --> zero new permanent jobs created.


We could use the same amount of money to build the Indiana Commerce Connector (an outer-loop bypass connecting I-69 at Anderson, I-70 at Greenfield, I-74 at Shelbyville, I-65 at Franklin, and I-70 again at Plainfield). The economic multiplier of that would blow away the benefits of the Super Bowl.


there would actually be very little benefit to even having a sporting franchise to begin with.

Now you're talking. There isn't much benefit. Entertainment is a consumer good that meets consumers' desires. Pro sports can be justified on the grounds that it meets a consumer need. But it does not create wealth.

Wealth is created by agriculture, fisheries, forestry, manufacturing and mining. Some argue that technological innovation is another source of wealth creation. But most other activities, including entertainment, just redistribute wealth that was created elsewhere. The notion that pro sports or any form of entertainment creates wealth, is a widely circulated, commonly accepted lie.

duke dynamite
03-18-2009, 10:47 AM
Interesting read:

http://web.archive.org/web/19970113014540/marketsquarearena.com/faq.htm


<TABLE border=0 cellSpacing=0 cellPadding=0 width=450 align=center><TBODY><TR><TD>Frequently Asked Questions Regarding the Proposed Arena as Provided by the City of Indianapolis/Capitol Improvements Boards' Professional Sports and Arts Task Force Report.

We understand the importance of informing the public about the need for a new arena and how it will positively impact the entire community. Following are frequently asked questions on this issue. (Source: City of Indianapolis/Capitol Improvements Boards' Professional Sports and Arts Task Force Report.)

Economic impact from the Pacers includes fiscal impacts generated by the team within Marion County, the surrounding eight-county area and the state of Indiana. With television fees, advertising, direct spending, visitor dollars, employment and tax revenue generated, the case can easily be drawn that the entire state benefits from having a professional NBA team in Indiana. Professional sports put cities on the map, nationally and internationally. Although this is a non-quantifiable aspect of pro teams, it is nonetheless paramount to the benefits derived from a team's presence.

Professional sports become a vital part of a city's cultural mix, attracting new business as well as new residents. If one would question a team's worth, look only to St. Louis, Cleveland and Baltimore which are willing to spend upwards of $400 million -- or four to five times the original needed investment -- to attract a new team to their cities.

Why did the Simons buy the Pacers?

In 1983, at another critical moment for the Pacers, ticket sales were swindling and the team was receiving offers to move from other cities. The Simon brothers viewed the team as a community and state asset, and believed strongly they could make the team economically competitive in Indianapolis.

What's wrong with Market Square Arena?

The intimate size that makes MSA a good basketball facility is the same feature that diminishes its ability to produce adequate revenue for the Pacers. The lack of high quality seats -- namely suites and club seats -- along with increased concessions, advertising and naming rights keep the Pacers near the bottom of NBA franchises in total revenues. Additionally, MSA lacks a training facility comparable to those of other NBA teams.

Market Square Arena is one of the last NBA arenas without premium seating, and will be the league's second oldest arena by the year 2000.

What is meant by attendance-related arena revenues, and how do the Pacers rank?

Arena revenues are the attendance-related sources of income such as ticket revenues, concessions, novelties, suites and parking. Market Square Arena does not provide enough stadium-related revenue streams to allow the Indiana Pacers to compete under the changing economics of the NBA. These conditions are projected to worsen in the future.

NBA teams earn on average 50 percent of their total income from arena attendance-related revenues, according to Financial World ("Sports," May 20, 1996). The Pacers, even at last year's 99.4% capacity and 13 consecutive sell-out games to end the season, and this year's 95% capacity, rank consistently among the very lowest in the league in these attendance-related revenues. In fact, in the same Financial World article, the Pacers were ranked 24th out of 27 teams in total revenues (teams 25 and 26 are now in the process of getting new arenas).

What are the financial and competitive problems facing the Pacers?

The Pacers are in a small media market (ranked 23rd in the league), and thereby, do not have the lucrative television and cable contracts some other teams have, literally worth millions of dollars. This makes the need for attendance-related arena revenues all the more necessary . Additionally, in order to stay competitive in today's NBA, superstar players are needed. Salary levels for these cream-of-the-crop players have risen to new heights and set the market for the entire field of players.

In the 1996-97 season, the Pacers will lose approximately $17 million from operations. In past years, the Pacers have lost at least $2 million per year. The most likely scenario going forward is that they will lose more than $10 million annually.

Why did these financial losses occur?

In large part, due to a sharp rise in players' salaries. The recent raising of the players' salary cap (from $10 million to $25 million), allowing teams to vie more heavily for each others' players, along with the Larry Bird exception where a team's free agents can be signed by that team at any amount, have driven players' costs significantly up. This is a national market set by all participating teams.

Why is it important that the Arena issue be considered in early 1997?

The Pacers are on a rapidly increasing spiral of escalating costs, and losses, based largely on increased players' salaries. Without being able to cover those costs with adequate revenues, the Simons will be forced to make a financial decision to sell the team. In order to keep the Pacers in Indianapolis, the Pacers need to be in a new arena by the start of their 1999 season.

The only way to be in a new arena by August 1999, architectural design plans need to be drawn beginning in early 1997, with construction to begin mid-1997.

Will the team move if it does not get a new stadium?

The efforts of city officials, legislative leaders, Pacers fans, community leaders and the Pacers are all designed to keep the team in Indiana.

While it is the Simon family's goal to keep the team in Indianapolis, they cannot continue subsidizing the team indefinitely. If no solution can be found by the team's designated date of 1999, NBA basketball may draw the conclusion that the support needed from the community to keep basketball in Indiana does not exist. In that case, the Pacers will either be sold to a local buyer or another out-of-town buyer. If sold to a local buyer, the problem will merely continue rather than be solved. If sold to an out-of-town buyer, the team most likely will move to another city.

Will the Pacers guarantee to stay if a new arena is built?

Yes. The Simons have agreed to keep the Pacers in Indianapolis for at least the next 20 years if a new arena is built. They do this even looking at the likely scenarios that additional revenues produced from a new arena would possibly only bring them to a break-even level.

How much will a new stadium cost?

A preliminary design and site analysis has been prepared by several independent firms, studying everything from economic impact to traffic flow patterns. An educated estimate of the cost is 175 million. This estimate includes land acquisition costs for a new arena.

Are the Pacers willing to help toward the financing for a new arena?

Yes, the Pacers are willing to help finance a new arena. In cities that have recently built arenas, contributions have taken various forms. The Pacers are willing to make a financial commitment that is consistent with what other owners have done. Most likely that will include some economic participation up front, and then the sole handling of operating expenses. This places considerable risk with the Pacers for future performance. It also absolves the city from making any future cash subsidies.

What funding sources will be used to pay for a new arena?

This issue is now under investigation. The priority here is to use a new source of public dollars so that traditional allocation of funds to schools, neighborhoods, city streets and the like is not affected. Mayor Goldsmith refuses to use any general property tax levy to fund professional sports.

Why should public dollars fund a privately owned organization?

The Pacers have historically never turned a profit, but items such as NBA expansion payouts and CIB advances have helped them at least break-even. The costs today, however, are escalating beyond that point of assistance. At some level, the losses become so great that it's unreasonable to expect the Simons to continue to incur these kinds of losses without making necessary changes. To build an arena themselves would be to incur even further losses.

The argument also exists that this is a community asset, and the sole expense should not be on the owners. Particularly when no financial gain is being realized by the team. The city will benefit from a new arena, outfitted with today's state-of-the-art amenities.

How will a new arena affect Pacers ticket prices?

The Pacers are insistent upon making professional basketball an entertainment asset that the entire community can enjoy. With the addition of more seats, the team plans on being able to maintain affordable prices for a significant number of those seats.
</TD></TR></TBODY></TABLE>

Speed
03-18-2009, 10:53 AM
In 1983, at another critical moment for the Pacers, ticket sales were swindling and the team was receiving offers to move from other cities.
----------

Hmmmm.

Peter_sixtyftsixin
03-18-2009, 11:00 AM
Will the Pacers guarantee to stay if a new arena is built?

Yes. The Simons have agreed to keep the Pacers in Indianapolis for at least the next 20 years if a new arena is built. They do this even looking at the likely scenarios that additional revenues produced from a new arena would possibly only bring them to a break-even level.

Does anyone else feel more angry now?

Unclebuck
03-18-2009, 12:56 PM
As I remember 1983 and I remember well, the Pacers were all but gone - it was pretty much a done deal - when the Simons at the last minute bought the team. - it was as close to a miracle as I can ever remember.

No I don't feel angry now -(quite the opposite - very thankful for the Simons) things change plus it has already been 10 years since the place opened and 12 years since building was started

Country Boy
03-18-2009, 02:17 PM
http://www.indystar.com/apps/pbcs.dll/article?AID=/20090318/OPINION01/903180322&s=TimeStampDescending&page=2#pluckcomments

Patrick J. Early


Everyone should take the time to read the reader's comments about this article. His comment about Tully and the crayon is uncalled for. Who does he represent again? It sure in the hell is not the taxpayers.

Roaming Gnome
03-18-2009, 02:26 PM
Sounds like Pat Early is right on the money, to me. I happen to agree that Tully is a bit short sighted in his column.

As for the comments... I didn't read them because I really don't care what they have to say. I'm sure it is the same outrage found at the end of all IndyStar articles.

Last but not least... I am a Pacer fan and them staying in town is worth the cost to me.

ReginaldWayne
03-18-2009, 02:30 PM
Last but not least... I am a Pacer fan and them staying in town is worth the cost to me.

100% agree and would be willing.

duke dynamite
03-18-2009, 02:32 PM
Well, Tully has no idea on Sports Marketing and revenue. He may know business but he doesn't know sports.

Unclebuck
03-18-2009, 02:43 PM
Nice column by Patrick Early.

duke dynamite
03-18-2009, 03:18 PM
Yeah, I don't understand the thread of this title, though. Should we be mad at Patrick or the comments on his article?

I wholeheartedly agree with everything that Mr. Early says.

Hicks
03-18-2009, 04:02 PM
Ultimately, while I do agree with those who say the NBA's current setup is in need of repair or reform, saying no to the Pacers does nothing to address it and will only result in an increased likelihood of the Pacers leaving. I don't have to think it's a good financial move to like doing it because frankly I just want the Pacers to stay, and this is not enough to leave me outraged and ready to send them on their way.

Kraut N Beer
03-18-2009, 04:04 PM
I was just reading this week's IBJ and I surprised to see that Conseco Fieldhouse is the 2nd most-popular area attraction with 1.4 million in attendance in 2007, well behind the State Fairgrounds and just ahead of the Indianapolis Zoo. Convention Center and RCA Dome were 4th and likely to move up with Lucas Oil and Convention Center expansion. I would hope that we can come up with a way to resolve the missing revenue piece because the financial loss if the Pacers left town coupled with an often-empty Conseco Fieldhouse would be devastaing.

Pacers
03-18-2009, 04:14 PM
This is real simple:

Pacers wipe the 15 mil off the books - city takes that over and owns and runs the Fieldhouse totally.

The city charges an event fee similar to any other event that runs there, Pacers keep the gate, city takes the rest.

Pacers don't get any money for anything else connected to the arena (don't know if they do now, but if so, not any more).

BTW, should I know, and/or give a damn, who Patrick Early is?

Raoul Duke
03-18-2009, 06:03 PM
BTW, should I know, and/or give a damn, who Patrick Early is?

VP of the CIB

Country Boy
03-18-2009, 06:06 PM
Nice column by Patrick Early.

So you are no longer on the side of the tax payer UB? Strange I always thought you were for lower taxes, guess I must have been wrong. Is the CIB just an extension of the Pacers and the Simon empire or are they suppose to be independent? Tully's article pointed this out and I guess he struck a nerve with Early, exposing him for the poor leadership that has the CIB on the brink of extinction.

Country Boy
03-18-2009, 06:08 PM
Well, Tully has no idea on Sports Marketing and revenue. He may know business but he doesn't know sports.

Evidently the Simons don't understand .Sports Marketing and revenue either or they would not be losing millions yearly on the Pacers. Or maybe they aren't as altruistic as some would have you to believe.

Country Boy
03-18-2009, 06:27 PM
Sounds like Pat Early is right on the money, to me. I happen to agree that Tully is a bit short sighted in his column.

As for the comments... I didn't read them because I really don't care what they have to say. I'm sure it is the same outrage found at the end of all IndyStar articles.

Last but not least... I am a Pacer fan and them staying in town is worth the cost to me.

Gnome, I don't want the Pacers to leave town either, however that is not to say that I approve of the city being held hostage once again by an owner of a pro team. Believe it or not, there are Hoosiers who don't give a hoot about the Pacers and don't feel that they should have to pay one penny for you or I to be able to have a pro team to go watch. Saying to them that the Pacer's also help them in some roundabout way doesn't pass the stink test.

Trader Joe
03-18-2009, 06:31 PM
It passed the stink test for the Colts, and it would have passed the stink test 10 years ago for the Pacers.

BlueNGold
03-18-2009, 07:16 PM
While I want the Pacers to stay in Indy as much as anybody, a little truth needs mixed in to balance out the absurdity.

The convention argument is a farce. The decision to hold a convention at a particular site varies, but the cost of lodging and convention space are by far the most important. Other factors include weather (e.g. San Diego is big), entertainment/tourism (e.g. Vegas...Indy is no destination), retail, restaurants, layout of the city, etc. Unless we are talking about a Pacer convention, a tiny fraction of out-of-staters are going to even care that an NBA team plays several blocks away on Pennsylvania...almost hidden from the convention area...and odds are high that the Pacers are not even in season or in town. Considering Indy's biggest conventions are Gen Con and FFA, I'm surprised there is even an argument. Now, if we were lucky enough to have an excellent team , convention goers would attend the game, but it would need to be dynasty-like to have a significant impact on any non-sports convention to decide on Indy. Sorry, but I just don't see it.

Also, while the Pacers do bring in revenue and add spice to the city, the author is overstating the Pacers' importance to the city and ignoring the fact many other private institutions could make the same case...but don't ask for tax payer financing.

Take Butler University. It is a private institution that brings a lot of money into the city. Many visitors over the course of the year. Many students from other states and countries. Certainly these people spend more in Indy than fans from out of state attending 41 Pacer games...yet they don't ask for millions. That is just one private institution of many. There are hundreds of other companies in Indianapolis and the doughnut counties that do the same thing to varying degrees and find a way to pay their own mortgage. I do believe we would be in trouble if we treated other private companies the same way.

Anyway, to me it's a matter of private vs public...and a matter of equity.

Taterhead
03-18-2009, 08:10 PM
$400 million represents 0.004% of the gross domestic product of the Indianapolis metro area ($89 Billion in 2006). That is less than half of one percent. Staggering, you say?


In a single week stretch? Yes it is. Are you telling me something that happens in a week that adds almost a half percent to your overall GDP for the entire year is minor? That is above a 100% increase for that week. In other words, that single event will generate about the same, or even a little more than the rest of the city for that week. C'mon Putnam. Of course some of that money will leave the state, but not any more than already does. A lot of the money you spend day to day leaves the state. Does that mean it isn't beneficial? Of course not.

I do think the importance of a pro franchise is overblown in some circumstance. But there is no way having over a hundred thousand tourists in your city for a week maxing out hotel capacity, renting cars, crowding eateries and malls all while paying local taxes is ever "not that beneficial" to your economy.

Taterhead
03-18-2009, 08:30 PM
$400 million represents 0.004% of the gross domestic product of the Indianapolis metro area ($89 Billion in 2006). That is less than half of one percent. Staggering, you say?

Anyway, you need to remember that the difference made by the Super Bowl coming to Indianapolis is nothing like the revenue it generates. That would be so only if nothing was happening here now.

The hotel occupancy rate here in Indy is not zero. It is about 60% all the time anyway. The Super Bowl coming means kicking out thousands of people who would come here for other reasons that week.

Hosting the Super Bowl means deferring resources away from already profitable endeavors in order to host the Super Bowl instead. There will be marginal increases in sales for hospitality businesses, but the totals ascribed to the Super Bowl do not represent net gain to the city's economy.




Yep. Because very much of it will suddenly vanish. Super Bowl week will bring in a lot of network crews from other places who will eat free food from catered buffets while they are here and then go back home to New York and spend their paycheck there.

The most substantial long-term benefit of the Super Bowl will be an enclosed practice field for the NFC team that will be built on the campus of Arsenal Tech High School near downtown. That is something we'll be able to keep and enjoy long after the Super Bowl week is over. But we're not even sure if that will be built by Hoosier workers.

In short, the total number of permanent new jobs created in Indianapolis from the Super Bowl will be ZERO. The number of temporary (1-3 week duration) jobs for local residents will be a few hundred. The hotels and restaurants are already staffed, so no jobs will be created there. The NFL and the networks will bring their own people. The souvenirs sold will be league approved, with no preference going to local vendors. Even opportunities for prostitutes and nudie dancers will be diluted by out-of-town "talent."

Think about that: --> zero new permanent jobs created.


We could use the same amount of money to build the Indiana Commerce Connector (an outer-loop bypass connecting I-69 at Anderson, I-70 at Greenfield, I-74 at Shelbyville, I-65 at Franklin, and I-70 again at Plainfield). The economic multiplier of that would blow away the benefits of the Super Bowl.



Now you're talking. There isn't much benefit. Entertainment is a consumer good that meets consumers' desires. Pro sports can be justified on the grounds that it meets a consumer need. But it does not create wealth.

Wealth is created by agriculture, fisheries, forestry, manufacturing and mining. Some argue that technological innovation is another source of wealth creation. But most other activities, including entertainment, just redistribute wealth that was created elsewhere. The notion that pro sports or any form of entertainment creates wealth, is a widely circulated, commonly accepted lie.



I was in the valley for SB 42 week. It was astonishing how packed the city was. There was no doubt something very major was going on. These weren't people that lived there. Everywhere you went was overflowing with people. It was insane. I've actually wondered if Indy could even handle that kind of overflow of people. There is no way in hell that kind of event is not beneficial. I've said about all I can about it.

able
03-18-2009, 08:32 PM
In a single week stretch? Yes it is. Are you telling me something that happens in a week that adds almost a half percent to your overall GDP for the entire year is minor? That is above a 100% increase for that week. In other words, that single event will generate about the same, or even a little more than the rest of the city for that week. C'mon Putnam. Of course some of that money will leave the state, but not any more than already does. A lot of the money you spend day to day leaves the state. Does that mean it isn't beneficial? Of course not.

I do think the importance of a pro franchise is overblown in some circumstance. But there is no way having over a hundred thousand tourists in your city for a week maxing out hotel capacity, renting cars, crowding eateries and malls all while paying local taxes is ever "not that beneficial" to your economy.


No idea what kind of math you are using but as stated GDP (based on 06) 89 billion, that means 1.8 billion per week, 400 mio is less than 25% of that

barely noticable drop in the economic bucket.

Btw i hope, for the sake of the hotels, in Indy that their(the hotels) OR is well over 87% otherwise they be in the losing money business.

Haggard
03-18-2009, 08:41 PM
In 1983, at another critical moment for the Pacers, ticket sales were swindling and the team was receiving offers to move from other cities.

swindling??? Didn't know indy was know for its basketball fraud in the early 80's

maybe dwindling

BlueNGold
03-18-2009, 08:43 PM
Does anyone else feel more angry now?

Not really, but I'm with you.

By the way, I like Granger as much as the other guy, but why was this not raised about the time they signed Danny to his huge contract? That was not long ago.

The truth is, the decision to sign Danny was made with knowledge of the financial situation. Maybe not the economic meltdown, but the historical losses being whined about at the moment. If they stopped whining about the Pacers operating losses and were more truthful....that their much bigger losses have little to do with the Pacers and a whole lot to do with the value of their other investments (e.g. real estate)....I would show more understanding.

Country Boy
03-18-2009, 09:11 PM
While I want the Pacers to stay in Indy as much as anybody, a little truth needs mixed in to balance out the absurdity.

The convention argument is a farce. The decision to hold a convention at a particular site varies, but the cost of lodging and convention space are by far the most important. Other factors include weather (e.g. San Diego is big), entertainment/tourism (e.g. Vegas...Indy is no destination), retail, restaurants, layout of the city, etc. Unless we are talking about a Pacer convention, a tiny fraction of out-of-staters are going to even care that an NBA team plays several blocks away on Pennsylvania...almost hidden from the convention area...and odds are high that the Pacers are not even in season or in town. Considering Indy's biggest conventions are Gen Con and FFA, I'm surprised there is even an argument. Now, if we were lucky enough to have an excellent team , convention goers would attend the game, but it would need to be dynasty-like to have a significant impact on any non-sports convention to decide on Indy. Sorry, but I just don't see it.

Also, while the Pacers do bring in revenue and add spice to the city, the author is overstating the Pacers' importance to the city and ignoring the fact many other private institutions could make the same case...but don't ask for tax payer financing.

Take Butler University. It is a private institution that brings a lot of money into the city. Many visitors over the course of the year. Many students from other states and countries. Certainly these people spend more in Indy than fans from out of state attending 41 Pacer games...yet they don't ask for millions. That is just one private institution of many. There are hundreds of other companies in Indianapolis and the doughnut counties that do the same thing to varying degrees and find a way to pay their own mortgage. I do believe we would be in trouble if we treated other private companies the same way.

Anyway, to me it's a matter of private vs public...and a matter of equity.


Very well stated, much better than I have been able to do.

Taterhead
03-18-2009, 11:21 PM
No idea what kind of math you are using but as stated GDP (based on 06) 89 billion, that means 1.8 billion per week, 400 mio is less than 25% of that

barely noticable drop in the economic bucket.

Btw i hope, for the sake of the hotels, in Indy that their(the hotels) OR is well over 87% otherwise they be in the losing money business.

It's a little rough estimate math. His figure is for the Indianapolis Metro Area. Mine is a projection for the actual city of Indianapolis. His figures nearly triple the actual population of Indianapolis and include 9 counties. Is that a fair view of the economic impact on Indianapolis? So if you take 33% share of that number and assume that is the actual city of Indianapolis' GDP or close to it to match their share of the overall population, then you see my comparison. According to that math, Indy's share of that is a little under 600 million per week. I should've explained that, sorry about that. But what does this event have to do with the 8 surrounding counties anyway?

Also, GDP is not a fair comparison to just revenue. GDP adds in taxes, revenue, spending and even a few other factors. So if you want to compare the two fairly, then you have to add in the cost to put on the event, the revenue it generates including the taxes along with the salaries paid to those temporary workers altogether to one number. When you do that this event will at the very least rival or more than likely exceed the GDP for that week in Indianapolis aside from that associated with the SB. Hardly "barely noticeable".

Again I just realized I went off on my own thing and didn't really explain my POV very well, my apologies.


BTW, no way many hotels outside of paradise operate at 87% occupancy most of the time. I actually thought Putnams 60% estimate was pretty generous for Indy's hotel business.

BillS
03-19-2009, 08:03 AM
BTW, no way many hotels outside of paradise operate at 87% occupancy most of the time. I actually thought Putnams 60% estimate was pretty generous for Indy's hotel business.

As someone who has tried to book some conferences here in Indy I can tell you that 60% may be the average for the year but, during times when the weather can be counted on, the figure is much higher. Trying to find space from about the second week of March through the end of October is very difficult.

Putnam
03-19-2009, 08:39 AM
Taterhead, Your "rough estimates" are the problem. You are drawing reasonable conclusions, but you really don't know enough about this community to win this argument.

Eighty-nine billion is not my guess, but the published value of the US Bureau of Economic Analysis, which is the fundamental source informing nearly every statement of output. The 60% occupancy rate for local hotels is not my guess, but the statement from the convention and visitors bureau.



So if you take 33% share of that number and assume that is the actual city of Indianapolis' GDP or close to it to match their share of the overall population, then you see my comparison.

You are guessing. I know what share of regional revenues come from Marion County. (It is nearer two-thirds than one-third.)

You ask, "What does this have to do with the eight surrounding counties anyway?" The answer is that those counties are integral to the city. About one in three people who works in Marion County lives in those suburban counties. Several of the hotels where Super Bowl guests will stay are located in those suburban counties. There's just no sense in discussing Indianapolis in isolation from the region.

Your argument for an economic ripple effect actually becomes stronger when we look at input-output multipliers over a wider area.




I've said about all I can about it.
Good.

I have not said, and I think neither Abel nor anyone else has said, that Indianapolis will realize no benefit at all from the Super Bowl. There will be some benefit. I have said three things:

1. the actual benefit will be much less than the $400 million figure you've cited,

2. the benefit will be marginal, not transformational, and

3. Lucas Oil Stadium will never pay for itself, even with a Super Bowl.

Putnam
03-19-2009, 09:21 AM
Of course some of that money will leave the state, but not any more than already does.

You are not right about this. The velocity of money on Super Bowl week is much faster than usual.

Consider souvenirs. All the souvenirs will be NFL-licensed, and many of the venders will be from out of town (just as they are during the Indy 500). Those venders will put the money in their pockets and they will drive way with it on Monday morning. Pfffttt!! Gone. They probably won't collect and pay sales tax. Millions of dollars will change hands, but net local benefit: Zero.

The gift shops inside Lucas Oil Stadium will also get a share of souvenir sales, but the gift shops are staffed by volunteers (I've done it myself to raise money for my kids' school). No wage gain there, though we will get the sales tax.

If Indianapolis-based Finish Line has the contract to make the official Super Bowl gear, they'll get a nice order out of it. But Finish Line's sales won't increase at all because the game is played here. Finish Line might profit more if the game were played in a larger city rather than at their home base.

Consider special exhibits. A big part of the Super Bowl hoopla is interactive exhibitions that the NFL organizes, e.g., The NFL Experience, which, since it travels from year to year, won't be created in Indy. It, and other exhibits will come rolling in on trucks, unload and set up, pass thousands of fans through until game time . . . and then leave with the money. The money from ticket sales will be shared by the NFL and the contractor. Certainly there will be big crowds lined up for that, but what does Indy get? I just hope the vender pays for the electricity they use.

Consider hotels. The hotels are already staffed. I envision a lot of maids having to work extra hard to clean 20 rooms each day where they'd normally have to clean only a dozen or so. But they aren't going to get paid more because its Super Bowl week. The hotels themselves will benefit, but, as we've said, the benefit will be the marginal gain from 60% to 100% for a few days. That is nothing more than the boost we get each year from the 500, and again when the FFA comes to town. And Gen-Con, too? (I don't know much about that one.)

Consider restaurants. Much of the eating will be catered. Local caterers will do some of it and out-of-town caterers will do the rest. In order to focus on Super Bowl business, local businesses will be saying "No" to other, equally profitable customers, so the real incremental gain for local businesses will be much less than the total that will get reported as the Super Bowl's "economic impact."

The out-of-town caterers, like the souvenir sellers, will pack up and leave town on Monday morning. Money will change hands, but much of it will be one out-of-towner paying another out-of-towner.

For the rest, I've already heard grumbling from downtown restaurant owners who expect to lose money because of the Super Bowl. The NFL manages the event tyranically and will prefer special events (where it gets a cut of revenue) to local establishments. The event will bring benefits to some local businesses, but by no means to all.


there is no way having over a hundred thousand tourists in your city for a week maxing out hotel capacity, renting cars, crowding eateries and malls all while paying local taxes is ever "not that beneficial" to your economy.

Are there going to be 100,000 for a week? Or will it be only league officials, the teams' players and families, and the media for a week? Won't the majority of the fans come in for one or two nights only? In Tampa this year, The NFL Experience didn't even set up until Thursday afternoon.

HC
03-19-2009, 12:28 PM
These athletes, and all entertainers in general, need to swallow the pride pill and come join the rest of us in reality. They are getting filthy rich doing something they love. They need to take a step back and think about how ridiculous that is. Who here would'nt play pro ball for 500,000 a year? I sure as hell would, heck I would play for less than that. I need 50 million dollars about as much as Danny Granger needs a batcave.

Speed
03-19-2009, 12:35 PM
It was said this in another thread, you aren't going to stick it to the Pacers by not working with them, they'll just go to another city that will. So there's really no "i'll show you, I'm taking a stand" mentality. There's no point to be proven.

Putnam
03-19-2009, 12:44 PM
These athletes, and all entertainers in general, need to swallow the pride pill and come join the rest of us in reality. They are getting filthy rich doing something they love. They need to take a step back and think about how ridiculous that is. Who here would'nt play pro ball for 500,000 a year? I sure as hell would, heck I would play for less than that. I need 50 million dollars about as much as Danny Granger needs a batcave.

Is the anger really necessary?

It is pretty clear that some/most/all pro athletes are going to earn less in the years to come. Those who can't feed their families in the new pro athlete payscale will go do something else that pays them better, or else they'll take what they can get. That is already starting to happen.

Speed
03-19-2009, 12:48 PM
These athletes, and all entertainers in general, need to swallow the pride pill and come join the rest of us in reality. They are getting filthy rich doing something they love. They need to take a step back and think about how ridiculous that is. Who here would'nt play pro ball for 500,000 a year? I sure as hell would, heck I would play for less than that. I need 50 million dollars about as much as Danny Granger needs a batcave.

No disrespect, but I've heard this argument my WHOLE life. If you do something that people value at a rate of say 500k a year then you will make 500k a year. You will make what people pay you for what you are able to do. In the case of paying entertainers, do you think someone give Julia Roberts 20 million a film because she is AWESOME, no it's because they think she can make them way way more than that. So the market for her to do a film is 20 million because someone is willing to pay her that.

If someone said wow you make 40k a year that is ridiculous, you should be ashamed and only work for 35k to you. Would you take less money? HELL NO. You'd say wait I want to make 80k a year not 35k and I will work for what they are willing to pay me.

Ya, they make alot of money, but is it too much, well not if someone is willing to pay it, it's what the market will bear. I never blame an athlete or anybody from trying to maximize their earning potential.

And if you a a heart surgeon and have a special gift that only a few people can do, then man o man I hope you get paid for your expertise. It only seems fair. Conversely, if your the worlds BEST DITCH DIGGER then I hope someone will pay you for your special talent. It's no different.

Lastly, if anyone, I mean anyone, really wants to stop these people from making the large amounts of money they do, then here is your answer. DON'T go to games, but not only that, DON'T watch games, but not only that, DON'T buy merchandise. Not one minute of one game, then the market will adjust when EVERYONE does that. Stop going to Julia Roberts movies, renting DVDs and Julia Roberts will make quite a bit less.

Unless someone is will to make this commitment and get a several million of your friends to follow then the money that players and entertainers make is what the market will bear and is what they will get paid.

HCPacerIN, I absolutely don't mean this as bad to you and when I'm saying "you" I mean 3rd person you, not you. I've just heard this same thing my whole life and I always feel compelled to argue strongly my difference of opinion.

Oh ya, imho.

<wiping the spit off my screen>

Roaming Gnome
03-19-2009, 12:56 PM
No disrespect, but I've heard this argument my WHOLE life. If you do something that people value at a rate of say 500k a year then you will make 500k a year. You will make what people pay you for what you are able to do. In the case of paying entertainers, do you think someone give Julia Roberts 20 million a film because she is AWESOME, no it's because they think she can make them way way more than that. So the market for her to do a film is 20 million because someone is willing to pay her that.

If someone said wow you make 40k a year that is ridiculous, you should be ashamed and only work for 35k to you. Would you take less money? HELL NO. You'd say wait I want to make 80k a year not 35k and I will work for what they are willing to pay me.

Ya, they make alot of money, but is it too much, well not if someone is willing to pay it, it's what the market will bear. I never blame an athlete or anybody from trying to maximize their earning potential.

And if you a a heart surgeon and have a special gift that only a few people can do, then man o man I hope you get paid for your expertise. It only seems fair. Conversely, if your the worlds BEST DITCH DIGGER then I hope someone will pay you for your special talent. It's no different.

Lastly, if anyone, I mean anyone, really wants to stop these people from making the large amounts of money they do, then here is your answer. DON'T go to games, but not only that, DON'T watch games, but not only that, DON'T buy merchandise. Not one minute of one game, then the market will adjust when EVERYONE does that. Stop going to Julia Roberts movies, renting DVDs and Julia Roberts will make quite a bit less.

Unless someone is will to make this commitment and get a several million of your friends to follow then the money that players and entertainers make is what the market will bear and is what they will get paid.

HCPacerIN, I absolutely don't mean this as bad to you and when I'm saying "you" I mean 3rd person you, not you. I've just heard this same thing my whole life and I always feel compelled to argue strongly my difference of opinion.

Oh ya, imho.

<wiping the spit off my screen>

:king:
I thank you a thousand times!

Unclebuck
03-19-2009, 01:21 PM
Deleted post!



Is this Pacers related - seems like you are getting way off track and into politics

ChicagoJ
03-19-2009, 01:42 PM
Get this discussion back to basketball, people.

duke dynamite
03-19-2009, 03:53 PM
Where is the ignore thread feature?

Pacers
03-19-2009, 04:09 PM
It's on your mouse.

Roaming Gnome
03-19-2009, 04:23 PM
I'm choosing not to close the thread because it can generate some decent conversation about the lease negotiations, but when the discussion stops being about the Pacers and the lease, then it is just news/politics which will not be discussed here.

This is to serve as a last warning before infractions are to be assigned.

Taterhead
03-19-2009, 04:24 PM
Right now as we speak there are people in the city preparing for that week, 3 years in advance. An old friend of mine owns a bar in Phoenix. He bought the run down building next door and spent two years renovating it. He doubled the size of his bar specifically in prep for that event. He told me he made an "absolute killing", the extra business it generated paid for that and then some. My aunt turned her house into a bed and breakfast for the week and cleared 5k doing so. The hotels are not only turning people away, they are charging double what they normally do. Waitresses, cab drivers, bus boys, bartenders, chamber maids all will have there best weeks ever by far. Thousands of temp jobs will be created in an environment that right now is approaching 10% unemployment. Rental car prices will climb steeply and most places in Indianapolis will be sold out. The Airport will be swamped.

Also, I have heard talk of development possibly taking place on the Canal to create something similar to the river walk in San Antonio. There has been talk of the Casino as well. I have heard of work being planned to revamp the near east side of the city, an area that has been neglected for years. The massive project proposed for fountain square had a lot to do with the SB coming here. The city will want to impress during this event. It could be great pub for the city like Miami, or it could be bad pub for the city like it was for Detroit. And they are going to do everything they can to avoid bad publicity with the deck already stacked against them because of weather issues. I guess we just have a different view of what is significant and what is not. But I personally can't think of any other single week that could possibly have as big an impact in the city financially as this.

Putnam, all of these assumptions. I have no more evidence of the economic impact than you do of who will be eating what meals and how many chamber maids will be cleaning up the mess. But wait and see. The city will be on fire that week. And judging by this economy we are looking at, it will be much needed even if it isn't as big as we hope for, JMO.

DC 38
03-19-2009, 05:31 PM
Take Butler University. It is a private institution that brings a lot of money into the city. Many visitors over the course of the year. Many students from other states and countries. Certainly these people spend more in Indy than fans from out of state attending 41 Pacer games...yet they don't ask for millions. That is just one private institution of many. There are hundreds of other companies in Indianapolis and the doughnut counties that do the same thing to varying degrees and find a way to pay their own mortgage. I do believe we would be in trouble if we treated other private companies the same way.

Anyway, to me it's a matter of private vs public...and a matter of equity.

The difference between say Butler and the Pacers is that Butler is not going to relocate to Kansas City if they are losing money. They will just raise their tuition (like they just did) and people will still pay for it because Butler offers are very good education. Also, let's say a major corporation such as Eli Lilly threatens to leave Indianapolis for KCMO because KCMO is offering Eli Lilly free rent on a brand new state of the art HQ. In that situation, Indianapolis would absolutely offer a sweet heart deal to try to keep Eli Lilly's HQ here in Indianapolis.

It is the same idea with the Pacers.

BlueNGold
03-19-2009, 06:38 PM
The difference between say Butler and the Pacers is that Butler is not going to relocate to Kansas City if they are losing money. They will just raise their tuition (like they just did) and people will still pay for it because Butler offers are very good education.

That's a good point. It doesn't say much for the Pacers or the fact there is little demand for their tickets...but it does make sense.


Also, let's say a major corporation such as Eli Lilly threatens to leave Indianapolis for KCMO because KCMO is offering Eli Lilly free rent on a brand new state of the art HQ. In that situation, Indianapolis would absolutely offer a sweet heart deal to try to keep Eli Lilly's HQ here in Indianapolis. It is the same idea with the Pacers.

I don't think that analogy works. The impact of losing thousands of good paying jobs far outweighs anything the Pacers provide financially to the city of Indianapolis.

I think before the city does anything, they should bring in some independent consultants to analyze the cost / benefit to the city. I don't think the CIB or local politicians are competent and non-biased enough to make this decision.

HC
03-19-2009, 06:52 PM
No disrespect, but I've heard this argument my WHOLE life. If you do something that people value at a rate of say 500k a year then you will make 500k a year. You will make what people pay you for what you are able to do. In the case of paying entertainers, do you think someone give Julia Roberts 20 million a film because she is AWESOME, no it's because they think she can make them way way more than that. So the market for her to do a film is 20 million because someone is willing to pay her that.

If someone said wow you make 40k a year that is ridiculous, you should be ashamed and only work for 35k to you. Would you take less money? HELL NO. You'd say wait I want to make 80k a year not 35k and I will work for what they are willing to pay me.

Ya, they make alot of money, but is it too much, well not if someone is willing to pay it, it's what the market will bear. I never blame an athlete or anybody from trying to maximize their earning potential.

And if you a a heart surgeon and have a special gift that only a few people can do, then man o man I hope you get paid for your expertise. It only seems fair. Conversely, if your the worlds BEST DITCH DIGGER then I hope someone will pay you for your special talent. It's no different.

Lastly, if anyone, I mean anyone, really wants to stop these people from making the large amounts of money they do, then here is your answer. DON'T go to games, but not only that, DON'T watch games, but not only that, DON'T buy merchandise. Not one minute of one game, then the market will adjust when EVERYONE does that. Stop going to Julia Roberts movies, renting DVDs and Julia Roberts will make quite a bit less.

Unless someone is will to make this commitment and get a several million of your friends to follow then the money that players and entertainers make is what the market will bear and is what they will get paid.

HCPacerIN, I absolutely don't mean this as bad to you and when I'm saying "you" I mean 3rd person you, not you. I've just heard this same thing my whole life and I always feel compelled to argue strongly my difference of opinion.

Oh ya, imho.

<wiping the spit off my screen>
I am aware that everything you said is accurate,and I do not disagree. I am aware of the fact that every time I walk into a mall I am putting money into the Simon's pockets. I am not that naive. The fact is two million people wouldn't follow one in standing up to these kinds of things and I understand that. This is why I implied that the entertainers themselves are going to have to realize they are a big part of the problem. Nothing you or I do is going to change it, but in the long run if this economy continues to slide they will hang themselves. It just makes me sick to see a guy like Manny Ramirez out here fussing over a 40 million dollar contract. I know he is an somewhat extreme example of this, but many of these athletes are the same way behind the scenes.

Putnam
03-19-2009, 06:59 PM
Well, Taterhead, I guess this has gone on long enough.

You and I aren't going to agree and you evidently know much more about the Indianapolis economy living in Arizona than any of us who actually live here and get paid to study the Indianapolis economy do.

Bball
03-19-2009, 07:24 PM
Before anyone gets too far afield here, the comments about players earning too much money is based on the thought that the NBA has teams losing money and that to even pay the salaries they do it is at least based in part on taxpayer subsidies to the team owners.

IOW... if all government money was pulled out of the NBA tomorrow and owners had to pay leases at market value and survive solely off the gate and TV contract, would the players still be 'worth' as much as they are currently being paid?

Nobody is saying that players shouldn't get paid what the market will bear, but they are saying that market shouldn't be rigged and skewed. Or basically, the (some) players are actually being paid MORE than the market can truly bear. There's little comparison with big name actors because it is more a pure market, although some mega stars will sometimes work for peanuts on low budget projects if they feel it is a worthwhile cause. And even if an actor can demand 20 million, if his movies start flopping his star will dim and he won't get 20 million in the future. And if the movie biz as a whole takes a downturn at the box office, he'll find it harder to get his going rate for very long.

Meanwhile, NBA players are locked in for their contract regardless of performance or the league's gate and tv performance. The NBA cannot react quickly to downturns or problems, and because of taxpayer subsidies they react even more slowly than they otherwise would have to.

Also, for the good of the league, keeping ticket prices very reasonable, even in areas below the balcony, is a solid growth strategy (IMO). Just because tickets sell good for some teams on a hot streak, it's not sustainable long term. Owners and players alike need to realize that.

DC 38
03-19-2009, 07:30 PM
I don't think that analogy works. The impact of losing thousands of good paying jobs far outweighs anything the Pacers provide financially to the city of Indianapolis.

I think before the city does anything, they should bring in some independent consultants to analyze the cost / benefit to the city. I don't think the CIB or local politicians are competent and non-biased enough to make this decision.

The key point I was making was the public/private statement. Let me first say, I am not exactly supportive of any city using my tax dollars to pay for a pro sports venues when my streets are in terrible shape and my alley is quite literally falling apart.

At any rate, Eli Lilly and the Pacers are both private entities that the city of Indianapolis does not "own." While losing Eli Lilly will obviously be a huge hit to this city's economy; if you are making the argument we should not use tax dollars to pay for the Colts or Pacers if they threaten to leave town because they are "private" companies, the same is true of Eli Lilly.

Both provide jobs, both provide tax revenue, and both would hurt the city if one of them packed up and left (one more than other, but that is beside the point I am getting at). They are also both private companies that by most people's logic, should be allowed to leave town if they request use of public money to stay here.

SycamoreKen
03-19-2009, 09:47 PM
Before anyone gets too far afield here, the comments about players earning too much money is based on the thought that the NBA has teams losing money and that to even pay the salaries they do it is at least based in part on taxpayer subsidies to the team owners.

IOW... if all government money was pulled out of the NBA tomorrow and owners had to pay leases at market value and survive solely off the gate and TV contract, would the players still be 'worth' as much as they are currently being paid?

Nobody is saying that players shouldn't get paid what the market will bear, but they are saying that market shouldn't be rigged and skewed. Or basically, the (some) players are actually being paid MORE than the market can truly bear. There's little comparison with big name actors because it is more a pure market, although some mega stars will sometimes work for peanuts on low budget projects if they feel it is a worthwhile cause. And even if an actor can demand 20 million, if his movies start flopping his star will dim and he won't get 20 million in the future. And if the movie biz as a whole takes a downturn at the box office, he'll find it harder to get his going rate for very long.

Meanwhile, NBA players are locked in for their contract regardless of performance or the league's gate and tv performance. The NBA cannot react quickly to downturns or problems, and because of taxpayer subsidies they react even more slowly than they otherwise would have to.

Also, for the good of the league, keeping ticket prices very reasonable, even in areas below the balcony, is a solid growth strategy (IMO). Just because tickets sell good for some teams on a hot streak, it's not sustainable long term. Owners and players alike need to realize that.

I like what you are saying here. When i moved here to San Antonio in 1998 there was great concern that the Spurs might move to New Orlenes because of having to play in the Dome. They were looking to get a new arena which the locals were not to high on because, unlike Indy, the city did not have an NFL eam waiting to cut and run when they built it. Fortunatly for the Spurs and their fans, the title came in '99 and the new arena was built. Of course, the Spurs paid part of it with the rest coming from a hotel tax which works in a tourist city like ours.

As successful as the Spurs have been the past 10 seasons, they still have to work hard to sell tickets and make money. They are pushing really hard in getting season tickets reupped for next season, holding them to tha same price as thsi season. There have been fewer sell outs this year and more specials. Not to the extent of the Pacers, but still they are still working to keep it going. They may be making a profit, but thier principal owner, Holt of Holt Catapillar, has been making less money on the buisness side, so the Spurs will probably feel that as well.

It will be interesting to see what happens as Duncan and Manu get even older and the team slips back more. Unless the economic structure of the league is changed, I think they will struggle as well.

Indianapolis may have reached the point where they can't afford 2 pro teams, if they ever could. Remember, the Colts couldn't sell tickets when the Pacers were filling the building and now it is vice versa.

Someone mentioned Kansas City as a possible desitnation. How would a metro area of only 100,000 have the means to support 3 big league teams? Heck, the Royals are bottom dwellers because of the lack of money they get locally. One could argue the same with the Tampa/St. Pete area that has less than a million more people. Seattle seems to be the logical choice seeing how they are the largest metro area without a team, followed by San diego and St. Louis. But hose cities have issues as well with their current teams in other leagues.

By the way, i find it very interesting that Kansas City can keep a football team with a 30 year old stadium. Are the fans there just that rabid and the team that loyal?

HC
03-20-2009, 06:37 AM
I like what you are saying here. When i moved here to San Antonio in 1998 there was great concern that the Spurs might move to New Orlenes because of having to play in the Dome. They were looking to get a new arena which the locals were not to high on because, unlike Indy, the city did not have an NFL eam waiting to cut and run when they built it. Fortunatly for the Spurs and their fans, the title came in '99 and the new arena was built. Of course, the Spurs paid part of it with the rest coming from a hotel tax which works in a tourist city like ours.

As successful as the Spurs have been the past 10 seasons, they still have to work hard to sell tickets and make money. They are pushing really hard in getting season tickets reupped for next season, holding them to tha same price as thsi season. There have been fewer sell outs this year and more specials. Not to the extent of the Pacers, but still they are still working to keep it going. They may be making a profit, but thier principal owner, Holt of Holt Catapillar, has been making less money on the buisness side, so the Spurs will probably feel that as well.

It will be interesting to see what happens as Duncan and Manu get even older and the team slips back more. Unless the economic structure of the league is changed, I think they will struggle as well.

Indianapolis may have reached the point where they can't afford 2 pro teams, if they ever could. Remember, the Colts couldn't sell tickets when the Pacers were filling the building and now it is vice versa.

Someone mentioned Kansas City as a possible desitnation. How would a metro area of only 100,000 have the means to support 3 big league teams? Heck, the Royals are bottom dwellers because of the lack of money they get locally. One could argue the same with the Tampa/St. Pete area that has less than a million more people. Seattle seems to be the logical choice seeing how they are the largest metro area without a team, followed by San diego and St. Louis. But hose cities have issues as well with their current teams in other leagues.

By the way, i find it very interesting that Kansas City can keep a football team with a 30 year old stadium. Are the fans there just that rabid and the team that loyal?
I believe that Arrowhead is something like a landmark in those parts. It is more likely to be renovated than tore down.

MarionDeputy
03-20-2009, 08:25 AM
Are you sure?


Conseco Fieldhouse is public property.

The Simons agreed back in 1999 to manage and operate the facility for a fixed period of time. But Conseco is the CIB's property, and ultimately the CIB's responsibility.


The Simons have been paying the city's bills for them for 10 years. That doesn't mean those bills have become the moral responsibility of the Simons. Conseco is still public property.

The Simons have the right to open the deal now. The CIB agreed to review in 2009 back in 1999. They can't say "No" to that.

The city can't say "No" to its ultimate responsibility to own Conseco Fieldhouse.

It can say "No" to one or more particular new proposals that the Simons may offer. But the city cannot insist on the old agreement.

If they keep saying "No" to the best tenant and partner they could hope to find, they STILL incur all the costs. That is not what the taxpayers want.

Most tenants I've met pay rent.

Taterhead
03-20-2009, 09:53 AM
Well, Taterhead, I guess this has gone on long enough.

You and I aren't going to agree and you evidently know much more about the Indianapolis economy living in Arizona than any of us who actually live here and get paid to study the Indianapolis economy do.

Please don't insult my intelligence Putnam. I lived in Indianapolis for 27 years and operated my own marketing business for 5 of those and have a degree related to that. I'm not somebody that spouts off about things he knows absolutely nothing about, so please don't paint me that way. I am sure you are very good at your job, but I can also assure you there are people who do the exact same thing as you who wouldn't agree with your opinion on this matter. Interpretation is a funny thing. I didn't insult you in any of my posts, all I ask is for the same in return.



Anyways, I do apologize for getting too far off subject, even though I think it is closely related to the topic. I'm still not sure how it got classified as politics. But whatever.

Back to the subject at hand. I have to say BBall is hitting this right on the money. I don't think anyone is saying NBA players don't deserve market value. But the market itself is the problem. Specifically, the fact that they are paid their full salary regardless of what happens is the biggest flaw. That is unreasonable. What other business are the employees of that business making that much more than the owner and can't be given the ax?

So you either have to hold the owners solely responsible for their losses for spending out of their means. Or come to the conclusion that the NBA model is severely flawed and needs a major retooling. If the only way Indianapolis can compete with NY is to spend way out of their capability risking financial meltdown, then it is an unfair system. Either way the taxpayers shouldn't have to bear the burden of either. And a better question might be do you even want to care about a league in which that is the case? Sports is supposed to be about fair play.

Regardless of what you think of the deal for the Fieldhouse is in relation to the Colts deal for LOS, you have to at least admit that from a business perspective it is one heck of a favorable deal. And if you can't survive with out over spending in the best stadium in the league with that deal, then that is not the citizens problem. It's more about the importance of making a stand against wealthy welfare and demanding personal responsibility than worrying about the what ifs and might happens to me.

BillS
03-20-2009, 11:30 AM
Most tenants I've met pay rent.

Most tenants didn't pay to put up the building then hand it over to the landlord.

speakout4
03-20-2009, 07:13 PM
Putnam
400M divided by 89B is 0.004 or 0.4%. Just curious why this has been stated so many times and gone uncorrected.

Putnam
03-20-2009, 08:07 PM
Putnam
400M divided by 89B is 0.004 or 0.4%. Just curious why this has been stated so many times and gone uncorrected.

I clarified it immediately after I said it:


That is less than half of one percent.

alamo1978
03-21-2009, 08:46 PM
There is a new blog (it's not mine, I swear) with a great little write-up about the pacers moving (or not moving). The site is http://www.naptownsports.com . This guy hits the nail on the head.