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Thread: Pacers finances baffle me

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    Default Re: Pacers finances baffle me

    Quote Originally Posted by BillS View Post
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    Doesn't matter, the whole point of "average" is that if you multiply it by the total number of seats you get the same number as if you added up each seat's individual cost.
    Dollar-weighted average and average aren't the same.
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  3. #27
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    Default Re: Pacers finances baffle me

    Quote Originally Posted by BillS View Post
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    Doesn't matter, the whole point of "average" is that if you multiply it by the total number of seats you get the same number as if you added up each seat's individual cost.
    maybe i'm missing duke's point, but it does matter if you subscribe to the idea that certain entities are given tickets for nothing. that is a huge reason why community activist rally against new arenas and stadiums. the politico machine that makes it happen receives free tickets that hurt the bottom line. i also think it's very likely that PS&E manipulates revenue. if you could make more money, why wouldn't you?

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    Default Re: Pacers finances baffle me

    Quote Originally Posted by ChicagoJ View Post
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    Dollar-weighted average and average aren't the same.
    So is Putnam wrong to be multiplying the rough average of $30 per ticket times the average attendance times the number of home games?

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    Default Re: Pacers finances baffle me

    Quote Originally Posted by ChicagoJ View Post
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    Dollar-weighted average and average aren't the same.
    Granted it has been many years since I flunked statistics, but "dollar weighted average cost" doesn't make sense to me. Something like "dollar weighted attendance" might.
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  7. #30
    NaptownSeth is all feel Naptown_Seth's Avatar
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    Default Re: Pacers finances baffle me

    Shortening the season would make each game more of an event, and more of a money-drawer. That is why football is more successful, less games.
    That's not true, at least by attendance. The NFL makes most of the money on TV. It's more successful because of the nature of the sport, the culture of the sport (including fantasy football and gambling), and how well it plays on TV. Football is NOT more successful in other countries, for example, no matter how many games there are.

    The Colts couldn't even sell out every game (by TV cutoff) of 2003 - the heart of Peyton/Harrison/Edge/Wayne/Freney era. And right now plenty of NFL teams have gaping holes in the stands just like Indy did only 10 or so years ago. 1993 vs the Jets, you think that RCA crowd was packed in?



    I doubt people will be ponying up $40-$50 per seat to sit up in the upper balcony for 20 games a season.
    Exactly. To me this is just like MLB interleague. When it's the Yanks, Phillies, Sox and Mets coming to town it's great. When it's the Indians and Pirates is it really helping ticket sales?

    The Cavs and Lakers game was packed. But for the Bucks game there had to be 10 empty seats on the FRONT row.


    I do know that some teams have started working with a tiered pricing system where some games cost more than others, and I think the Cubs are going to a system where for a premium you can buy into games ahead of other fans. Basically the team undermining the scalpers and bringing those premium ticket profits back in house.



    On top of all of this, we have some idea of league revenue because the freaking CBA sets the cap against it. Last time I checked teams weren't asking players to pay to play.

    If teams are really losing 20-30m a year, think about the amount of player salary cuts that would require. Also you'd have to question how they fixed that salary % so poorly against total revenue that they are losing money.

    I mean salary is a percent of what they bring in, so no matter how much or little that is the teams agreed to run the REST of the operation on the remaining PCT, not some fixed amount. So now 43% is nowhere near enough to cover all the other expenses? The cap has only now started to go down, so how were they making less money in 2003 than 1998 when the cap says that revenue continued to increase?
    Last edited by Naptown_Seth; 03-08-2010 at 03:25 PM.

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    Default Re: Pacers finances baffle me

    Quote Originally Posted by Naptown_Seth View Post
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    I do know that some teams have started working with a tiered pricing system where some games cost more than others, and I think the Cubs are going to a system where for a premium you can buy into games ahead of other fans. Basically the team undermining the scalpers and bringing those premium ticket profits back in house.
    The Cubs have been charging extra for 'premium' games for years now, I think this system could definitely work in the NBA too.

    I'd like to see the amount of regular season games go down, but while this may increase attendance per game I don't think it will increase overall revenue because as others have said, people aren't going to be willing to pay that much more for tickets. In my opinion the quickest solution to this problem would be to lower the players' salaries in the new CBA.

  9. #32

    Default Re: Pacers finances baffle me

    Quote Originally Posted by Hicks View Post
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    So is Putnam wrong to be multiplying the rough average of $30 per ticket times the average attendance times the number of home games?

    Maybe I am. I took it to mean the average price of tickets sold, but it might mean the average price of all seats available. The source (linked in the OP) doesn't say clearly what it is.

    But I don't think it would make all that much difference. It is not like all the cheap seats tgo empty while devout fans are clamoring to pay premiums for courtside. The "sea of green" isn't all at the top, not all at the bottom, is it? I observe empty seats at all levels, but guys who go to most games can correct me if I'm wrong.
    And I won't be here to see the day
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  10. #33
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    Default Re: Pacers finances baffle me

    Quote Originally Posted by Putnam View Post
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    Maybe I am. I took it to mean the average price of tickets sold, but it might mean the average price of all seats available. The source (linked in the OP) doesn't say clearly what it is.

    But I don't think it would make all that much difference. It is not like all the cheap seats tgo empty while devout fans are clamoring to pay premiums for courtside. The "sea of green" isn't all at the top, not all at the bottom, is it? I observe empty seats at all levels, but guys who go to most games can correct me if I'm wrong.
    That's what I was getting at.

    Average ticket price, I believe, is based on the inventory of seats available to the games.

    (There are X number of $yyy seats, Y number of $zz seats, etc.)

    But total revenue/ quantity of seats sold probably won't equal the average from the calculation above. If it does, it is probably coincidence that the seats were sold in the same proportion as the inventory of seats. And I'm 99.9% certain this is in the portion of financial data that is never even going to be disclosed to minority owners of the teams, let alone the general public.

    We do the same thing with the airline business. With all the different pricing schemes and the way prices increase as the date of the flight gets closer, the average price per seat actually flown and the average price of available seats are not the same metric.
    Why do the things that we treasure most, slip away in time
    Till to the music we grow deaf, to God's beauty blind
    Why do the things that connect us slowly pull us apart?
    Till we fall away in our own darkness, a stranger to our own hearts
    And life itself, rushing over me
    Life itself, the wind in black elms,
    Life itself in your heart and in your eyes, I can't make it without you


  11. #34

    Default Re: Pacers finances baffle me

    Whether my initial assumption is correct or not depends on the meaning of the source. In any case, the value given can't be weighted unless we know how many of each price seats are sold and, as Jay says, they don't tell us that. For lack of perfect information, I'll argue that ticket sales revenue is approximated by the estimate I gave.

    The point stands under any realistic estimate. The gap between ticket sales and payroll is huge. If the Pacers sold out every seat for every game, that would be 18,345 x 41 = 752,145 seats.

    To raise $66.7 million to pay the payroll, those tickets would have to average $88.67 per ticket. Do they? Not by a mile. and every empty seat widen the deficiency further.

    ----

    Clearly, ticket sales doesn't come close to paying the payroll, and Bills says as much. The next big source of revenue is TV, and Uncle Buck says that is about $40m today. (For the Pacers? Or all NBA teams?)

    The other streams of revenue are concessions, and those have to be pretty small. Count55 tells us that a lot of the advertising in the arena are trade-outs and common sense suggests PS&E can't sell a sign that's going to be seen by 12,000 fans on 41 nights for as much as what a billboard that will be seen by 200,000 motorists five days a week can cost.

    So that leaves the source Duke mentions: corporate sponsorships. If WellPoint and Lilly and RollsRoyce and Allison and SallieMae and others are making up most of the apparent deficiency, PS&E may be just about the biggest charity recipient in Indianapolis.


    Here's the point:

    As basketball, the NBA is unparalleled.
    As entertainment, the NBA is an attractive but flawed product.
    But as a business, the NBA is a disaster.



    .
    Last edited by Putnam; 03-08-2010 at 05:41 PM.
    And I won't be here to see the day
    It all dries up and blows away
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    But they never had much use for me
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  13. #35
    Administrator Roaming Gnome's Avatar
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    Default Re: Pacers finances baffle me

    Quote Originally Posted by chrisjacobs7 View Post
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    The Cubs have been charging extra for 'premium' games for years now, I think this system could definitely work in the NBA too.

    I'd like to see the amount of regular season games go down, but while this may increase attendance per game I don't think it will increase overall revenue because as others have said, people aren't going to be willing to pay that much more for tickets. In my opinion the quickest solution to this problem would be to lower the players' salaries in the new CBA.
    Actually, the Pacers already have a tier system for "premium games" for this current season. If you look at the folding schedule, you'll notice that certain home games have an asterisk that indicates that game is a "premium game" and it leads to another price chart.

    Fortunately, Season ticket holders were not subject to this pricing.
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    Default Re: Pacers finances baffle me

    Quote Originally Posted by count55 View Post
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    meh...everything I wrote was oversimplified and based on not enough info.

    This doesn't answer all the questions, but JayRedd's podcast with Larry Coon is a fascinating look.

    http://www.bothteamsplayedhard.net/2...ent=FeedBurner
    Yeah, pretty good. Coon is probably right: it's all about the bargaining power and the owners have enough to force down the salaries to the point that every franchise - even a losing, badly managed, excessively leveraged, within a small media market franchise - becomes profitable. And the middle-of-the-class guys will probably trade most of the cost to superstars, stars and future rookies. Players were unlucky, they should have renegotiated the CBA 2 years ago.

    I think the owners may be short-sighted following that strategy.

    Quote Originally Posted by Naptown_Seth View Post
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    I do know that some teams have started working with a tiered pricing system where some games cost more than others, and I think the Cubs are going to a system where for a premium you can buy into games ahead of other fans. Basically the team undermining the scalpers and bringing those premium ticket profits back in house.
    I remember the Blazers instituting variable pricing at the start of last season and that causing a big uproar among their fans. I was very surprised, maybe because here tiered prices are the default situation. It seems like a no-brainer to me.

    Quote Originally Posted by Putnam View Post
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    Whether my initial assumption is correct or not depends on the meaning of the source. In any case, the value given can't be weighted unless we know how many of each price seats are sold and, as Jay says, they don't tell us that. For lack of perfect information, I'll argue that ticket sales revenue is approximated by the estimate I gave.

    The point stands under any realistic estimate. The gap between ticket sales and payroll is huge. If the Pacers sold out every seat for every game, that would be 18,345 x 41 = 752,145 seats.

    To raise $66.7 million to pay the payroll, those tickets would have to average $88.67 per ticket. Do they? Not by a mile. and every empty seat widen the deficiency further.

    ----

    Clearly, ticket sales doesn't come close to paying the payroll, and Bills says as much. The next big source of revenue is TV, and Uncle Buck says that is about $40m today. (For the Pacers? Or all NBA teams?)

    The other streams of revenue are concessions, and those have to be pretty small. Count55 tells us that a lot of the advertising in the arena are trade-outs and common sense suggests PS&E can't sell a sign that's going to be seen by 12,000 fans on 41 nights for as much as what a billboard that will be seen by 200,000 motorists five days a week can cost.

    So that leaves the source Duke mentions: corporate sponsorships. If WellPoint and Lilly and RollsRoyce and Allison and SallieMae and others are making up most of the apparent deficiency, PS&E may be just about the biggest charity recipient in Indianapolis.


    Here's the point:

    As basketball, the NBA is unparalleled.
    As entertainment, the NBA is an attractive but flawed product.
    But as a business, the NBA is a disaster.

    .
    The Pacers aren't the NBA and they aren't representative of the average NBA franchise from a financial and economic perspective (pretty much like 2010 isn't a representative year for the entertainment industry).

    And the TV revenues for the league are above $900 millions per year. You're also forgetting stuff like merchandising, parking, naming rights (how much per season do the Pacers get from the arena naming rights?) , revenue sharing (it was increased to $50 millions awhile ago, the Pacers certainly get a fair part of that money - probably +$6 millions per season),

    What's the NBA current credit rating? IIRC, it used to be pretty strong, a BBB+ or something, even after the financial crisis.

    In any case, the current CBA and the way it regulates the players salary - with a mechanism that maintains personnel costs at a targeted percentage of the revenues - is extremely favourable for the NBA from a business perspective. So favourable that I suspect many individual teams don't have much incentive to cut wasteful spending - if I were Derek Fisher I'd be very interest in finding out the evolution of the GMs/FO staff salaries in the last 5 years (the fact that for many owners economic and financial efficiency isn't a priority is another contributing factor).
    Last edited by cordobes; 03-08-2010 at 07:34 PM.

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    NaptownSeth is all feel Naptown_Seth's Avatar
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    Default Re: Pacers finances baffle me

    Jay and Putty, my post was about exactly your discussion. And my point to Duke is that if anything your math might be showing more revenue rather than less.

    But ultimately my engineering sense says that your math is basically a solid estimation start. I think the weighted average per ticket sale is significantly lower than the average ticket price, due to promotions, STH discounts, and where the empty seats are.



    One thing on the tiered pricing, looking back I really couldn't have cared less about going to the Cavs game. I've seen Lebron upclose before, ditto Shaq. But I could have sold those seats for enough to offset some of my cost. Say I do the same for the Magic game too and I could have cut my cost back by 15% or so, just by giving up 2 games.

    The Pacers could benefit from that by having me pass on those tickets, thus allowing them to sell them to the high demand market. I get my cheaper "HST" package without those premiere games and the Pacers still get the full income from the higher price point.

    Actually I did this last year when I took them up on the "11 games for 8" mini which basically featured mostly poor opponents on weeknight games. I'm going for the Pacers so I was happy to pay less to see the Pacers just as much. Meanwhile the people that wanted the FRI/SAT night games and the stars paid more.

    Basically that's a simple tier system.

    oh, RG already followed up on this...
    Quote Originally Posted by Gnome
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    Actually, the Pacers already have a tier system for "premium games" for this current season. If you look at the folding schedule, you'll notice that certain home games have an asterisk that indicates that game is a "premium game" and it leads to another price chart.

    Fortunately, Season ticket holders were not subject to this pricing.
    Last edited by Naptown_Seth; 03-08-2010 at 10:42 PM.

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    Default Re: Pacers finances baffle me

    Psssttt...



    we are geeks

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  18. #39
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    Default Re: Pacers finances baffle me

    My further participation in this thread is risky.

    You're way off on the allocation of league TV money, and other league allocated revenue (licensing, international, etc.)

    As for the other sources of revenue -- local radio/ tv, in-arena advertising, concessions, naming rights, etc, that's a wild guess.

    However, I don't recall the terms of this agreement but its not unusual to find that the arena operating company has the first claim on priority seating revenue (e.g., club level)/ suite rental revenue as that is generally the revenue that backs the bonds for the new arena.

    I'm done. With that I've now said way too much on this topic.

    Putty, your general premise is right. Its hard for the blue-and-gold to break even when everything is going well. Years ago it was published that the extra revenue from the second round of the playoffs was the difference between break even and a profit. Attendance is down in quantity, and yield (ticket price) is down, too. Local tv (and presumably local radio) ratings and revenue are down. And there's no playoff revenue. Its gotta be ugly!
    Why do the things that we treasure most, slip away in time
    Till to the music we grow deaf, to God's beauty blind
    Why do the things that connect us slowly pull us apart?
    Till we fall away in our own darkness, a stranger to our own hearts
    And life itself, rushing over me
    Life itself, the wind in black elms,
    Life itself in your heart and in your eyes, I can't make it without you


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  20. #40

    Default Re: Pacers finances baffle me

    One thing to remember is 6.7 M of Pacers salaries (roughly 10% of a players salary) goes into a fund to make sure the team (players) only receive 57% of income. Not sure if coaches, Bird and other front office personnel have to abide by this but I doubt it because they are not in the players union.
    "He wanted to get to that money time. Time when the hardware was on the table. That's when Roger was going to show up. So all we needed to do was stay close"
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  21. #41

    Default Re: Pacers finances baffle me

    Thanks to everybody who's voiced a thought here. Most of us don't know very precisely what we are saying, while Jay knows pretty exactly and cannot disclose it.

    Cordobes mentions naming rights as another asset. But isn't that another form of sponsorship? Of charity? The city paid for the building and FA Wilhelm built it. Conseco generated real profit brokering insurance so it could afford to pay for the sponsorship. But the Pacers get to keep the money. To me, that puts the Pacers in the same category as a cub scout troop or any other beneficiary of charity.

    So, admitting variation, we can all agree that the actual product of the NBA (ticket sales, TV deals, and memorabilia) doesn't come close to paying the costs of operations. The league stays viable because of public and corporate largesse.


    .
    And I won't be here to see the day
    It all dries up and blows away
    I'd hang around just to see
    But they never had much use for me
    In Levelland. (James McMurtry)

  22. #42
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    Default Re: Pacers finances baffle me

    Quote Originally Posted by Putnam View Post
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    Thanks to everybody who's voiced a thought here. Most of us don't know very precisely what we are saying, while Jay knows pretty exactly and cannot disclose it.

    Cordobes mentions naming rights as another asset. But isn't that another form of sponsorship? Of charity? The city paid for the building and FA Wilhelm built it. Conseco generated real profit brokering insurance so it could afford to pay for the sponsorship. But the Pacers get to keep the money. To me, that puts the Pacers in the same category as a cub scout troop or any other beneficiary of charity.

    So, admitting variation, we can all agree that the actual product of the NBA (ticket sales, TV deals, and memorabilia) doesn't come close to paying the costs of operations. The league stays viable because of public and corporate largesse.


    .
    So, wait - anyone accepting advertising as a major part of their revenue stream is a charity? Anyone operating a building owned by someone else who gets revenue from advertising on that building is a charity? I think you are stretching things to try to denigrate the Pacers as a business.

    By the way, the city did NOT pay 100% for the Fieldhouse. At the time, the evil greedy self-serving Simon brothers paid more toward the new arena than had been done by any franchise in recent times. And that was without a payment from the city backing it up.
    BillS

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  23. #43
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    Default Re: Pacers finances baffle me

    Quote Originally Posted by Putnam View Post
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    The next big source of revenue is TV, and Uncle Buck says that is about $40m today. (For the Pacers? Or all NBA teams?)

    .
    Yes each NBA team gets the exact same amount of money from the national TV package. (Don't forget though that the pacers have to pay the old owners of the St. Louis ABA team a % of the TV money - I think that is about 4m per year now)

    I remember reading that back in the first couple of years at Conseco the pacers would gross almost $1M per home game. That of course doesn't account for game expenses. But that is ticket sales, parking, concessions,......I would guess that is cut in half now from lower ticket prices, lack of ticket sales......

  24. #44

    Default Re: Pacers finances baffle me

    Quote Originally Posted by BillS View Post
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    So, wait - anyone accepting advertising as a major part of their revenue stream is a charity? Anyone operating a building owned by someone else who gets revenue from advertising on that building is a charity?
    No, I don't agree advertising/naming rights/sponsoring can be qualified as charity either. If so, every professional sports enterprise leaves of charity - as well as every newspaper. Or Google. There are lots of industries out there that rely heavily on income from corporate sponsorship.

    Advertising and sponsoring creates value. Sports sponsorships create a very specific and particular kind of value - it's often more about image enhancement and brand awareness than direct impact on sales; it's more about long-term impact than short-term impact. There's plenty of peer-reviewed literature about this issue (there's even a publication dedicated to it: http://www.imrpublications.com/journ...x?volno=L&no=L )

    Obviously, sponsors can make mistakes assessing the benefits and gains of sponsorships, but such lapses are generally called decision-making errors, not charity.

    The transfers of money by politicians is a more complex issue. If government handouts for private industries didn't exist, the taxation on players would be much smaller - so the labour cost would diminish quite a bit. Basketball consumers would possibly have more money to spend in ball games as well. This kind of economic calculation is just too complex to be made.

    In any case, I'm not convinced that even a franchise facing very difficult circumstances like the Pacers doesn't generate enough revenue to "come close to paying the costs of operations", unless I'm misunderstanding what you mean by "costs of operations". Forbes Mag. pointed to a -$15M deficit in operating income, but after reading the link provided by graphic-er I have some doubts about this number.

    Still, even though the Pacers are surely haemorrhaging a few millions per year, I still don't understand why Putman equates the Pacers to the NBA and extrapolates from the current situation of the Pacers to the viability of the NBA business model. 1) In times of slow economic growth+low consumer expectations the entertainment business (or parts of it, including pro sports), tend to suffer disproportionately. 2) the Pacers aren't the prototypical NBA franchise.

    An analogy would be using the Lakers economics in the moment of a bullish economy + a title run with a team filled with future HoFers and call the NBA one of the most profitable businesses in the history of the Western Civilization.
    Last edited by cordobes; 03-09-2010 at 06:25 PM.

  25. #45

    Default Re: Pacers finances baffle me

    Quote Originally Posted by cordobes View Post
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    I still don't understand why Putman equates the Pacers to the NBA and extrapolates from the current situation of the Pacers to the viability of the NBA business model.
    I'm getting it from Bill Simmons:

    Quote Originally Posted by Simmons
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    As a failing business -- and, really, a league that loses $400 million in a single year has to qualify as "failing"
    It isn't just the Pacers, it is the whole league. I've used the Pacers for examples, but the problem is league-wide.

    As to the argument that this is just a bad year, a viable business ought to be able to trim its costs in bad times. The NBA can't. It is inflexible, like General Motors was before it went bankrupt. That, again, shows me that the NBA business model is flawed.

    If he were here now, looking at the way things are, I imagine Red Auerbach would agree, don't you?
    And I won't be here to see the day
    It all dries up and blows away
    I'd hang around just to see
    But they never had much use for me
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  26. #46

    Default Re: Pacers finances baffle me

    Quote Originally Posted by Putnam View Post
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    Does anybody here work in advertising? What would you pay for an illuminated sign inside Conseco Fieldhouse?
    I work in online advertising but I've got a pretty good idea on what local costs are for other media. I'll give a general idea of cost and my guess on ad revenue the Pacers make. It's good to know that costs can vary significantly for the same ad because of frequency, total spend, media trades, etc.

    Billboard: $2000.00 / month

    Radio Spots: $500 - $10,000.00+ per month (Bob and Tom are the most expensive spots in this market) .

    Newspaper Ads: You pay per square inch. Depends on circulation. A small ad can cost less than $100.00 and a full page would be in the $4K - $7K range.

    TV: I was surprised when I learned how inexpensive commercials costs. Cable costs less and you can target geographic areas around the city. A cable ad can run $500 - $1000 per month. I've not heard a quote for the network stations but I think they can be quite a bit higher, even when it's just local.

    Pacer's Advertising Guesses

    Billboards around Conseco: I can't see an advertiser spend more than $250.00 - $500.00 per day (looking at it with 365 days in mind since people will see the ads during other events). My guess is $100,000 on average for the year.

    Suites: I assume the cost of the suites are based on the seats they include. $2000.00 - $4000.00 per game plus costs to keep it stocked.

    Krieg Devault Level: I drove by their building this afternoon and wondered what they pay for the naming rights to the club level (I don't know if they even still sponsor it this season). The back page of the Yellow Pages cost around $200K and I heard that large law firms don't mind paying that much because it only takes one client to win a huge lawsuit. They could spend $200K - $400K for the year to sponsor the club level.

    There's also score table / scoreboard ads, Mountain Dew/ Pepsi Section, ads in the programs, ads on the free items they give out (great clips jerseys), discounts at stores for winning, companies paying to be the one who gets to donate money to charities for hitting 3's, etc. Companies pay to sponsor all these things.

    Hope this helps.

  27. The Following User Says Thank You to RandyWrinkles For This Useful Post:


  28. #47

    Default Re: Pacers finances baffle me

    I've often wondered how the Pacers could ever make a profit given the small market in which they operate. There is charity involved here and that is the charity that allows this franchise to play in Indy subsidized by the Simons.

    This thread has been most interesting and I thank all (including geeks) for their astute insights.

  29. #48

    Default Re: Pacers finances baffle me

    Quote Originally Posted by Putnam View Post
    This quote is hidden because you are ignoring this member. Show Quote
    I'm getting it from Bill Simmons:



    It isn't just the Pacers, it is the whole league. I've used the Pacers for examples, but the problem is league-wide.
    I wouldn't put much stock in what Stern is saying about the NBA economic situation while the table for the CBA negotiations is being set. That's a projection and they often get projections wrong. For example, in the off-season they were projecting ticket revenue to be down by 7% this season; by January the ticket revenue was down by 1.7%.

    Every year the Forbes Magazine elaborates a study about the economic/financial situation of the NBA. I'll wait for the next one. What records tell us is that years where the league revenue decreases are an extremely rare occurrence.

    More importantly, one year (or 2, or 3) of losses doesn't mean a business isn't viable. If that was true, entrepreneurship and investment would be long buried concepts. The idea that a business is only successful if it presents a profit every year is amusing.

    As to the argument that this is just a bad year, a viable business ought to be able to trim its costs in bad times. The NBA can't. It is inflexible, like General Motors was before it went bankrupt. That, again, shows me that the NBA business model is flawed.
    The major component of the cost structure of the NBA is the players salary.

    The players salary has a cap - it can't surpass about half of the revenue generated.

    How exactly is this inflexible to you? As I missing something here? I wish my business had this kind of flexibility.

    Can you provide an example of a non-failing business? I'm really curious.

    If he were here now, looking at the way things are, I imagine Red Auerbach would agree, don't you?
    Certainly not.

  30. #49

    Default Re: Pacers finances baffle me

    Quote Originally Posted by BillS View Post
    This quote is hidden because you are ignoring this member. Show Quote
    So, wait - anyone accepting advertising as a major part of their revenue stream is a charity? Anyone operating a building owned by someone else who gets revenue from advertising on that building is a charity?
    No, not "any" such case is charity. I won't say every one is, but many are.

    If I were a farmer, I would plan to break even on my crops and livestock, without counting on the money from a "Chew Mail Pouch" sign to pay the bills. But even if I did that, I surely wouldn't ask my neighbor to build a barn for me to paint "Chew Mail Pouch" on.

    I don't know the details of the Pacers deal with the city for Conseco Fieldhouse. I hope the Pacers will get a good deal in the renegotiation, but it is a pity that the team and the city have to wrangle over the deal at this time.

    By the way, I strongly approve of the Simons. I hope you didn't call them "evil, greedy, self-serving" in parody of me.


    Finally, I don't know why we're arguing about this. David Stern says costs are out of whack and the league needs an overhaul.



    .
    And I won't be here to see the day
    It all dries up and blows away
    I'd hang around just to see
    But they never had much use for me
    In Levelland. (James McMurtry)

  31. #50

    Default Re: Pacers finances baffle me

    Quote Originally Posted by cordobes
    This quote is hidden because you are ignoring this member. Show Quote
    I wouldn't put much stock in what Stern is saying about the NBA economic situation while the table for the CBA negotiations is being set.
    I guess there's no sense in our trying to agree on the details if we don't agree there is a fundamental problem.

    I respect the heck out of your understanding, but in this case I'm going to remain skeptical.



    .
    And I won't be here to see the day
    It all dries up and blows away
    I'd hang around just to see
    But they never had much use for me
    In Levelland. (James McMurtry)

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