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Thread: Brief Forbes article discussing how much Simon could get for the Pacers

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by Roaming Gnome View Post
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    I believe that Mel Simon sold/gave his share of the team to Herb while Mel was in poor health. I believe that there are no entanglements with the Mel Simon estate in regards to the Pacers.
    I hope you are right.

    I am speculating here, but I am not so sure.

    Depending on how that transfer was structured, the IRS could come back and say that the Simon's were attempting to avoid paying estate taxes by transferring Mel's share to Herb, especially if the IRS decides that the transfer was for less than what would have been fair market value at the time of the transaction.

    If the transfer happened after Mel was in poor health, the IRS could come back and say that the difference between what Herb paid, if anything, and the actual market value of Mel's share at the time of the transaction would have been subject to whatever Gift Tax was in effect at the time of the transaction.

    The IRS can be very sticky about Estate and Gift taxes. Historically, they are amongst the highest percentage taxes that are ever collected, even though they are significantly less at this point than they have been in a very long time, but Mel's estate likely still is liable for them in general, whether his share of the Pacers is directly involved or not. As a result, I beleive that the IRS will look for every penny it can get and will investigate thoroughly, including transactions that occurred after Mel's health declined.

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by Smoothdave1 View Post
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    The article is incorrect as it appears Conseco has a few more suites than what that article suggests. I found an NBA.com site that suggests that there are 69 suites, plus two additional hospitality suites. http://hoopedia.nba.com/index.php?ti...eco_Fieldhouse 69+2=71 suites. Furthermore, Conseco has about 2400 club seats versus 1500 in the Sprint Center.

    Comparing the Dallas and Indy market is like comparing Apples and Oranges. Dallas is one of the 10 largest cities and metro areas in the country. Plus, the arena is also shared with the NHL team (Stars), so I would expect them to have a lot more suites than Conseco.

    If you want to measure comparable arenas, let's look at cities like Charlotte, San Antonio, Orlando, Portland, New Orleans, Memphis, Milwaukee, Oklahoma City, Cleveland, etc.

    Here's the breakdown of what I could find as far as suites in these other cities that I referenced:

    -- Charlotte (Time Warner Cable Arena) Opened in 2005 w/ 51 suites
    -- San Antonio (AT&T Center) Opened in 2002 w/ 50 suites
    -- Orlando (Amway Arena) Opened in 1989 w/ 26 suites
    -- Portland (Rose Garden) Opened in 1995 w/ 70 suites
    -- New Orleans (NO Arena) Opened in 1999 w/ 44 Suites
    -- Memphis (FedEx Forum) Opened in 2004 with 75 suites
    -- Milwaukee (Bradley Arena) Opened in 1988 w/ 68 Suites
    -- OKC (Ford Center) Opened in 2002 w/ 56 suites
    -- Cleveland (Quicken Loans Arena) Opened in 1994 w/92 suites

    *** Magic are opening up a new arena this fall w/ 60 suites

    As you can see, there are several cities very comparable to Indy that have newer arenas with fewer luxury suites. Several cities with similar populations and demographics to Indy (San Antonio, Charlotte, Orlando) have or are opening new arenas after Conseco was built with fewer suites. Cities like New Orleans and OKC landed their teams after building their arenas.

    Cities like LA, Dallas, Chicago, Boston, Houston, NY, Miami, etc. are some of the largest cities in the country with a strong corporate base, greater populations, etc. than Indy. It only makes sense that their arenas house a larger number of suites.

    In areas like Sacramento and Charlotte previously, those arenas were and are not located downtown and had/have such a small number of suites. I had gone to the Charlotte Coliseum before it was torn down and it's way out in a suburb and only housed 12 suites, despite being built in 1988. To put this into perspective, Market Square Arena was opened in 1974 with 36 suites. An Arena like Arco in Sacramento is also located off the beaten path.

    Kansas City may have a newer arena, but they also have the Chiefs and Royals. I don't know if there's enough corporate support there for a 3rd professional team from one of the Big 4. Plus, KC also has an MLS team too.

    A team like Sacramento is more likely to move before Indy does. Yes, the Pacers may potentially be up for sale, but I expect the Simon family will try and find an owner -- whether local or not -- who wants to keep the team in Indy!

    The author of this article saw the blurb on the Pacers from Forbes and decides to float a story out there that is not true.
    This was better researched and written than the original article. Nice work.

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by Brad8888 View Post
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    Depending on how that transfer was structured, the IRS could come back and say that the Simon's were attempting to avoid paying estate taxes by transferring Mel's share to Herb, especially if the IRS decides that the transfer was for less than what would have been fair market value at the time of the transaction.
    One would certainly hope that a family whose livelihood depends on the ins and outs of property transfer would have thoroughly checked into this and dotted all the i's and crossed the t's before moving forward.
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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Two things:

    First, if Market Square Arena had 36 suites, where were they at? I don't ever remember seeing them, and if I remember the seating arrangement, it seems hard to picture where they might have been.

    Second, the financial trouble the Pacers are in is pretty much their own fault. They are the ones who wanted full control of the arena because they wanted all the profits. The operating costs are a lot easier to swallow when you've got a championship caliber team selling out the place every game. For them to want the taxpayer's to foot the difference is mind boggling to me. If that's the case, when the team does turn a profit again, they better be asking where to send the taxpayer's portion. I'm so done with professional franchises blaming their financial problems on outdated arenas, bad fan bases, and economic crisis. It's the real world, deal with it.

    BTW, the Pacers saying they lost 30 million over the first two years of Conseco Fieldhouse operation sounds like complete BS to me and I almost jumped off the bandwagon when that report came out. What do they take us for? Fools?

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    MSA didn't have any suites. It was built in an era and an area where luxury boxes didn't need to exist.

  7. #31

    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Yeah, what always bothered me about this is that the Pacers even lost money when they sold out every game and went to the finals....If that is the case how could they EVER make money....

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by threein73 View Post
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    Yeah, what always bothered me about this is that the Pacers even lost money when they sold out every game and went to the finals....If that is the case how could they EVER make money....
    The idea behind pro sports ownership (and those ideas are starting to change if they haven't already) was that they are, first of all, toys for really rich guys. And that certainly is the case for a lot of wealthy sports owners.

    But as for making money, many owners would always be OK with operating at manageable losses season by season because the idea was that they would make all that money back (and more) when they eventually sold the team. So you wouldn't make money actually owning the team, you'd make money by eventually selling it. The idea is that once you buy the team, the value of the team itself will increase and that's where your money making comes from.

    And that certainly will be the case for the Simons seeing as that they bought the team for a fraction of the cost that they can sell it at now. Of course, that doesn't apply to guys like Bob Johnson, who is going to take a big loss after selling the team to Jordan for much less than the $300M franchising fee he paid to join the league.

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    So by d_c's method, buying a sports team is like buying stock? Sell high, eh?

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by duke dynamite View Post
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    So by d_c's method, buying a sports team is like buying stock? Sell high, eh?
    More like a rental property in a boom market. You don't mind if it only gets rented 10 months a year, because the minor loss there is made up for by the rising value of the property. Once the bubble bursts, though...
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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by BillS View Post
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    One would certainly hope that a family whose livelihood depends on the ins and outs of property transfer would have thoroughly checked into this and dotted all the i's and crossed the t's before moving forward.
    I agree that it is extremely likely that they would have, but the IRS will still look into it if they think there is any small chance of collection of additional taxes from a very large estate to make absolutely sure that every i and t are indeed dotted and crossed appropriately, and that could take a long time.

    I was the executor of my father's estate after his passing in 2001 and it took the IRS until early 2005 to finally accept values that my attorney and accountant and I presented, with only one relatively minor discrepancy that probably paid for one employee's time for the duration of their determination period, and that was on an estate that would be roughly pocket change compared to the Mel Simon estate, and that was with no other challenges from any beneficiaries or creditors to compound the issue, and no transfers whatsoever to cloud the issue.

    The delay with my father's estate could have partially been relative incompetency on the part of my attorney, or a profit motivation on his part to somehow delay the IRS process to encourage friction amongst the beneficiaries, but I don't think so. He was a full partner in a relatively large law firm in my area that has been in business for a very long time, with the hourly rates to prove it.

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Actually... IS there really a way for partners to transfer ownership of an entity like the Pacers when at least one of the partners is elderly, let alone sick, that wouldn't trigger IRS scrutiny? ...Especially if that partner died shortly thereafter?
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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    This is why we can't be lottery bound for 5 years. The Sonics were and look where that landed them.

    Corporations are not as frugal as they once were. With the state economics the way they are I doubt the corporate sponsors and suites situation improves until they win again.

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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by Bball View Post
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    Actually... IS there really a way for partners to transfer ownership of an entity like the Pacers when at least one of the partners is elderly, let alone sick, that wouldn't trigger IRS scrutiny? ...Especially if that partner died shortly thereafter?
    I would expect if the transfer were reported properly at all levels in the year it occurred there wouldn't be much anyone would do above and beyond any normal transfer. As far as I am aware (IANAL), there's nothing in law that says once someone is diagnosed terminal their right to transfer property ends because it might avoid a higher estate tax. Scrutiny would be in order to make sure there's no under reporting of market value due to the transaction not being at "arm's length", and that really has nothing to do with impending death.
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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by Major Cold View Post
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    This is why we can't be lottery bound for 5 years. The Sonics were and look where that landed them.

    Corporations are not as frugal as they once were. With the state economics the way they are I doubt the corporate sponsors and suites situation improves until they win again.
    The Sonics position in the standings had nothing to do with that move.... If the Coffee King wouldn't have been looking for an immediate sale... I'm fully convinced that the Sonics would be playing ball in Seattle as we speak. Judging by how many of his coffee shops just opened to close within months, I'm not surprised at his haphazard dealing of the Sonics.

    That team was moving regardless of their success on the floor!
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    Default Re: Brief Forbes article discussing how much Simon could get for the Pacers

    Quote Originally Posted by Roaming Gnome View Post
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    The Sonics position in the standings had nothing to do with that move.... If the Coffee King wouldn't have been looking for an immediate sale... I'm fully convinced that the Sonics would be playing ball in Seattle as we speak. Judging by how many of his coffee shops just opened to close within months, I'm not surprised at his haphazard dealing of the Sonics.

    That team was moving regardless of their success on the floor!
    The main reason they moved was because the city of Seattle didn't want to build the Sonics a new arena. Someone correct if I'm wrong on that. They had a pretty good crowd every game.

    We're the opposite, the city of Indianapolis isn't the problem, but there's no large, consistent crowd every game these days.

    Winning is what will lure people in.

    It's Indiana, everyone wants to see good basketball.

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