In 1983, at the urging of then mayor of Indianapolis Bill Hudnut, the brothers Mel and Herb Simon bought our beloved Pacers, and with that decision and with the help of others along the way began a revitalization and rejuvanation of downtown Indianapolis that continues today. There is little doubt that these Indiana loyalists and business titans helped usher in a future that made Indianapolis a destination spot for sports entities around the country and even the world. Without them, the landscape of sports in the Hoosier state would be much different today I believe.
27 years later, Indianapolis is a different place, and the NBA landscape is much different as well. Time waits for no one, and it hasn't waited for the Pacers owners. Mel Simon is gone now, and his brother soldiers on owning a team that once was a labor of love between two close siblings in the prime of life, but now just must feel like a burden. Hemorraging money, dwarfed by another sports franchise right down the street, a small market team in a struggling league, surrounded by a once rabid fan base that is now mostly infected with apathy. Add to that an economic downturn and a society that in general is less patient and more demanding for results, trapped in a system that makes making those type of quick turnarounds more difficult than ever. Doing this alone at his age must make our owner wonder why he is doing this.
Herb Simon has no family members interested in continuing the legacy. His nephew David has never been a big fan or involved with the sports franchise, instead focusing his talents and interests elsewhere. Herb is in his 70's now, and he must know by now as he looks at a life nearing sunset that the team he owns needs a solid future than he cannot provide for it in perpetuity. Loyal to the land that he truly loves, there is no doubt in my mind that Herb will never ever move the Pacers to another location....I believe him and the others when he makes statements to that effect.
But that doesn't mean that he won't sell the team to someone else. Assuming that the Pacers staying in Indianapolis is as important to him now as it was in 1983, I think we can infer some other basic ideas I have to be true.
I believe that Simon is greasing the skids to make the Pacers look more attractive for a prospective buyer that would keep them in Indianapolis. When you look at all moves and decisions both basketball and business related from here on out, I recommend looking at them through that prizm instead of how you may normally judge them. It is for this reason that I have alot of trouble complaining much about what Bird does on a day to day basis....I expect there is alot more going on and many more limitations set on Bird than we all know about. For instance, I believe that Bird would likely fire O'Brien if it were up to him, but that is not being approved from above, as it would mess up slightly the financial plan in our owner's mind.
1. If you had a plan to sell the team, wouldn't it be smart to cut payroll as much as you could to make your team more attractive to a potential buyer?
Of course it would! A new owner would want to be able to buy it with as much of a clear balance sheet as possible. Both from a business standpoint and a basketball one, you'd not want to inherit a bunch of long term committments to players and personnel that you didn't choose yourself.
The Pacers will have their payroll drastically reduced after this next season, as over $30,000,000 of payroll I believe will be eliminated with the expiration of salary committments of our highly paid veterans Ford, Foster, Murphy, and Dunleavy.
The Pacers scouts, assistant coaches, head coach Jim O'Brien, and President Larry Bird will all have their contracts up as well, enabling a new owner to start fresh with his own people from a management and organizational standpoint. This is exactly what you'd do if you wanted to make your team look as attractive as possible to a potential buyer.
2. If you were planning to sell the team but have it stay in Indianapolis, wouldn't you also want to get as attractive of a stadium deal as possible?
The Pacers playing hardball with the Capital Improvement Board is absolutely the right thing to do from their perspective. A potential new owner doesn't want to be hamstrung with a bad lease and lots of expenses he can't control, you'd as a seller want to make it as easy as possible for a buyer to look at his new potential investment as a great opportunity, so doing the hard work for him now only makes sense.
What are some other moves you might make if you were the Simon's and wanted to discreetly get the team sold without having to openly put it on the market?
One thing you'd want to do is try to cultivate a buyer who you truly knew would keep the team here and represent the best of the city. How could you do that?
First you'd no doubt be working with the league office, and particularly commissioner Stern, to identify and convince whomever you deem worthy that this would be a good thing to do from both a business and civic standpoint. You would definitely want to sell to an owner that was stable financially, had deep Indiana roots, and that would be approved by the league.
Speaking of Stern, he could really help us with this St Louis Spirits/ABA problem. I know all of those who read PD know what I am talking about. Wouldn't it be a huge burden off of our franchise if the league itself (out of tv revenue or some other source) helped pay that ransom that our team and the three other franchises have to pay each year? I actually look for that to happen in someway soon. Not sure how exactly, but I think Stern will find a way to help some of the small market ABA franchises somehow ease that burden.
Next, as discussed earlier, you'd want to make the product as debt free as possible, so the new potential investor would look at owning us as a greater opportunity financially than it might look presently. You'd want to get as many new sponsors and income flow going as you could as well. You'd want to have as few long term financial committments as possible.
Finally, you might consider selling a PART ownership to your new investor, both to alleviate the present day financial burden from yourself, and to sort of ease in whomever this ends up being to eventually becoming sole owner upon your death, or whenever you see fit to finally give up the reins entirely.
This "owner in waiting"/investor scenario has yet to take place yet that we are aware of, but I think in the next few months or so it could begin to happen. A slow turnover process in our ownership makes too much sense to not happen. Depending on who it ends up being, this could be one of the greatest things that happens to our beloved Pacers, or it could be one of the worst....in this, we just have to trust. That is why it so important to do these things and make decisions at such a deliberate pace. Whether this person actually becomes a part owner before buying in fully remains to be seen, but I definitely think there is a person out there preparing as we speak to own us.
To me, this is the coup de grace of the much discussed "3 year plan". First, rid the team of it's bad image players.
Secondly, establish a clear chain of command with an Indiana legend running the basketball side, and a true businessman and mover/shaker running the business side in Jim Morris.
Thirdly, continue to purge as much debt from the franchise as possible whole trying to remain somewhat competitive enough to keep a flicker of interest going.
Fourth, only make small long term investments in people, or if you make a big committment financially to someone, make sure it is someone really worth it (Granger)
Fifth, solve the major business problems with the city involving the fieldhouse.
Basically, we look on track to get all of that accomplished by April of 2011. So next April, we will be an extremely attractive franchise to own for a man who loves basketball and has deep ties to Indianapolis: we will have alot of roster spots open and plenty of cash available to spend, whoever this is will likely have a good idea from the commissioner what the future outlook for a CBA business model will look like, whoever this new owner could be will be able to not pay any severance pay to former employees and will be able to bring in fully his own people to run the team. And this person will have a favorable lease on Conseco Fieldhouse, the best venue in the NBA.
On top of that, he will be viewed as a savior to a beloved franchise, if the story is sold the right way, gaining much needed good will that he will need as the years go by.
Anybody want to guess a name?
I think Jeff Smulyan makes alot of sense. A very rich man, Smulyan owns Emmis Broadcasting, among other companies around the globe. A Shelbyville native, he has had a long interest in sports and in fact did own the Seattle Mariners for a short time many years ago. I believe Smulyan is from Shelbyville, and I think he actually still lives there.
Smulyan would be a new generation of owner, one that is media savvy and more sports loving that the old school hands off style we've had for 27 years now. Not as wealthy as the Simons, Smulyan would likely be more involved and caring in day to day operations of the team, which could be good or bad I suppose.
I could definitely see a scenario where Larry Bird remains and has a small ownership part of the team as well, along with some various other small investors to help foot the bill.
New ownership is coming to Pacer land eventually. Tomorrow waits for no one, not even a billionaire named Simon. As the true franchise diehards, we need to think about what this might mean for our team both short and long term. I guarantee you, what Herbert Simon does this spring and summer is alot more important and vital than anything Larry Bird and Jim O'Brien do.
As always, the above is just my opinion.