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Indiana Pacers future in jeopardy from financial losses [ESPN]

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  • #76
    Re: Article in Defense of the Simons

    Originally posted by speakout4 View Post
    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?

    Comment


    • #77
      Re: Article in Defense of the Simons

      Originally posted by Bball View Post
      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__________

      Comment


      • #78
        Re: Article in Defense of the Simons

        Originally posted by able View Post
        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.

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        • #79
          Re: Article in Defense of the Simons

          Originally posted by able View Post
          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?

          Comment


          • #80
            Re: Indiana Pacers future in jeopardy from financial losses [ESPN]

            Originally posted by able View Post
            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.

            Comment


            • #81
              Re: Article in Defense of the Simons

              Originally posted by Tom White View Post
              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?

              Comment


              • #82
                Re: Article in Defense of the Simons

                This is a bit old (07-08) but it explains alot.

                http://nbahoopsonline.com/Articles/2...uesharing.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.

                Comment


                • #83
                  Re: Article in Defense of the Simons

                  Originally posted by able View Post
                  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?
                  "Don't get caught watchin' the paint dry"

                  Comment


                  • #84
                    Re: Indiana Pacers future in jeopardy from financial losses [ESPN]

                    Originally posted by Kid Minneapolis View Post
                    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.
                    2010 IKL Fantasy Basketball Champion Baltimore Bulldogs

                    Comment


                    • #85
                      Re: Indiana Pacers future in jeopardy from financial losses [ESPN]

                      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?
                      2015, 2016, 2019 IKL Fantasy Basketball Champions - DC Dreamers

                      Comment


                      • #86
                        Re: Article in Defense of the Simons

                        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.

                        Comment


                        • #87
                          Re: Article in Defense of the Simons

                          Originally posted by Naptown_Seth View Post
                          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.
                          "Don't get caught watchin' the paint dry"

                          Comment


                          • #88
                            Re: Article in Defense of the Simons

                            Originally posted by speakout4 View Post
                            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.
                            "Don't get caught watchin' the paint dry"

                            Comment


                            • #89
                              Re: Article in Defense of the Simons

                              [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?

                              Comment


                              • #90
                                Re: Article in Defense of the Simons

                                Originally posted by able View Post
                                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

                                Comment

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