Monday, March 9, 2009

Pacers Beg for $15 Million from Taxpayers; CIB Says "Okay"

At today's meeting of the Capital Improvement Board, the Board's Vice-President Pat Early argued that the Pacers are losing money and that they need more support from taxpayers. The Indianapolis Star reports:
Pat Early, the board's vice president, said the Pacers are losing about $30 million this season and have lost money every year but two of the 28 years the Simons have owned the team.

Early said the Pacers cannot continue to shoulder the $15 million per year operating costs of Conseco Fieldhouse. He said the team has not threatened to leave but that there is a good chance it will leave or shut down if the CIB does not assume those costs.
There is a problem with this argument. The Indiana Pacers refuse to open its books for an independent financial audit. Instead, the Pacers (and the Colts) simply want the City and the CIB to accept their word in terms of how much money the franchise makes. One would think that at a minimum the Pacers should be required to submit to an independent audit before forking over $15 million more of taxpayer money. But, alas, that is not the CIB way.

Again, the "cuts" the CIB claims to be making have made much of the headlines. As pointed out by Gary Welsh over at Advance Indiana, these cuts are not cuts at all. It is a bit like going to my boss demanding that I get a $20,000 raise next year then saying I agreed to take a pay cut of $10,000 when the boss only gives me a $10,000 raise.

Regardless the "cuts" amount to little more than trying to extinguish an inferno by spitting. The reason for the cuts is nothing more than political spin, a way of offsetting the tens of millions of more dollars that the CIB is going to be asking that taxpayers pay.

Finally, someone should be asking questions about WHEN the decision was made to give the Pacers $15 million more annually. From the opening of negotiations, the CIB came forward and mentioned as a matter of fact that they would have to pick up $15 million more of the cost of operating the Lucas Oil Stadium. It is clear that this decision had already been made behind closed doors, and not at a public meeting, which could well be a legal violation. Further, one wonders whether Bob Grand, the President of the CIB and the attorney for the Simons, the owners of the Pacers, was involved in the back room decision to give the $15 million more to the Pacers. That's something that needs to be investigated. Now if we could get the Star to do the same type of investigative reporting on this matter that it used to look into the abuse of free parking placards last year.


Downtown Indy said...

To me it seems incredibly foolish to pour $15M into an operation that hasn't been profitable for 28 years. Are we so desperate for 'big city image' that we have to make 'big bank' style stupid financial decisions? said...

It's endemic.

Reason has nothing to do with it.

In Columbus, Indiana our officials are forever making capital improvements to enchance their personal senses of accomplishments at taxpayers expense.

Why does a community's "image" trump fiscal responsibility?