Tuesday, November 15, 2011

Will the City Agree to Give the Pacers Hundreds of Millions of Our Tax Dollars Next Year?

Currently the NBA is in a middle of a bitter labor dispute that threatens the season.  So of course the Pacers are losing a lot of money since they are not receiving gate gate and television revenue, right?  Actually according to the City's deal with the team, the Pacers will actually make more money not playing the games.

Conseco Fieldhouse
Let's recap the original deal struck in 1999.  We taxpayers paid to build Conseco Fieldhouse. The Pacers agreed to pay to run the place as long as the team gets to keep 100% of all basketball and non-basketball revenue off the building.   The Pacers also play there rent free. 

Pretty good deal right?  Well the Pacers didn't think so.  Last summer, the City and the Capital Improvement Board, which runs the sports stadiums, agreed and decided to give the the team $10 million for operations for each of the next three years along with $3.5 million improvements to Conseco Fieldhouse.  The latter included a taxpayer purchased ribbon electronic advertising display which encircles the basketball court.  The Pacers, of course, get 100% of the revenue from the advertising display.  Later it was uncovered that the money given to the Pacers was property tax revenue...this at the same time that the library, paid for exclusively with property taxes, was cutting back hours because it did not have sufficient resources.

But that $33.5 million was a three year "bridge deal."  Somehow we have now completed the final payment on the bridge deal, just 1 1/2 years into it.  Next year it will be time for a final deal to cover the remaining seven years of the Conseco Fieldhouse contract.

The Pacers last year wanted $15 million to operate Conseco, but "only" received $10 million.  Don't be surprised if the Pacers ask for $15 million a year again, perhaps more.  Fifteen million times 7 years, means such a deal would cost taxpayers $105 million.

Unfortunately the news media continues to report, without question, the phony CIB-commissioned Hunden study of the cost of losing the Pacers (supposedly $55 million), often referring to it as an "independent" study.  Hunden Strategic Partners is a pro-hospitality group, led by Robert Hunden, a former economic development official for the City of Indianapolis under Mayor Stephen Goldsmith and who previously worked for the Indianapolis Bond Bank.  Hunden also worked on the original deal for Conseco Fieldhouse.  The Hunden Report is in no way an "independent" study of the economic impact of the Pacers on the local economy. 

If the CIB wanted an independent study, there are plenty of university economics professors who could have given the Board such a study.  But the CIB clearly was not interested in the truth.  The Board was instead interested in a "homer" study that would give them numbers they could feed to the news media to mislead the public about the economic impact of losing the Pacers.

Once the labor dispute is over, expect the Pacers to turn to the City, hat in hand, wanting as much as a hundred million more from City taxpayers. It will be interesting to see if anyone in the Ballard administration, which claims to be fiscally conservative, will stand up to the Pacers and say "no."  Given the history of our crack City and CIB negotiators (sarcasm intended), I'm not holding my breath.

5 comments:

Had Enough Indy? said...

Would you please clarify how we have already made three $10 million annual installments?

Goldfinger said...

I don't think they should receive anything. Never have followed them & never will!!! Doesn't bother me in the least that they are not playing. Leaves the shows on tv instead of preempting them for the NBA.

Paul K. Ogden said...
This comment has been removed by the author.
Paul K. Ogden said...

HEI, I don't get it either. Several news reprots have discussed whether we should make the "final" payment given the lock out. I think that payment may have already been made now. I confirmed that they had already made two payments several months ago.

Gary and I traded emails or comments on this. He thought it had to do with the timing of the budget. I'm not so sure. They were about a year late asking to renegotiate the contract. What I think they did was to pay the Pacers retroactively for a year to get caught up. They didn't bother to tell anybody that, but I'm pretty sure that's what they did.

Downtown Indy said...

I just paid $1500 to my auto mechanic, even though he didn't work on my car.

Sounds absurd, right? Yet in the world of government, it's viewed as perfectly sensible.

The Pacers should have nearly nil costs since they aren't paying player salaries during this pissing contest.