IBJNews

Analysis casts doubt on revenue projection for soccer stadium

Back to TopCommentsE-mailPrintBookmark and Share

The Indy Eleven soccer team would generate just $2 million to $4 million a year in ticket sales, a fraction of the $51 million that owner Ersal Ozdemir has estimated a new downtown stadium would generate including non-soccer events, according to an independent analysis by the Legislative Services Agency.

Indy Eleven would be the primary tenant of the outdoor stadium, which is to become part of the Capital Improvement Board’s portfolio, alongside Bankers Life Fieldhouse, Lucas Oil Stadium, Victory Field and the Indiana Convention Center.

Ozdemir has said the stadium would generate $5.1 million in ticket taxes. At a tax rate of 10 percent, that’s $51 million in revenue. Ozdemir’s estimate includes other events, while the LSA’s analysis considered only soccer.

Nevertheless, one critic of publicly financed stadiums describes Ozdemir’s figure as “completely insane.”

“There’s no way on earth you could get $5 million a year in ticket taxes from a minor-league soccer franchise even with concerts and other events,” said Neil deMause, the Brooklyn-based author behind the Field of Schemes book and blog.

DeMause noted the average Major League Soccer franchise—a step above the Indy Eleven—does about $8 million per year in ticket sales.

“It baffles me where they came up with that number," he said.

One caveat of the LSA analysis is that it’s based only on soccer events and the capacity of its current home venue, the Carroll stadium at IUPUI, which seats about 11,000 for soccer. Ozdemir has said he would like to build an 18,500-seat outdoor, multi-use stadium.

Ozdemir projects that the new stadium would generate $5.1 million a year in ticket-tax revenue, plus $4.1 million in sales and income taxes. He's lobbying to capture $5 million of that revenue to back the stadium's bond payments.

He did not immediately respond to an IBJ request for a breakdown of how much of his estimated revenue would come from non-soccer events.

The LSA updated its fiscal analysis of Senate Bill 308 this week, as the bill, which originally dealt with a bond issue for Fort Wayne’s Memorial Coliseum, was amended to allow a soccer stadium into Marion County’s Professional Sports Development Area.

The bill would allow the PSDA to capture an additional $2 million a year in state income-tax and sales-tax revenue for a period of 30 years. The money could be used to back a bond issue for the stadium, which Ozdemir projects would cost $87 million.

The state revenue capture would be decreased by the amount of local admissions-tax revenue collected. So if ticket-tax revenue exceeds $2 million, there will be no impact on state coffers.

The Marion County ticket tax, which applies to the downtown venues, is currently 10 percent but will drop to 6 percent by 2023.

The LSA estimates that soccer events alone would result in $416,000 to $862,000 in annual sales and income taxes. That would be offset by $198,000 to $417,000 in ticket taxes.

The bottom line for the state would be $218,000 to $445,000 a year, according to the analysis.

The LSA looked at North American Soccer League attendance, valuation of similar soccer franchises, plus attendance and revenue of other pro sports teams downtown.

Outdoor stadiums in other cities would be at the very top of their peer set if they booked between 30 and 40 total events per year, deMause said. Even at that level, the revenue figure Ozdemir has touted looks far-fetched, he said.

To reach $5.1 million in ticket-tax revenue, the venue would have to sell in tickets alone more than four times the total revenue of the Indianapolis Indians. The well-established Indians reported a record $11.8 million in revenue in 2013, including tickets and concessions.

The soccer stadium portion of the bill wasn’t debated in the Senate, and it could see more changes if the Senate votes to send it to conference committee before heading to the governor’s office for a signature.

"I have the sense that people in both parties share my fears we’re taking on a high-risk proposition,” said Rep. Ed DeLaney, D-Indianapolis, who introduced a successful amendment requiring the team or league’s financial guarantee of at least 50 percent of the amount of public financing. “This came on very late with a very, very thin fiscal analysis.”

The House passed the amended bill Thursday evening, by a vote of 58-35. Before the vote, DeLaney said he expects to see changes from the Senate, which might even go so far as to remove the soccer-stadium language.

“I hope it gets re-thought,” he said. “That process has begun.”

ADVERTISEMENT

  • these numbers are not real
    just go to the web site of crew stadium in columbus ohio. look at the concert they have brought in. almost all are hard rock c level acts and only 2-4 shows a years and there is no amphitheaer to compete with
  • Tully
    Traci, you previously had respect for Tully? Have you not been reading his columns the last few years?
  • Re: Caliboy
    Fair enough then state your position on the matter. Opponents may not be including all the pieces but our reps in the House just overwhelming approved something at last minute in an off budget year with no support for the numbers. And any way you look at it the numbers do not "appear" to come anywhere close.
  • LOL
    I'm quite capable of doing math, and never said the $51 million number seemed accurate, thank you very much. That doesn't make what I said any less true! You only need to READ the comments here to know that many of their authors are uninformed.
  • Re: Caliboy
    Caliboy do some math. Take 17,000 tickets at say $30 and 14 games for the soccer and that is $7 million (assuming they can do and charge this in perpetuity until debt is paid). Take the remaining $44 million. Divide that by 17,000 and say $80 a ticket for concerts and what not. That results in a needed 32 events at a sell out (along with competition from White River, Lucas Oil, Klipsch and Bankers Life) also in perpetuity. The math just does not come close! And we haven't begun to discuss the $87 million cost! I am a taxpayer. This is being rammed down our throats in an off budget year! All for the benefit of one man financially. Let him show us what he can do first. Then we can talk. And if he is not willing to make personal guarantees than us taxpayers should have some of the skin in the game that he gets. Us taxpayers are not this ignorant!
    • LOL
      I swear, half of you don't even bother to read anything other than everyone else's comments before you start spouting off. No one ever claimed that the soccer team alone would generate $51 million in revenue - that number includes other non-soccer events. But half the comments in this thread keep comparing the soccer teams ticket sales to that of the Pacers, Colt's and Indians. I always get a laugh over these threads...
      • Matthew Tully
        After reading Matthew Tully's absurd column in support of this boondoggle, I completely lost all respect that I had for him. I know he is not dumb enough to fall for Indy Eleven's projections, so I wonder what his motivation for knowingly writing a column full of mistruths.
      • Matt Tully: PLEASE SPEAK UP!!
        Mr. Tully: Don't you wish you would have done some actual research on your own before writing this week's very biased article supporting Ersal's CRAZY revenue projections? This is very simple math, but you must be blinded by the smoke screen like a lot of our crooked elected officials. I know you read the IBJ and these forums, so please feel free to comment here and tell us why this is such a great deal for Indy and the State of Indiana. BTW, I support soccer as a sport and welcome the Indy Eleven to the league.
      • Call Your Leglislator
        Just spoke to my house rep (D) who voted no and my senator (R) who will be voting no. Good for them! They have my vote. These corporate types need to quit treating us like hacks. I am beginning to feel like Indy is a modern day version of Gangs of New York. This is fourth grade math. Kudos to IBJ being the ONLY responsible journalism in this town unlike Tully at the Star! If these corporate types cannot get bank financing then us taxpayers want to be mezzanine venture capital financing. If we are going to finance you we want guarantees (personal), we want to see proof you can back up your guarantee and we want equity return for our money! And just because sports is attached to it does not mean we will take even that! Prove yourself first then come ask for something like help on property taxes when your entity is a tax paying entity. We need funds in many other areas in this city and state!!
      • Why not just give Ersal 7.5 million to go away?
        I have no idea what the profit margin is in crony contracting. But, let's say he can squeeze out 10%. Why not just give Ersal 7.5 million dollars (the projected profit he would earn from the stadium construction project) to just go away? From the perspective of being a tax payer in Marion County, I would rather spend 7.5 mil instead of 75.
      • $$$
        Fellow Hoosier taxpayers, we must be vigilant in regards to this fleecing of Indianapolis. We cannot let up one bit, because the second that we do, our corrupt politicians will find a way to sneak this in and we will be stuck holding the bag paying for a underutilized, underfunded playground for Ersal Ozdemir.
      • Wait...
        It's not even MLS? No, Carrol Stadium will have to suffice for now. You have to crawl before you walk. Otherwise I propose we sink $50M into a new stadium for a sport I'm developing called forshmurgen. I'm really excited about it. Guaranteed ROI within two years.
      • When will someone tell this man, "no!"
        I have so little faith in our politicians that no matter how bad this deal is, I sincerely don't believe they'll say, "no." Although, to be fair, if I were in his shoes, I would be as rosy and optimistic about the projections, too. Sugar coating is just human nature. I don't fault him for that.
      • Uh oh
        Uh oh, it looks like Ersal forgot to pay off Kathleen McLaughlin & Cory Schouten like he did Matt Tully. Wonder how longe before this article mysteriously disappears once Ersal gets a hold of Mr Mauer.
      • personal guarantee
        i think someone else mentioned this, but...let's make it simple...let him personally guarantee any shortfalls of numbers he himself really wants to sign off on...do you think it will shrink a little from here? duh.
      • anyone but Keystone Construction
        the RCA Dome(originally Hoosier Dome) was completed at a cost of $77.5 million, as part of the Indiana Convention Center, with the costs split between private and public money. How times have changed! GO ahead and built the stadium, however, don't let KEYSTONE Construction do it!! give it to someone else! would prefer see more police officers and providing more work for our teachers ! while you are it- fund programs for school age children- if you are throwing money out-
      • Additional clarification requested
        IBJ good questions about the amount of dollars generated to service the debt on the stadium. How about clarification of the likely $87mil deal structure, ie how much cash, how much bonds, the annual debt payment, and for how many years. Then clarify the ramifications for city coffers, taxpayers, and the Indy Eleven owner if anything negative happens: from stadium missing revenue forecasts to worst case of team closing down.
      • Politics as Usual
        Mayor Marine and his "republican" henchmen are continuing the lies, and giving $$millions of our hard-earned tax dollars to one of his biggest political contributors. Chicago politics at its finest.
      • Hyperbole Abounds!
        It's a good bit of fun to read comments from both sides of this "argument" because it seems as if most people are misinformed. For full disclosure I will admit I am a season ticket holder. I do not, however, think that the city should build an 18,000+ seat stadium. I don't think the team should build anything larger than 12,000 at this time. There really isn't any proven demand for consistent sellout crowds. Wait until you have return season ticket information before make wildly speculative assumptions about income generated from a venue. On the other side of the coin, there are some things that the doubters and naysayers should heed. Season tickets were capped at 7,000. At this point all season tickets have to be fully paid or the are sold to the waiting list. The minimum cost for a season ticket is $135 (sold out) and on top of each ticket is a 10% fee to improve Carroll Stadium. Also, and this will hurt their ticket sales going forward, Carroll Stadium is not a good venue for watching soccer. It lacks intimacy, the appropriate scale, and any sort of modern amenities such as concessions, restrooms, and player facilities. I believe the Eleven will need their very own purpose built stadium. I don't believe it should be at the full expense of he taxpayer, nor do I think it should seat 18,000+. Give it a year, find a walkable location downtown (Coca Cola plant on Mass Ave?), and then let the team capture ticket taxes to cover bonds.
      • IT'S ABOUT TIME!!!!
        Thank you, IBJ, for finally taking the time to bring some sanity to this absurdity. This thing was announced and pushed forward so quickly through the legislature, but for some reason our elected officials did not question these ridiculous numbers. The biggest joke of all is that Ersal Ozdemir keeps pointing to the "7,000 season tickets" that were sold this year. Keep in mind that the majority of those season tickets sold for less than $100. That is not per game. That is for the entire season!!!!! It seriously makes me nauseous to think about this. The lies aren't even good ones! The numbers are so out of whack, and yet our elected officials don't even question it!!!!! Mind blowing!!!!!
      • Interesting Conversation from City Hall
        (Ersal): "Hello Mr. Mayor, this is Ersal calling, how are you? Can you believe this backlash about the new stadium? Why can't these people just believe me?" (Ballard): "There, there my good friend, don't you worry about a thing. I've got this GM stamping plant redevelopment wired for you, and we'll help you get that project and your stadium without a problem." (Ersal): "Golly gee, Mr. Mayor, I can't thank you enough for your continued support! Is there anything I can do to thank you?" (Ballard): "Well, well my good friend, come to think of it..... Yes there is...." (All characters in this cartoon are impersonated....)
      • The soccer folks are dreaming
        The Indiana Pacers have only had TWO SEASONS in their history where they drew over 17,000. How do these people think they can sell out an 18,500 seat stadium for a minor league soccer team? I personally find soccer only slightly more exciting than watching latex paint dry in a humid room, but I recognize that others enjoy it however they are VASTLY overestimating the number of people who would pay to watch soccer in Indianapolis. If the Pacers can't draw 18,000+ folks even when Reggie Miller was dominating, how can a minor league soccer team do it?
      • Obviously
        Someone please stop this nonsense before it gets too far.... this is a disaster waiting to happen.
      • Ed DeLaney
        Thankfully we have non-corrupt politicians like Ed DeLaney representing and protecting the taxpayers of Indianapolis. If it were up to the Greg Ballards of the world, Ersal would be getting his stadium tomorrow.
      • Fraud
        The FBI needs to investigate Ballard for bribes. David Beckham couldnt sell tickets in a market with 16 million ppl and soccer will work in Indiana? Its common sense. Just like all the lies Mitch said about jobs
      • Common sense
        Finally someone with some common sense and half a brain looked at this proposal. So, Ersal estimates an upstart minor league soccer franchise is going to generate $51 million a year in ticket sales, while the average Major League Soccer team (in larger markets like Chicago, LA, and Washington DC) generates only $8 million a year? Give me a freakin' break. Who knew soccer was so popular in Indianapolis that it would generate 6-7 times the ticket sales of an MLS team and almost 5 times the ticket sales of the Indianapolis Indians, which has 72 home games a year and has been here for decades. Hey, how about you personally guarantee the debt on the stadium and quit trying to sell snake oil to politicians who don't know any better? I've had enough of people like this gambling (not even sure I'd call it that b/c the odds are so atrocious) with tax payer money. If you're so confident in your numbers, step up to the plate big guy and put your money where your mouth is. What a joke.
      • Some Simple Math
        San Antonio and Atlanta had the highest average attendance in 2012, and those two teams averaged still drew less that 7,000 fans per match. So lets assume average Indy attendance of 7,000 per match, average ticket price of $40 (too high), and 14 home games: That equals only $3,920,000 in ticket revenue!! I know, I know.... DEPOSITS for season tix are at 7,000, but how many have actually been SOLD??? PLEASE people, contact you State rep and tell them to say NO WAY to this BS!!!
      • Comedy
        Do the Colts even generate $51 million a year in ticket revenue? Who are the Indy Eleven trying to fool? Next time, it might help your cause if you came up with more realistic fraudulent numbers.
      • FINALLY!!!!
        Thank you so much for this article!!!! As others and myself have said all along, Ersal Ozdemir has been feeding everyone lies. We have already given him the Broad Ripple parking garage (at no real cost to him). Enough is enough!
      • FINALLY!! THE TRUTH COMES OUT
        FINALLY! Now there is some REAL analysis for people to judge beyond the crazy numbers being thrown around by the Wi$$ard of OZ..... The projections being given by Indy Eleven are ABSURD, and it is about time that some elected officials put their hands back in their pockets!! Is anyone crazy enough to believe that a NASL team in Indy can out-draw an MLS team in a market the size of Chicago?? That is Oz's claim.... Come on people, pile on these fools and stop this madness. I am all for the Indy Eleven, but they need to play in Carroll for at least two seasons, and if they are as successful as Oz predicts, then he can build a new stadium with his own money!!

      Post a comment to this story

      COMMENTS POLICY
      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
       
      You are legally responsible for what you post and your anonymity is not guaranteed.
       
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
       
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
       
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
       

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by
      ADVERTISEMENT

      facebook - twitter on Facebook & Twitter

      Follow on TwitterFollow IBJ on Facebook:
      Follow on TwitterFollow IBJ's Tweets on these topics:
       
      Subscribe to IBJ
      ADVERTISEMENT