The Indianapolis Colts are playing defense as city leaders move to hike a ticket tax on downtown events by 67 percent.
The team says raising the tax on tickets from 6 percent to 10 percent will harm its bottom line and that of local businesses that rely on Colts fans. The tax is levied on events at Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Field and the Indiana Convention Center.
The tax would add more than $3 to the average Colts ticket, which now costs about $88, said Colts Chief Operating Officer Pete Ward. Season ticket holders on average would pay $30 more for 10 games, even though the team has kept base prices steady since 2010. Prices on the stadium's most expensive tickets would rise more than $11 per game.
“This is coming at a time when tickets for sporting events across the board are in less demand, and the competition with the flat screen in the living room is keener than ever,” Ward said. “We also don’t think it’s in the best interest of business downtown. It just increases the cost for our fans, not only for Colts fans, but other events as well.
"We always try to price our tickets to the market, and this just makes it more difficult," he added.
Even a slight decrease in ticket demand could lead to some games not selling out, prompting TV blackouts of the game in the local market. That hurts not only the Colts, but the city's image as well, the team said.
The tax increases are part of a budget deal between Republican Mayor Greg Ballard and Democratic leaders on the City-County Council including President Maggie Lewis. The deal, which restores $32 million for county agencies Ballard had vetoed, also would raise the total tax on car rentals to 17 percent.
A council committee approved the proposal Tuesday night. A final vote on the tax increase is set for Jan. 28.
City leaders have said the increases are essential to secure the fiscal health of the city and Capital Improvement Board, which owns the city's sports venues and convention center.
The first year's extra tax revenue, an estimated $6.7 million, would flow to the city's general fund to close a budget deficit. After that, 25 percent of the tax money—up to a maximum of $3 million—would go to the city’s coffers each year, and the rest would go to the CIB. The CIB also will pay $5 million for public safety services this year.
Marc Lotter, a spokesman for the mayor, said he does not expect the move to have an adverse effect on ticket sales for local sports teams.
“Fans are very dedicated and loyal to our professional sports teams,” he said. “We’re focused on the long-term good of the city and the fiscal health of the city and CIB, which operates the facilities where the teams play.”
The Indiana Pacers have not taken as vocal a stand against the ticket-tax increase, perhaps since the CIB agreed late last year to pay $10 million to help Pacers Sports & Entertainment run the Fieldhouse, extending an expired three-year deal. The team keeps all revenue from events at the stadium.
Pacers President Jim Morris did not immediately return a phone message Wednesday morning.
The Colts for now are focused on lobbying elected officials and have no plans to appeal directly to fans, Ward said.
Arguably, the Indianapolis Indians have the most grounds for complaint. The team is the only local team that pays rent for its taxpayer-built facility, and also the only one that operates its stadium without subsidy.
Yet, Cal Burleson, the Indians vice president and general manager, struck a diplomatic tone on the ticket-tax hike.
"The Indianapolis Indians do not enjoy paying higher taxes any more than our fans do," Burleson wrote in an e-mail to IBJ. "We also recognize the need to have a dynamic and vibrant downtown, and are optimistic that increased revenue for the CIB would better enable our community to work toward that goal."
Burleson noted that the team is keeping its ticket prices for the 2013 season the same as they were in 2012.