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.”