Indians should holler loudest about ticket tax increase

January 29, 2013
Back to TopCommentsE-mailPrintBookmark and Share

None of Indianapolis’ professional sports teams affected by the ticket-tax increase that the City-County Council approved Monday night are particularly pleased about it.

The Indianapolis Colts recently went public with their objections. And with good reason. The hike in the ticket tax from 6 percent to 10 percent means the tax will generate more than $1 billion for the city over the remaining 25 years of the Colts' lease deal. That’s a cost the team is either going to have to eat or pass on to fans. I’m guessing neither option seems appetizing.

But the Indianapolis Indians arguably have the biggest beef.

While the AAA minor league baseball team benefits from city police and fire protection during its games, it doesn’t receive nearly the financial benefits the Colts and Indiana Pacers get from their lease deals.

All three teams play in facilities owned by the city’s Capital Improvement Board—a primary beneficiary of the ticket tax. That’s where the similarity in their lease deals end.

The Pacers essentially pay nothing to lease Bankers Life Fieldhouse, which was built in 1999 for $183 million. The team does pay all operating expenses but in return keeps all revenue from basketball and non-basketball events, including concerts, circuses and ice shows.

For the last four years, the city has given the team $10 million annually to help with operating expenses and an additional $3.5 million for capital improvements to the arena.

The Colts pay $250,000 annually to play in the $750 million Lucas Oil Stadium. The team keeps all football-related revenue. In addition, the CIB pays the Colts $3.5 million annually. That amount is supposed to be approximately half of all non-Colts-related revenue, but the annual amount paid to the Colts is guaranteed whether or not the city can generate $7 million from non-Colts events.

The city also pays for operations and capital expenses related to Lucas Oil Stadium, which are considerable.

It should be pointed out that Colts owner Jim Irsay contributed $100 million to the stadium’s construction costs. However, $48 million of that came from money the city paid him to break his lease deal for the RCA Dome.

The Indians pay $500,000 annually to lease Victory Field, which was built in 1996 for $18 million. The Indians keep all revenue from its baseball games and other events. The team also is responsible for all operating expenses and capital improvements to the facility. In recent years, those improvements have included construction of Captain Morgan’s Cove and this off-season's re-surfacing of the main concourse, a $260,000 investment.

Few would argue the Indians have the economic impact on this city that the Pacers and Colts have. But the gap between the minor league team and its NBA and NFL neighbors might not be as wide as you think.

In recent years, the Indians have drawn just short of 600,000 fans to Victory Field per year. The team’s attendance remained rock steady even during the economic downturn.

Pacers games in recent years are drawing nearly 600,000 people annually, while the Colts draw slightly more than 650,000 people downtown in an average regular season.

The Pacers and Colts no doubt draw more attention to the city through their television and radio broadcasts, and that has to be considered when you’re determining relative value. There’s also more high-dollar corporate activity associated with Colts and Pacers games.

While I wouldn’t argue the city is necessarily getting a raw deal with its Pacers and Colts agreements, I would say the Indians are getting a raw deal by comparison.

The Indians aren’t about to ask the city to operate or maintain Victory Field.

“We really wanted to have that responsibility here,” Indians Chairman Max Schumacher said. “The city was supposed to be taking care of Bush Stadium (the Indians’ previous home), and they weren’t doing it.”

The Indians roster is composed by its Major League Baseball affiliate, the Pittsburgh Pirates. And Schumacher is acutely aware how little control he has over the quality of his team year-to-year.

“The condition of the ballpark is the one thing we can control,” Schumacher said. “We know it’s important for us to assure that no matter what happens on the field, it’s will be a wonderful day of Indians baseball at Victory Field.”

The Indians aren’t complaining about their deal, though if I were an Indians stockholder, I might.

It would seem fair that the Indians at a minimum should have their $500,000 annual lease payment waived. If I’m an Indians stockholder, I know that gesture by the city increases the team’s profitability about 50 percent annually. And that’s going to increase the stock value significantly.

The Indians have a decades-long streak of profitability. That’s why the 730 remaining shares of stock in the team are valued above $26,000 each. A better lease deal likely pushes the value easily above $30,000. And over time, a more favorable lease deal would likely push the team’s value even higher.

  • error in article
    The ticket tax is not being raised from 6 to 10 cents, it is being raised from 6 to 10 PERCENT.
    • While the numbers attending may be close...
      There is a big difference between who the Indians are drawing vs. the Pacers and (especially) the Colts. The Indians crowd is largely local and it's pretty rare to hear about someone getting a hotel room, hitting St. Elmos, etc. because of an Indians game. The Pacers and especially the Colts draw a much larger percentage of their attendees from outside the Indy metro area and generate more spending that wouldn't otherwise come to Indy via hotels, expensive meals, etc. With the Indians crowd being a much larger percentage of locals the money spent here would have largely been spent here anyway on something else. The spending from out of town visitors is primarily what most cities are looking for from events and viewed through that lens the Indians fall far short of the Colts and Pacers. I would also guess the Indians do pretty well on their per person $ spent in the ballpark relative to the other teams so I'm not too worried about helping them out.
    • No Error
      The tax increase is 6 percent to 10 percent, not 6 cents to 10 cents as Mike mentions below.
    • closer than you think
      It might be true that those attending Indians game are less likely to eat at the high end steak places. However, they are more likely to go to the Zoo, the Eiteljorg, and the State Museum. While each of those attractions are arguably destination attractions, the Indians attracting 600k people to their doorstep has to be a big boost. And it doesn't help downtown or those attractions if those dollars are spent in Castleton or Greenwood. Also, the Indians draw families with 3, 4 or more mouths to feed rather than dinner for 2 at St. Elmo's or Mo's. Don't be too quick to dismiss the Indians' impact.
    • JW gets big boost from Indians
      I can tell you from experience that the restaurants on the ground floor of the JW Marriott get lots of traffic from Indians games, especially games on the weekends. The High Velocity sports bar gets especially crowded on game day. So I too wouldn't be too quick to dismiss the economic impact of the Indians.

    Post a comment to this blog

    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
    1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

    2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email:

    3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

    4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

    5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses