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Sports Business

Home playoff games could help Pacers turn a profit

May 15, 2013
KEYWORDS Sports Business

As the Indiana Pacers draw within one win of their first Eastern Conference final since 2004, the team also draws closer to profitability.

This franchise has come a long, long way in erasing the red ink from its ledger in the last three years, and has some important opportunities in front of it. So far, the Pacers have hosted five home playoff games. That equates to a significant revenue bump over a non-playoff team.

If they get one more home playoff game in the New York series and three more in the Eastern Conference finals, that bumps the number of home games this season more than 20 percent. The Pacers have 41 home games per regular season.

While there are added expenses in hosting playoff games, those are usually not as great as the added revenue.

"In a small market like Indianapolis, each home playoff game should mean an additional $700,000 to $800,000, so they've brought in some meaningful money," said Marc Ganis, a Chicago-based sports business consultant who counts several NBA teams as clients.

Sports business experts agree that the additional playoff revenue plus a $10 million subsidy from the city's Capital Improvement Board to operate Bankers Life Fieldhouse should get the team close to break-even or even bring in a small profit.

But bigger financial rewards could await the Blue and Gold. Much bigger. The team is using this year's playoff run to sell season tickets for next year, and the Pacers' sales boss, Todd Taylor, said that effort is gaining momentum.

The buzz in the fieldhouse has been noticeably louder in the Knicks series than it was in the first-round series against Atlanta. The two Knicks games were packed with hardly an empty seat in the house. And the crowd was loud.

Demand for playoff tickets is clearly on the rise. This year's playoff run is also starting to generate a buzz among sponsors and potential sponsors, Taylor said. In terms of sponsorship sales, this run couldn't be coming at a better time.

Next fall, the Pacers, along with other NBA teams, will start selling ad space on team jerseys. Already, several local companies, including The Finish Line, said they'd be interested in paying to put their corporate logo on the Pacers' jerseys.

The ads, likely a small patch on the upper corner of the front of the jersey, won't be in place until the 2014-2015 season, but the selling process will start next fall, league sources said.

Sports marketers think a small-market team like the Pacers could command $1 million to $6 million per year for the jersey ad.

"If your team is hot and creating a buzz in the community, they're going to score a lot closer to that high end," Ganis said. "That can make a big financial difference for a team operating on tight margins like the Pacers."

It could even be the difference between a profit or loss.

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