Colts, Pacers state financial case

February 13, 2009
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kenleySen. Luke Kenley, R-Noblesville, a key fiscal leader in the state legislature, has been busy in the last week meeting with members of the Indiana Pacers and Indianapolis Colts. The primary topic: The teams' financial challenges and the deficit faced by their landlord, the Capital Improvement Board.

Kenley said he spent a couple of hours last Friday with Pacers President Jim Morris and Chief Financial Officer Kevin Bower, who were more forthcoming with their financials than ever before. The CIB is considering paying for Conseco Fieldhouse operating expenses.

Kenley had a sit-down with Colts leaders Monday, including Senior Executive Vice President Pete Ward and team attorney Dan Emerson. While Pacers officials are eager to renegotiate their lease in Conseco Fieldhouse, Kenley said the Colts do not want to renegotiate their Lucas Oil Stadium lease.

“Right now, I’m just trying to get their input,” Kenley said.

Kenley figures to be a key person in the CIB’s effort to work their way out from under its $37 million deficit. The state legislature and City-County Council will likely be called upon to approve various tax increases to help erase the deficit. The CIB does not have the authority to institute or raise taxes.

Kenley said he was surprised by the depths of the Pacers' losses, and added that non-basketball revenue has not been coming into the team’s coffers at expected levels. “They do make a profit off of concerts and other events, but it’s not as much as you’d think,” Kenley said. The cost of paying the acts, plus various middle men have cut into those profits greatly, Kenley added.

Colts officials expressed concern about a move to renegotiate their lease or to increase the local ticket tax above its current 6 percent, Kenley said. (The Indianapolis Indians are also worried about the ticket tax. To read more about that, see tomorrow’s print IBJ.) Colts officials also said team ownership has put $230 million of its own money into the team in recent years; $130 million in player payroll expenses and $100 million toward the new stadium. It could take a decade or more, even in the new stadium, Colts officials said, to recoup that outlay.

“The Colts wanted to remind us that the lease was built on the premise of allowing the team to put together a top-notch program,” Kenley said. “[Colts officials] said it’s always a challenge to field a competitive team in a small market, and they’ve worked real hard to field a winning team.

“I realize they have a right to the deal they have,” Kenley added. “We’re looking at the least painful way to raise the money we need.”
  • This goes well with the old saying be careful what you ask for. Mitch and Luke had all the answers when the stadium was proposed, and they got just what they wanted. Now Mitch and Luke get to clean up after themselves. Do they teach a class in shoveling .... at those Ivy league schools they attended? They shorted the CIB, and now they get to fix it. What goes around comes around.
  • One team has a CFO in the room, one team has a lawyer in the room. That speaks volumes of the situation.
  • The team with the lawyer has a 30 year agreement, and is wondering what has changed in the last two years when Luke previously tried to rengotiate their deal. The team with the CFO in a essentially a free agent wanting a better deal.
  • After the CIB discovered a $20 million operating deficit caused by the Colts Lucas Oil contract, it is hard to swallow that CIB's Bob Grand offered $150 million more taxpayer dollars to take over Pacers operating expenses by opening the Pacers contract 10 years early.

    Now the Pacers want the city's parking garage revenue too!

    Please remember CIB's Bob Grand is the taxpayers advocate, not an employee of the Simons or Irsay.

    Jim Morris could you please repeat that you are not asking for a taxpayer bailout and are not threatenig to leave town;)

    Pacers' Morris: Team has lost $200M
  • $200 million in losses. Wow! Not much of a legacy in leadership there.
  • Amazing that a sports & entertainment company would lose money by losing games, promoting thugs as role models, paying tens of millions to a player to stay away from the team, and failing to attract profitable non-Pacer events to Conseco until very recently.

    Taxpayers should be ashamed for asking the wealthy owners and players to cut expenses or pitch in for their own operating expenses.

    How dare the public question why they get all the losses and expenses.

    Doesn't the public know that hundreds of millions of dollars in player and management salaries and luxuries have to come from somewhere?
  • 2008 Indiana Pacers Team Value was $303 million

    Simon's bought the team in 1983 for $11 million.

    The combined net worth of Herb & Melvin Simon is $4.4 BILLION

    Detail of Indiana Pacers $70 million in Player Salaries for 2008
  • 2008 Colts Team Value was $1.1 billion

    Irsay bought the team in 1972 for $15 million.

    Jim Irsay's net worth exceeds $1.1 BILLION.

    Detail of Colt's $132 million in Player Salaries for 2008
  • Indianapolis Indians 5th Most Valuable Minor League Team in US

    No. 5 Indianapolis Indians
    Indianapolis, Ind.

    Value: $22.2 million
    Revenue: $9.0 million
    Operating Income:* $1.9 million
    League/Class: International League/AAA
    Major League Affiliate: Pittsburgh Pirates
    Owner: publicly traded
    Stadium Name: Victory Field
    Stadium Cost:** $20 million
    Year Stadium Opened: 1996

    Public team recently increased dividend for its few shareholders to $350 from $200.
  • Pity Party, what's your point? Do you think that since the Indians have made a profit through solid management should be taxed (and their fans should be taxed) to cover the playing venues of the Colts and Pacers, both of which have their own opportunities to maintain profitability. Just curious.
  • Let me get this straight, the city quit collecting any rent from the Simon's on Circle Center Mall because they wanted to save mall investors from paying taxes and thought it would be best to give the bill to you and I through a TIF district?

    Additionally CIB officials could not say whether the Pacers have made good on their $57 million promised contribution to Conseco Fieldhouse, which carried some conditions based on team revenue, but the team did get to keep the $40 million Conseco paid for naming rights?
  • While Pacers officials are eager to renegotiate their lease in Conseco Fieldhouse, Kenley said the Colts do not want to renegotiate their Lucas Oil Stadium lease.

    Makes me sick. I would rather put money into amateur teams like the Naptown Roller girls or other professional teams that have positive images like the Indiana Fevers.
  • Naptown Roller Girls or the Fever - Huh? Oh, yeah, you mean the teams that have little appeal or fan interest? They couldn't make money on their own.

    The biggest part of the problem festering in the sporting world is the salaries of the participants. If the Unions don't give in to demands and needs to lower wages significantly, they can begin to kiss goodbye a good number of teams around the country in several sports. Then who wins?

    Bet it will be many, many years before we see a groundbreaking on a facility like Lucas.
  • If we canno afford the teams, we cannott afford the teams. Either they figure out a way to play in Indianapolis or they leave. Case closed. Besides, there is going to be a huge change in professional sports over the next several years. The Pacers won't be the only team shutting down.
  • Professional sports are in a world of hurt right now. Payrolls that are unimaginable. Let's hold out until the players unions decide that maybe the market can no longer bear these outrageous contracts. Maybe they will agree to a paycut in salaries in return for a guarantee that the players will have jobs. Because, without some concessions on all sides, teams are going to fold. NBA, NFL, MLB, etc.
  • BerwickGuy, The NRG played to a sold out crowd Sat. When was the last time the Pacers could say that. And when was the last time you heard the Fevers begging for handouts or starring on the front page in a shootout at a strip club?
  • The Fever are always begging for handouts from the NBA who funds them. The WNBA does not make money.
    So yes Teresa the Fever players are not caught at strip clubs or touting guns but their existence is solely because of the funding of the NBA. Which would lead one to make the assumption that if things get worse with the NBA and things have to be cut the WNBA might be one of those things to go.
  • Ask the players to pitch in and pay 10% of their salary to go to the costs of the stadium.

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