Indy's sports strategy under fire

February 9, 2009
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Twenty five years ago, Indianapolis rolled the dice, betting that building this town on sports—amateur and professional—would be a good way to shed the Nap-town image that had dogged the city. The gamble paid off for decades, but now it’s coming up craps.

Mark Rosentraub, a sports economist and author of two books about professional sports business, calls Indianapolis a “broker town,” in a book he will publish this summer.

“The city must constantly broker itself 24/7, and in a flagging economy it doesn’t work,” said Rosentraub a former IUPUI dean. He added that without continued sales and marketing efforts to draw visitors, conventions and other business to the city, the strategy will fail.

In the years since Indianapolis started its growth strategy built on sports, Rosentraub said, there’s been upside and downside.

“Average wages have not increased and the city’s population has stagnated,” Rosentraub said. “But the city has created a vibrant convention business and created one of the best looking and pedestrian-friendly downtowns in the Midwest.”

While there have been quality of life gains, Rosentraub said, the financial justification for deals to build Conseco Fieldhouse and Lucas Oil Stadium are more difficult to come up with.

“The way you answer the question ‘was it worth it?’” Rosentraub said, “is you walk around this city, then take a look at cities like Cleveland, Detroit and St. Louis, all of which are struggling. And ask yourself, ‘do you like the way Indianapolis looks? Do you like the amenities you have here?’ If the answer is ‘yes,’ then the strategy worked. If you’re looking for cold hard cash, you won’t find your justification.”

To read more about the fiscal crisis revolving around the city’s sports venues and the issue of teams vs. taxpayers, click here. To read more about the Indiana Pacers mounting challenges at Conseco Fieldhouse, click here.
  • To be completely honest our new head pf the ICC seems like he really gets it & will hopefully help propell Indianapolis into the next level!
  • It seems fair that if the city and/or taxpayers are going to take on this burden, then they should also share in any gains in the team's value over the years.
  • So, what makes more sense, spending the residents' tax dollars on amenities and improvements that the residents use (i.e., schools, roads, etc.), or spending the residents' tax dollars on amenities and improvements that visitors use (stadiums, convention centers, hotels), with the expectation that those visitors will spend money at the businesses that the residents own and work at, and get the residents the benefit of their tax dollars via that income.
  • I am not exactly sure what Rosentraub is trying to say. I think the cold hard cash is not that hard to find. Look at the increased revenues to businesses in the city. Look at the increased property, sales and income taxes. That would be the cold hard cash. Now is it the same as saying Boeing is moving here and brining 5,000 high paying jobs, no. But there is certainly a cash infusion into Indy.

    Indy is not the only city in the nation with financial issues, and the issues with the CIB seem more like they got caught in a cash flow issue. Long term this is a speed bump.
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  • Mark Rosentraub is a nut. You don't walk around big-league cities like Cleveland, Detroit and St. Louis, you walk around Columbus Ohio and Louisville Kentucky, which are still doing fine without major league sports.

    The sports racketeers failed.

    Indyman, you drank the Koolaid too. Increased revenues ? What revenue ?

    For the real story, watch:
  • Uni,

    If you think Louisville is doing fine, you neither live there nor have followed the city very closely. Their downtown redevelopment strategy is a failure, they are building a sports stadium at taxpayer expense without having a professional team to play there. The idea is to try to compete with Indy for convention business. They are using TIF and guaranteed moneys from the City. They are Indy 30 years ago. One trick pony in the Derby and that is about it. They are not big enough to have a large footprint and they failed to carve out their own niche like Indy did to create success. Even their biggest success , the FFA convention, is a little bit of a slap, they got chosen to share with us because the FFA wanted to have a location that was somewhat rural and small town. Ooops, not exactly what Lville is wanting to be known as.

    Columbus is kind of a footnote on the national scene. You say Columbus and other than OSU, most people do not know it exists. And yes they do have professional sports, they have a pro soccer and NHL teams. I guess the fact that you did not mention them shows the identity problem Columbus has.

    Indy is not broke, and most experts say like the State, Indy is doing better than many of it's midwestern neighbors. You want to talk broke, go to Michigan and Illinois. Bart did screw up when he did not include the cost of maintaining Lucas Oil in the initial construction. He then tried to pass the buck. So now Indy does have to figure out how to pay the day to day bills.

    Of course it is not as bad as the Star tries to make it out. one of the reasons for the shortfall is because the stadium is not operating at capacity. All agree, the stadium will not be fully functional until the CC expansion is complete in 2010. Until then, the construction is going to severely limit the number of events held there thus making the revenue lower and the deficit appear larger. I had to laugh at the video. The guy did a good job for what I assume is a high school AV project. But he really discredited himself when he stated the stadium would only be used 15 times a year. Wow, he missed big time on that. When the CC is up and running the LoS will be used at least 200 times a year. For events as diverse as high school, college and pro football, to NCAA championships in different sports, monster truck and moto cross events, concerts, conventions, trade shows etc....

    He also had me chuckling when he blamed the Simons for the downfall of Eastgate and Lafayette Square malls. Really? Yeah, that is believeable. I guess it had nothing to do with the fact that they declined because of changes in the demographics. But that would be bringing truth into it.
  • After I posted, I noticed this article on the IBJ website.

    State Sen. Luke Kenley (R-Noblesville) said today that both the Indianapolis Colts and Indiana Pacers are interested in helping the city’s Capital Improvement Board dig out of its $43 million annual operating deficit.

    The organization’s shortfall also includes a $20 million deficit for Lucas Oil Stadium, which is roughly twice the size of the former RCA Dome and more expensive to operate. The CIB and the Colts split the revenue from outside events, which should become more numerous once the expansion of the convention center is completed in 2010.

    Pretty much says what I did which is the deficit looks monsterous due to the CC expansion. I am glad to see both the Pacers and Colts step up to help. Now they need to make it a significant contribution to help the City. The goodwill they will engender will far exceed the cost of their help.
  • Great post, Indyman. It really clears up some of the misunderstandings that many citizens continue to have. One issue that always gets me is when people complain that we built a stadium for a rich guy. Those complainers have not a clue of the overall worth of this asset to the city, the potential business and resulting income it can generate, and various other issues relating to Lucas Oil Stadium. Case in point, if that stadium had been built solely for the dates the Colts use it (10 home games per year), it would never have happened.
  • Didn't the Pacers just release figures showing they have lost money every year except one since the Fieldhouse was opened? How will they step-up?

    And why would Irsay do so?
  • I think the Pacers are creative accounting. As the article states, it is easy to claim losses, it is different to prove it. The Pacers have not had to open their books to the City. They will if they ask for relief. If the Pacers have taken losses as they claim, they could always take less of a payment to help the City.
  • Louisville is currently building a new riverfront arena. Perhaps the pacers would be interested in moving there.

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