Loss of Pacers season would deal blow to CIB, state revenue

Scott Olson , Anthony Schoetle
October 11, 2011
Back to TopCommentsE-mailPrintBookmark and Share

Taxing bodies and downtown businesses are bracing for an economic body blow with the crushing impact of a Roy Hibbert pick now that cancellation of the Indiana Pacers' entire 2011-2012 season is a real possibility.

NBA Commissioner David Stern canceled the first two weeks of the regular season on Monday—including the Pacers first seven games—after owners and players were unable to reach a new labor deal and end the lockout. Failure to reach a deal soon could emperil the entire season.

If that happens, the Capital Improvement Board might lose $1.5 million in food-and-beverage taxes, and the state could miss out on $3.5 million in Professional Sports Development Area funds, CIB Chief Financial Office Dan Huge said at Monday afternoon's CIB meeting. The PSDA captures state sales tax revenue generated by downtown venues, including Conseco Fieldhouse.

Huge did have some good news to report at Monday's meeting. He said that through August, CIB is running $13 million over budget, largely because of improving tax revenue.

CIB’s proposed 2012 budget up for approval by the City-County Council on Oct. 17 is $77.5 million, up $4.4 million from this year.
Board member Michael McQuillen, who also is a City-County Councilor, doesn’t think the entire NBA season will be canceled. But if it is, he wants to ensure CIB is prepared to absorb the shortfall.

“I wouldn’t say the budget is rosy, but it’s solid,” he said. “I think [CIB is] doing a good enough job where the loss won’t be devastating, but $5 million [in CIB and state revenue] is $5 million.”

Life without a Pacers season has been on the minds of city leaders for several years, as team executives complained of multimillion-dollar losses and hinted that the franchise might need to move elsewhere.

In 2010, the CIB agreed to subsidize the Pacers's operation of Conseco Fieldhouse to the tune of $33.5 million over three years. Some opponents of the funding argued that the team, founded here in 1967, should fold or move to another city if it couldn’t be financially viable on its own.

“I guess it’s a case of being careful what you wish for,” Mark Rosentraub, a former IUPUI dean who has written two books about professional sports operations, said in an August interview with IBJ. “If Indianapolis loses the Pacers even for a season, it won’t be at all good economically for the city.”

Losing the team for a year would wipe out about $55 million in economic activity, according to a 2010 study done by Chicago-based Hunden Strategic Partners for the CIB.

The impact would stem from less money being spent at restaurants, bars and hotels, as well as to decreases in the Pacers’ payroll and diminished tax revenue for units of government.

“There’s going to be a real economic hit, and we’re going to feel that pretty quickly once we start losing games,” CIB President Ann Lathrop said earlier this summer.

“This city is also going to lose out on some significant branding opportunities (through television broadcasts and media mentions) without the Pacers and I think a sense of community pride,” Lathrop added. “It’s a lot more than just money.”

Downtown businesses have been bracing for a financial hit for months, anticipating a shortened or eliminated 2011-2012 season.

“For us, it would be a huge loss,” said Troy Gregory, general manager of Mo’s, a steakhouse a block north of Conseco Fieldhouse, earlier this summer. “There are games, including those when the Pacers play teams like Miami, Chicago, Boston or Los Angeles, where we do at least as much business as we would during a Colts home game.”

On big game nights, Gregory said revenue more than quadruples compared with a normal night.

“It would be a really big impact on us, and we’re far from alone,” Gregory said. “We’re hoping games don’t get canceled, but from what we hear, it doesn’t sound good.”

Downtown restaurant owners interviewed by IBJ estimated they each could lose as much as $500,000 without a Pacers season.

Parking lot operators also would take a big hit, with several around the arena saying they’d lose from $25,000 to $100,000 depending on the size of the lot and proximity to the arena, which dictates rates.

While hotels generally don’t see a lot of business from Pacers games, the Conrad does. The high-end hotel on Washington Street downtown has contracts with 23 of the NBA’s 29 teams that play here.

“It’s a good piece of business for us, and naturally, we’d hate to lose it,” said Greg Tinsley, the hotel’s general manager.

Tinsley said each team uses about 40 hotel rooms. The cancellation of an entire regular NBA season would cost the Conrad about 1,600 room nights. Though Tinsley wouldn’t say what the financial hit would be, it would likely be more than $500,000 after tallying room rates, meals and other charges.

The Pacers were scheduled to play 41 regular season home games and four pre-season games at Conseco Fieldhouse in the 2011-2012 season. So far, all preseason games have been canceled, as well as the Pacers' first seven games.

Including its playoff games last year, the Pacers drew about 620,000 people through the turnstiles in the 2010-2011 season.

Regardless of how many games are canceled, the CIB in January will give the Pacers the second of three $10 million installments to offset Conseco Fieldhouse operating expenses. The payment is related to building expenses at Conseco Fieldhouse, not operating the team, Lathrop said.


  • Lost Money
    The money that is lost is the 33.5 million paid to Pacers by the CIB. Of course the Pacers receive 1005 of any profits from events held at Conseco per their contract, we pay them if they pay and we play them if they don't play.
  • 10 for 5?
    The CIB shells out $10 million a year to get $5 back? AND they're paying it out even if there's not a season?! Great negotiating. Next mayor ("that's not going to do business the same way").
  • Disposable Income
    Tony is exactly correct. We're just talking about moving money around the metro area. No money is lost. Just reallocated.
  • Downtown may suffer...
    however, anything that was usually spent by a resident fan remains as disposable income that the fan may spend however they choose. Some folks might be able to do some major renovation projects with the money they won't spend. I don't see this as an economic loss so much as a reallocation away from the city center. Other than visiting fans, the money spent downtown does not disappear.
  • Read the last line
    It states the CIB will make another $10 Million dollar payment to the Pacers for Conseco operating costs even if there isn't a single game played. It should cost a lot less for lighting and heating if the building isn't used most of the winter. It looks like the Simons will make out just fine. I'm so glad the City decided to cough up an extra $33 Million over three years.
  • If the season is gone...
    ...do they have to pay back that bailout the city gave them last year? Probably not.
  • NBA Season
    The loss would be a hit but by next year the Pacers would be a memory and we adjust djusts without them. Then if the Simons threaten to leave, we can say "so long" we've adjusted and you've learned a very valuable lesson and your leverage is gone. The NBA doesn't matter anymore.

Post a comment to this story

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

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. The Affordable Care Act is not the reason for the slow recovery and lack of high paying jobs for low skill workers. This is a trend that has been going since the early 80's. The recovery is real in the sense that GDP has been growing steadily at a rate of roughly 2.5% since the recession ended in late 2009 (newsflash, the stimulus worked) and the unemployment has been steadily dropping. The reason issue we are facing deals with a skills gap (not enough workers with the right credentials / experience) and wage stagnation due to corporate America being focused solely on maximizing profits for shareholders and not caring about the American middle class. Why should they? Multi-billion dollar mutlinational companies keep offshoring their profits in order to avoid paying taxes (which makes our deficit worse) they convince Americans to fight amongst themselves. If you want to create jobs and reduce the deficit, raise the minimum wage and change corporate tax laws. Of course, if you want to continue to belive that tax cuts for wealthy create jobs (which they don't) and allow corporations and the wealthy to continue to make you cover more and more of the costs of maintaining infrastructure, funding the military and other government services, then keep voting Republican. Hopefully someday you wake up and realize what's been going on since Reagan took office.

  2. Helloooooo, my name is Kate. I am so joyous to share this wonderful testimony about what Dr. Osoijiakhena, a great spell caster, did for me and my family. I wedded a year and 6 months ago, we were very happy during this whole period, i really love my husband so so much. I started noticing changes when he started coming home late at night, he stop paying attention to me, i later found out that he was having an affair with another lady, i dont know what she did to get to him but she really got a hold on him. He started spending weekends with her, and threaten for divorce. I was so heart broken and devastated, i spent many night thinking on how to get my husband back. A friend took it upon herself to to introduce me to one Dr. Osoijiakhena, a great spell caster, who once helped her with a spell that reunited her family and helped her husband secure a very prolific job. Though i had my doubts and never believed, but i decided to give it a try because i was helpless. I contacted Dr. Osoijiakhena, the Spell caster, to help me reunite my family by bringing back my husband from that other woman and break whatever hold she had on him. He only just told me that it's a minor issue, once i provide and do everything he will ask me to do, then i will have my family back again. I did everything he required. And he did it!!!!! My husband returned back to me and pleaded for forgiveness, and i also secured a well paid job in a big company, just as the great spell caster, Dr. Osoijiakhena said. I am so so happy to share my testimony on this wall. I am using this medium to tell every one that has same or similar problem to try the great Dr. Osoijiakhena through his mail: drosoijiakhenaspell@gmail.com......he is so real!!!!! He can also help you with: (1) IF YOU WANT YOUR EX GIRL/BOYFRIEND TO RETURN BACK TO YOU (2) IF YOU WANT YOUR HUSBAND/WIFE BACK (3) IF YOU WANT TO BE PROMOTED IN YOUR OFFICE (4) IF YOU WANT YOUR MAN OR WOMAN TO LOVE YOU (5) IF YOU WANT A CHILD (BARREN) (6) IF YOU WANT TO BE RICH/WEALTHY (7) IF YOU WANT YOUR HUSBAND/WIFE TO BE YOURS FOREVER (8) IF YOU'VE BEEN SCAMMED AND WANT YOUR MONEY BACK (9) IF YOU ARE HAVING DELAY IN GETTING MARRIED (10) IF YOU HAVE A COURT CASE AND WANT TO WIN (11) IF YOU'RE A DRUG ADDICT AND YOU WANT TO REALLY STOP (12) IF YOU CANNOT IMPREGNATE A WOMAN (STERILE) (13) ALL TYPES OF DISEASES I advise you to contact the great Dr. Osoijiakhena, the spiritualist for solutions via his email: drosoijiakhenaspell@gmail.com

  3. Sergeant McNally is buried in Cathcart Cemetery on a hill known as McNally%u2019 Hill. The Cemetery is in a natural bushland setting and is very well maintained.The emergency department at Ararat Hospital is known as the John McNally Emergency Department. Cathcart is approx. 4.6 km from Ararat and is approx. 345 m above sea level.

  4. My spring chicken of a Mom is turning 75 years young. She is a big fan of Frankie and I think she would get a big kick out of the film. I wanted to take her to the Broadway play but am priced out. Thanks for your time and consideration. Oh yea, Wildwood! Joie

  5. I thought this company would go bankrupt in 2013/2014. I predicted that four years ago. I was wrong. It will take another couple of years, but they will get there.