Pacers' long-term future at issue

February 16, 2009
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sternAs long as Indiana Pacers co-owners Mel and Herb Simon are alive, I’m convinced the team will not move out of town, and certainly won’t fold. I’m not convinced there are many other people who would endure the financial losses the Simons have in running the Pacers. Quite frankly, precious few could afford to, even if they are lured by the promise of making a profit when they eventually sold the franchise.

That’s why the team’s long-term future could hinge on talks that began this month between NBA Commissioner David Stern and National Basketball Players Association chief Billy Hunter. If the cards Pacers officials are showing city and state officials are a true representation of the team’s financial situation, the team is awfully close to a no-win fiscal proposition—in the current climate.

The Pacers are not alone. According to Forbes, 10 or 30 NBA teams are losing money. Sources inside the league tell me it’s more like 15—maybe more. I wasn’t sure about that until I heard about Hunter's eagerness to open up talks with Stern about restructuring the players’ collective bargaining agreement with the league. The deal doesn’t expire until 2011.

No way Hunter is willing to talk unless he thinks the league’s in real trouble—and worse, could contract. That means fewer players with jobs. And that’s bad business for the union. While some have questioned Pacers officials’ claims that the team has lost money nine of 10 years in Conseco Fieldhouse—including the year they went to the NBA Finals, Hunter knows this is serious. He knows without owners willing to take heavy year-after-year losses, NBA teams could go away.

“We all understand that we live and benefit from the success of the NBA,” Hunter told reporter’s gathered over the weekend for the NBA all-star game. “The last thing we want to do is see it lose its vitality.”

The current collective bargaining agreement has mechanisms to deal with a sluggish economy. The salary cap and luxury tax levels are based on a percentage of the league’s total basketball-related revenues. The cap is set at 51 percent of the league’s basketball-related income. It may be time to lower that percentage, so teams have more money to put toward operations.

Suggesting, even in turbulent economic times, that the league and players union will easily reach an accord on players’ salaries is silly. But Hunter’s willingness to open up a dialogue shows that players and owners alike realize the severity of the problem.
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  • The financial crisis is uncovering many ponzi schemes like pro sports were larger public subsidies and Enron accounting can no longer support $100 million player contracts, lavish spending, and poor management.

    Taxpayers are tapped out and its time team owners and players join the real world.
  • If Hunter is serious about saving the league, he should be willing to pony up a 15-20% accross the board player salary cut. Without that, the league, as it exists today, is headed toward doomsday.

    AND, no more GUARANTEED contracts for the punks that continue to exist off financial stupidity granted by people that should have known better.

    All the greed in this country is now manifest destiny. And this came about by the I don't care about any one else, I want mine now! mentality!
  • The Pacers released the following from a press release this afternoon:
    Pacers season ticket holders will benefit from their commitment with reduced prices across all seats in Conseco Fieldhouse for the 2009-10 NBA season. The new plans reward loyal Pacers customers and help fans face a difficult economy. The announcement to current season ticket holders this week offers seats close to the action at great prices. Along with the new prices, the Pacers have created a new payment plan that allows season ticket holders to make payments over a 10-month period without finance charges.
    “We feel we are offering the right price for the time,” said Jim Morris, President of Pacers Sports & Entertainment. “In talking with team owner Herb Simon about ticket pricing, we recognize that our economy is in a difficult period and we want our fans to be able to continue attending games. Our franchise has made some great strides in the past year and we have a chance not only to reward our current season ticket holders, but to welcome others that want to join in the experience of great NBA entertainment in the best basketball building in the world.”
  • The NBA stinks. Too many slam dunking thugs right out of HS or college drop outs without degree. Most of them are broke shortly after their B-ball career is over because they're too stupid to manage their money. Sorry...I know I will get drill for saying this.

    The NFL isn't too far behind either.
  • Time for this city and its residents to start living within their means.

    Want to see a football or basketball game? Go to a high school game. Your tax dollars paid for it!

    Want to see better competition? Head to West Lafayette or Bloomington. Here again, your tax dollars paid for it!
  • Whoa - better competition.....in Bloomington? Are you talking about the Y? That other team that used to be legendary, no way, they couldn't beat a team of their mama's, let alone some of the high school teams. Talk about a waste of our tax dollars. The mess in Bloomington, in many, many regards just about sums it up.
  • I knew I was going to take heat for that recommendation!
  • I don't agree with everything that has gone on in Bloomington, but let's not forget this. Revenue generated from the football and basketball program for many years has paid not only to support its own program but for programs of dozens of non-generating sports programs on that campus. Many would argue those programs make the institution more well rounded. Ditto for Purdue. Football and basketball has, and likely always will, be the economic engine that fuels all other athletic programs. As for the level of competition in Bloomington, I'm not the biggest Coach Crean fan, but you'd have to be a fool not to think that program will be very competitive in the Big 10 within the next 2 to 3 years.
  • Problem is NOW. And that engine you mention is only clicking on a couple of cylinders. Let's just see how much more $$ that taxpayers have to fork over to bail out the financial mess in Bloomington. After all, they can't raise their rates higher than their competition, or can they?
  • The Pacers understand economics and realize that they have less pricing power in this weak economy, so they lowered ticket prices to get more people to go to the games so they make more money on a higher volume of customers.

    They also understand competition and realize that their ticket prices will be less than the Colts tickets which just got increased.

    Now we just need to teach both the Pacers a& Colts that backdoor taxpayer subsidized bailouts should not be used to skew pure competition and good business practices of adjusting expenses to be lower than income to make a PROFIT.

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