Senator hits nerve in CIB debate

April 3, 2009
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deloreanIn the quintessential exchange at yesterday’s Senate committee hearing about a potential solution to the Capital Improvement Board’s revenue shortfall, Sen. Lindel Hume, D-Princeton, asked Indiana Pacers Chief Operating Officer Rick Fuson about Jamal Tinsley’s salary. Fuson responded that he didn’t have that figure with him.

Hume didn’t follow up, and Pandora’s Box was slammed shut. In all the debate over the $35 million annually city and state officials need to come up with to operate Conseco Fieldhouse and Lucas Oil Stadium, the issue of players’ salaries has scarcely been broached. Let me start by saying the Colts and Pacers draft, hire and pay young men with extremely rare physical gifts and skills. And those gifts and skills don’t come cheap.

You could argue that those salaries are not germane to the debate. But they certainly put that $35 million into a different light. First, to shed some light on the Tinsley situation. He is due to make $6.75 million this season, $7.2 million next season and $7.65 million for the 2010-11 season.  It could be argued that Tinsley’s salary is especially relevant given that the Pacers over three years (unless they manage to trade him) will pay a player that will never don a uniform more than $21 million. That’s enough to operate Conseco Fieldhouse for more than a year.

But Tinsley’s paycheck is just the tip of the iceberg. Taxpayers are gnashing teeth over two extra cents for a beer and the Pacers are paying Troy Murphy more than $32 million for this season and the next two. Mike Dunleavy will get more than $29 million and T.J. Ford will net about $24 million over the same time period.

I’m not picking on the Pacers. The Colts too have a boat-load of highly-paid players. Their player payroll was near $93 million last season. Peyton Manning and Dallas Clark made more than $11 million each. Their salaries alone could just about cover Lucas Oil Stadium operations for a year.

Again, these are young men with rare skills. I don’t begrudge them their money—if the market bears it.

Another key moment in yesterday’s hearing came when Hume asked Fuson if he worked for Conseco Fieldhouse or the Indiana Pacers. A state lawmaker charged with making such a critical decision should know the city essentially owns Conseco Fieldhouse and for the last decade, the Pacers operate—and pay to maintain the facility. Hume’s question shows he lacks the most basic understanding of how the Pacers and Conseco Fieldhouse work. How then, can he make an informed decision?

It’s time that city and state decision makers start to understand the business they’re in. They’ve chosen to build this city and state on a sports platform. They chose—a long time ago—to go into the sports business. The Pacers and Colts, contrary to popular belief, have no gun to hold to state and city officials’ heads. Your elected officials made these decisions of their own volition.

And unless Michael J. Fox is standing along Capitol Avenue with a Delorean that generates 1.21 gigawatts, it’s useless trying to act like not finding a way to make the arrangements with the Pacers or Colts work is even an option. At this point, it’s not if we’re going to raise this revenue. It’s how? You’ve got $900 million in fixed assets sitting on two downtown parcels. Not even Biff Tannen would argue that letting them go dark is a good use of a public investment. We’ve started down this road. It’s time to finish the journey.

But if city and state officials don’t pay attention to the basics of these lease deals, how can they be expected to pay attention to more complex, yet very important facts about how these businesses that they entered work; Things like the player salary cap, collective bargaining agreements that govern players’ contracts and payment structures, and the league’s very revenue generation models. Only by digesting this information will they know the true expenses—and possible return of these business ventures for city and state taxpayers.

We all know by now the benefits of being in this business. Thousands of jobs, hundreds of millions in annual visitor spending, and a huge marketing bounce for being known as a major-league town. No one should be arguing that. But at what cost?

Only by taking the time to understand these things, will state and city lawmakers be able to make informed decisions the next time they need to decide if they want to stay in the business of sports.

The good—and possibly scary—news is this: Even without the Delorean, Conseco Fieldhouse will need to be replaced within 20 years. LOS might have another 25 years of life. The debate about the wiseness of Indianapolis and Indiana being in this business should resume only then.

Back to the future. You bet.
  • Anthony,

    You make some well stated points. You are right on with the need of the elected people needing to know what they're dealing with and what they're doing. What we have, in large part, at the State House is a bunch of Goobers acting important.

    I do disagree with you on one point. I don't think that facilities will became obsolete in the future as quickly as MSA and the RCA Dome did. Financiang options are drying up and won't likely change any time soon. Whom, for example, will be the next city to build a retractable roof stadium? We may never see another, but if so, it won't be like the dominoes we've seen in the past with cities playing a game of leap frog for the latest and greatest state of the art design. I believe those days are over.
  • @ BerwickGuy -- You're right, there are many good points here, though I don't know that Anthony explores one far enough.

    The venues were built largely with taxpayer money. Without them, the very talented athletes wouldn't have a venue from which to perform (and thus, not earn their very handsome livings). During the worst recession in most of our lifetimes, the community is now faced with raising MORE money to keep the venues open so the athletes can continue earning their very handsome livings.

    The Irsays and Simons *might* take some financial hit to help our bumbling CIB out of the jam they created for themselves (and we helped them create by keeping them on that board), but the Irsays and Simons are millionaires many times over. Most of us (mysefl included) are not. But the writing's on the wall, and we're gonna pay the lion's share.

    So who's missing from this equation of sacrifice and contribution to the common good? If you guessed the players give yourself 10 points and move forward two spaces.

    Our food pantries are operating at, or beyond, capacity as more and more people lose their jobs and try to find food. So what kind of cold-hearted arrogance and entitlement does it take to continue to collect your millions while the community goes broke so you can earn that money? Why aren't the team players stepping up to the plate? If the Colts agreed to a 5% pay cut that would equal roughly $5 million. Same with the Pacers. But the local media (I believe) is hamstrung from pushing the argument. How friendly is Peyton gonna be for an interview if you just wrote a column suggesting he fork over a few million for the privilege of earning many millions more?

    Anthony's right -- we've made this bed, tacitly or not, and are now going to be forced to find a way to keep these venues from becoming empty barns. It will take a team effort from all kinds of quarters (and raising hotel/visitor taxes is the wrong solution). Interesting that our local heroes are so quiet, isn't it?
  • Nothing is set in stone. Any deal can be re-negotiated, especially considering that the circumstances have significantly changed.

    It is time for people to start talking loudly about boycotting the Colts and the Pacers until they give up the corporate welfare and start giving back to the community. Until they do that, they are not local heroes. They are holding us hostage.

    IF the Pacers and the Colts operated as actual private businesses, without needing public funding to survive, then they could pay their players whatever they want. But they don't. And that's the point.

    Either the Colts and Pacers figure out how to run their businesses without the public's help, or they should give back a lot more to the public that makes them possible.

    Until then I refuse to enter Lucas or Conseco or watch either team on TV. If you actually care about our city, you would do the same.
  • @ Thomas're right, we need to start talking about boycotting. But someone in the mainstream press needs to carry some of this water for us, too. The IBJ doesn't have the same politics to play with the local teams, and Anthony can make these remarks knowing his column and work doesn't rely on a very close and ongoing relationship with the players. Nothing against the IBJ...I think they do a great job of covering news largely from a business perspective, which is how this story fits within their editorial mission.

    But the Star (after their top brass gets over the sunburns they earned on that
    free trip to Cancun courtesy of the Pacers...smells like conflict of interest, doesn't it?) needs to cover this story and this angle. Everyone's being asked to chip in (to one degree or another) except the millionaire players. Yes, the Irsays and Simons should be helping and renegotiating (after all, where are the teams going to move to at this point? So L.O.S. and Conseco go dark, and so do the teams? Not gonna happen). Everyone who performs in any of the taxpayer built venues needs to support it financially. It's pretty simple really. Visiting teams, musicians, monster truckers, the lot of 'em. After all, WE provided them a place to earn THEIR money...the least they could do is help us keep the places open (and in that sense, would seem like a shrewd business move on their part).

    So yes, boycott away (I can't afford tix to either, so I'm all in). But in a larger sense, the community needs to demand responsibility from the press, or boycott them too (and believe me, a good sneeze and Star's toast).
  • A boycott is a silly idea. The NFL and NBA all have salary caps to keep everyone spending the same amount of money for a reason. If you start asking players to take a pay cut to cover the CIB shortfalls, the Pacers and Colts will have a hard time bringing free agents into town. Why come here if they aren't going to get paid what other teams are offering? No good free agents or trades = bad records (moreso for the Pacers). It's harder for NBA teams to improve through the draft since they really only get 1 good pick a year. And if you can't improve through the draft, you have to depend on the free agent market in the offseason. Making good offseason moves will make the team better, improve the overall team record, and thus put more fans in the seats. More fans in the seats = more money to the CIB.

    Now, I am not saying the owners aren't responsible to chip in for this shortfall, but boycotting these teams just isn't the answer. We need to put good products on the field/court in order to help get back on the positive side of things. And asking players to take pay cuts just isn't a good option.

    Just my 2 cents...
  • Gee, what an astounding idea for the players to make an offer of their own to help alleviate the issue. Which one of you will be the first to step up? Peyton, Mike, Jeff, Troy, anyone........
  • Thanks for the comments. For another perspective on the market pressures on NBA salaries in particular, you can go here:
    I think the above link could address some comments about those issues and where the future might take us.
    Again, I would stress, only after local policy makers educate themselves can they consider strategies to work with local team owners to address things like player payroll and other expenses that small and mid-size markets are having diffiuclty with, along with potential solutions such as greater revenue sharing.
  • (I don't want to put words in your mouth), you're earlier column suggests that natural forces so to speak will help establish a new business model which would be more sustainable, yes?

    IF I have this assumption correct (and I'm often wrong), that's great, though it sounds as if that might come at a date somewhere off in the future...meanwhile, other policies are being written/enacted to cover the shortage.

    Having worked with folks at both the CIB and city council, I would suggest they're not the most well-read, well-stuided folks in the world (that doesn't, obviously, prohibit them from being elected, and in fact, might make that outcome more likely).

    If that market correction occurs, that's great. I cannot imagine Indianapolis being the first market to start the dominos falling...there's too much fear here, not enough knowledge, and so many of our economic development eggs are in the sports basket. So we'll be a late adapter. In the meantime, as Berwick Guy says, why aren't the players stepping up (I do appreciate the draft/talent issues presented by Say Anything. But there is philosophical question here too that cuts to the heart of this, which is why are we throwing money to what are essentially small businesses (players) who are (outside of their business of performing) doing nothing in this time of tremendous community contraction? (And of course, the subquestion remains: why isn't anyone else in the media asking the question...or is the media really becoming extension of team PR departments?)

    Thanks for the link Anthony, I appreciate it!
  • Anthony started this post criticizing lawmakers for not understanding how the sports stadiums funding model works. The same could be said for some of the posters. When you say that athletes are not contributing to the problem/solution that is not true. Everyone who works at Conesco, Lucas Oil and Victory Field, plus the Convention Center, has their local option income tax dollars (yes including that 0.65% increase from 2007) going to the CIB to pay the bonds (mortgage) on CIB facilities including the new stadium. For the Colts estimated 93 million player payroll that's some $1.534 million. Visiting NBA, Fever, NFL players pay the local option income tax portion of their salaries into the same CIB pot. Unless the average taxpayer works in those facilities, those playments are payments the rest of taxpayers don't pay.
    Should players and the teams do more? Yes. But to say that they are not contributing anything is wrong. It's not just lawmakers that don't understand. It's all of us.
  • The first thing the State should do is audit the Pacer's books if they are interested in making an informed decision about whether or not the billionaires need any taxpayer money.
  • @ Truth
    Good points, and you're correct, there are lots of elements to this that I don't know or understand (though I did know the players and visitors pay a small tax to the CIB, though when you look at it on paper it appears to me that it's woefully low).

    My point, I think, has more to do with the idea that a small contribution from the players would both help the financial situation and send a signal that they actually care a white about the community which makes it possible for them to perform (and become pretty comfortable at the same time). No doubt about it, it's a complicated issue in many regards. But having a sense of decency and fair play (words once used to describe the supposed character building outcomes delivered by team sports) doesn't seem to be all that complicated, at least to me.

    I live in Marion Cty, pay my taxes, can't afford tickets to either team's events, but don't have a problem with supporting them. I just believe that our support for them is far out of balance from what we realistically (as a smaller market) *can* support. The players should know this, the teams should know this. So do we really want them here if they're content to sit and watch us starve (either metaphorically or literally)? And again, what does it say philosophically about the local media if that's a question that can't get asked ?
  • And of course, the subquestion remains: why isn’t anyone else in the media asking the question…or is the media really becoming extension of team PR departments?

    I'd say the local media have a bunch of advertising dollars at stake in this situation and therefore will find it incredibly difficult to be critical.
  • It is true, the Pacers and Colts have a lot of media partners in this town. They wouldn't be the first big sports property in this town to quiet a critical voice.
  • As Count Dracula once said, without me this town will be as dull as Bucharest on a Monday night. The same goes for Indy if the Pacers depart.
  • Truth teller, If ignorance is no excuse for breaking the law ... it's certainly NO excuse for making laws ... or at least passing (poorly thought out) legislation.

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