IBJNews

Study: Pacers, Fever add $55M to local economy each year

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Pacers and Indiana Fever contribute an estimated $55 million a year to the Indianapolis economy, according to a study conducted by Chicago-based hospitality consulting firm Hunden Strategic Partners.

Together, the professional basketball teams—which host a combined 77 games annually at Conseco Fieldhouse—support 900 jobs and draw about 700,000 fans to the downtown venue, the study found.

Hunden Strategic Partners released the results at a Monday meeting of the Capital Improvement Board, which commissioned the study as it weighs whether to take over $15 million in annual Conseco Fieldhouse operating expenses.

The board has been negotiating for months with executives of the basketball team over who will pay the operating expenses. Now, Pacers Sports and Entertainment shoulders all costs and manages the arena without any contribution from the CIB, which owns the venue.

The Pacers, however, contend annual operating expenses are higher and peg the figure at $18 million.

A provision in the Pacers’ lease allows the team to break the lease after 10 years if the NBA franchise is losing money, and officials say the team lost $30 million in the 2008-09 season and sustained “heavy losses” last season, too.

The Pacers have said they will begin seeking other alternatives if a deal is not inked by June 30. CIB President Ann Lathrop said her interest is in making sure the deal is done "right" regardless of the deadline.

Lathrop declined to divulge how contract negotiations are proceeding, but she expects Hunden’s findings could help justify keeping the team in the city.

“I feel like the study is very important,” she said. “This allows us to have a benchmark relating to the true economic impact" of the Pacers.

The cash-strapped CIB didn't pay for the $30,000 study, she said. Instead, she said the Indianapolis Bond Bank picked up the tab because “the health of downtown is critical to the overall debt” of the city.

The study concluded that without the teams, Conseco Fieldhouse would have a $17.7 million annual operating deficit, including $5.5 million in lost admissions, food and beverage and income taxes.

The Fieldhouse hosts an average of 483 events a year, including the 77 basketball games, drawing 1.5 million attendees. If the Pacers and Fever left, total attendance would drop to about 800,000.

Indianapolis also would take a hit in terms of overall downtown activity and community pride, said lead consultant Rob Hunden, a former economic development official for the Indianapolis Bond Bank under then-mayor Stephen Goldsmith.

“To lose one of its anchor sports tenants, it’s emotional, if not financial,” Hunden said.

If the CIB picks up the $15 million annual tab, the additional expense will add to the board’s already fragile financial condition.

CIB members spent much of 2009 grappling to overcome a projected $47 million deficit this year. The board has improved its financial health by making $26 million in cuts and by avoiding $25.5 million in debt-service reserve payments.

Lathrop said the CIB will continue to look for potential cuts and will continue to keep costs down.

The not-for-profit now is on target to turn the budget deficit into a surplus—additional money that could be used in negotiations with the Pacers.

ADVERTISEMENT

  • Thought
    Ok children here it is: Pacers are run by the most ruthless landlord in the world; literally. They know how to begin renegotiations on a lease. However, they have no leverage. CIB should only be listening to the SIMON'S/PACERS' WHINING if the CIB is getting all non-Pacer revenue and the Pacers extend for another 20 years. With that lease extension and new source of revenue, CIB could leverage the costs to make sure the Fieldhouse systems have capital for replacement and enhancement. Second, Lucas has nothing to do with this. CIB runs it because it is part of the Convention Center business. The Colts are simply a co-tenant who uses the facility 10 TIMES A YEAR! CIB gets revenues here, but it is also an extension of the Convention Center. Totally different. For an apples to apples, take a look at the Indianapolis Indians deal #http://www.capitalimprovementboard.org/agreements/INDIANS_Sublease%20Agmt.pdf#.

    This is simple and straightforward. CIB should be getting the world if they take over the expenses for the Pacers. They won't because everyone on that Board is a hack, gov't contracting, henchman. We need more representatives on the Board who know how to run a profitable business and manage risk. Not cronies who feed at the taxpayer trough. That and the fact that the NBA is a joke as an organization are the two major problems here.
  • Will They Restate their 2010 Budget??
    Was it not reasonably foreseeable to include amounts for the Pacers?? I was perusing there 2010 Budget...

    Yeah why know financial results to the public for 2009? What sausage are they hiding this year...? I see your point...

    I am looking at the 2008 results they speak of having contractual rights in the lease to stand up to the PACERS but I guess thats what you lie and say to your Auditors... They knew last year they were going to assume this obligation... They should restate last years results sounds like this obligation really should have been accrued.

    They take us for a bunch of Country Bumpkins.
    • ANN WHAT IS YOUR FINANCIAL SKILL SET???
      Read Note 18 in the attached... How can the CIB have discussions about financial committments when they still do not have there house in order... After last years debacle and the delay in issuing their results until September 2009 for 12.31.2008 results they are absoulute puke. If I was President of the CIB the Audit would be complete by 2/28/2010 for 12/31/09 results we would publish our report to the public by 3.15.2010. WHAT A BUNCH OF LOW CLASS BOOBS ON THAT BOARD.
      BUSINESS 101 GET THE NUMBERS. The CIB shop is not in order. You expect them to get financial details from the Pacers? They cannot even get theirs out timely. AN ENTITY THIS LARGE SHOULD BE PRODUCE QUARTERLY RESULTS TO THE PUBLIC. ANN just what the hell is your background???

      http://capitalimprovementboard.org/financialreports/CIB%20Annual%20Financial%20Report%202008%20Re-Issued.pdf
      • NO DISCLOSURE
        IF HUMBOY had any self respect he would have ndicated he could not produce a REPORT WORTH THE PAPER IT WAS WRITTEN ON without pertinent financial data disclosed. This report is a RIPOFF. FIRE ANN I am sick of these worthless scabs stealing money from the taxpayers.

        I would rather agree to do something for the SImons but do it based on FACTS.

        I am not averse to something but I am under this worthless bunch of SCABS on the CIB.
      • HumRipperOffer
        That report is pathetic. It looks like if formatted properly it would be 10 pages at most... It is latent with "So Called Assumptions". You are indicating the attendace information is misrepresented in the report?

        There is no doubt the Conseco Facility has suffered since the City committed to Lucas Oil... Were there provisions in the agreement to compensate the Simons for this "New Stateof the Art Facility" ? There is no doubt that impacts Conseco's ability to get events...
        That is unfair to the Simons.

        Lets discuss disclosure of the Pacers Financial Results as opposed to BS and Conjecture.

        Perhaps a "true partnership" is in order with full disclosure.

        There is no doubt the product the last few years the Simons have put on is suspect.

        Lets see there numbers and then discuss.

        Humbeatoffs report is not worth $2,500. Whoever hired him should apologize for WASTING TAXPAYER MONEY. SHAMEFULL PIGS.
      • Attendance Reports for the last decade or so
        Looks like 2010 was the best in recent years...

        http://espn.go.com/nba/attendance
      • Get the $30,000 Back CIB
        Well, seems the highly esteemed Hundon Whatever Partners fudged their attendance numbers a little; they quote 700,000 people attending the Pacer's games. WELL the NBA would be a good source to find the REAL #, which is 582,295.

        Mind you the Pacer's were GIVING AWAY tickets for probably half the games and those were included in the 582k number. I had a client in town from California and we were solicited tickets for $2 a piece! To bad we were eating at Moe's on business and contributing to the downtown establishment and it had nothing to do with the Pacers.

        Stories aside, if this Hundon firm can't get the REAL attendance #'s right, this report is a SHAM and WASTE of taxpayer money$$$. Get more concerts in there; it looks like the biggest bang for the buck. Bye bye over-paid and mismanaged Pacers.....do I hear the Hornets knocking???
        • Has The Internal Revenue Service Reclassified Pacers as a "Hobby?"
          Has The Internal Revenue Service Reclassified Pacers as a "Hobby?"

          http://www.ogdenonpolitics.com/2010/05/has-internal-revenue-service.html

          • City Spends $30,000 On Useless Study To Tell You Why You Should Give $15 Million A Year To Billionaire Simons
            City Spends $30,000 On Useless Study To Tell You Why You Should Give $15 Million A Year To Billionaire Simons

            http://advanceindiana.blogspot.com/2010/05/city-spends-30000-on-useless-study-to.html
          • $
            All suggestions for a full and complete picture of the finances are well-taken. It doesn't appear that this document provides that.

            Also, in order to make informed decisions the public should also be provided the lease terms of other NBA teams and other pro teams, including the Colts. That would be a real eye-opener! I believe what the Pacers are seeking pales in comparison to what the Colts receive.
          • Let the Pacers breach
            Before the city considers any renegotiation of a binding contract with the Pacers I would certainly insist upon full, preliminary financial disclosure by the Pacers by production of certified financial statements, including a balance sheet, cash flow statement and income statement. To ensure that these statements are accurate and fall within the guidelines of generally accepted accounting principles they should be audited and certified by an outside accountant. Without certified financial statements how can we trust their numbers. The CIB study is speculative at best. We are under no legal obligation to open new negotiation of an existing Pacers' contract which is nowhere near expiration. If the Pacers wish to breach we can obtain certified financial statements in litigation. Reasonable businessmen don't object to full financial disclosure. As far as I'm concerned it should be a precondition to even preliminary discussion of financial hardship by the Pacers. My strong inclination is to stop talking. Let the Pacers breach.
          • $30,000 for this?
            What is missing from this study is any financial data from the Pacers. The study notes this; "It should also be noted that access to actual Conseco Fieldhouse and Indiana Pacers data was not provided due to the proprietary nature of the data."


            Http://www.capitalimprovementboard.org/aboutus/pressrelease/Hunden%20Report.pdf
            • Pacers hide financials, CIB Takes Word
              Pacers' economic study: Pay our operating costs, or we won't!

              Let's follow the bouncing logic here: The Pacers shouldn't have to pay operating costs because if they didn't pay them, the city would have to. So if they left, the city would be on the hook for operating costs anyway, so why not just let them stay and pretend they'd left, and have them pay nothing? I can't wait to try this argument out on my landlord!


              http://www.fieldofschemes.com/news/archives/2010/05/4158_pacers_economic.html
            • Hunden Strategic Partners
              Hunden Strategic Partners - Any conflict of interest concerning the author of this study? Doesn't anybody look into these things anymore?
            • Save the pacers
              The Pacers have lost money every year and cost the Simons over $200 million over the past decade.

              This reports proves that the Pacers are so important to the city so we must save them.

              We must purchase the team to save our city!!!!!
            • Greenbay has it right
              CIB should not be offering anything, since the Pacers claims of losses are not supported.

              The mayor and cib should enforce penalties for breaking the 20 year contract and be prepared to use the right of refusal to purchase the team. Jim Morris says they lose money every year, so a purchase price of $1 is appropriate.
            • I'm a Psychic
              I said between 50-60 million would be the amount that the study said the Pacers contribute to the economy. Now where can I send my consulting fee?

              My suggestion would be for the city to take over all operating costs, Charge the Pacers a fee per game, the city keep all revenue(concessions,parking) from all events held there including Pacer's games. Any money owed on naming rights would also go to the city. If the Pacer's didn't like it then they could leave. No other city is able to offer the Pacer's any better deal that I know of.
            • Study
              What is Hunden Strategic Partners' connection to the Pacers and to the Simons? Was any part of the "study" funded by either?
            • Do a proforma
              This may be the "impact" but what is the actual bottom line? Total expenses to the city, up keep, police, traffic, depreciation, power, water, repairs, ....Too often, as with the Colts and Lucus Oil, they talk about the impact, or what the revenue is, but not the total costs.
            • Net economic analysis
              An open, honest, and clear presentation of all the facts is sorely needed.
              All money received, broken down by source, to pay for the fieldhouse etc. or to subsidize the team must be taken into consideration before we can make an intelligent analysis.
              • Management Contract
                Oh yeah I will manage it too. Also Lucas Oil and the Convention Center...

                Ante Up Baby!
              • Talkin Commissions Baby
                I will take care of releasing Conseco to the Pacers Sports Corp. Yeah baby lets see my commission will be BIG TIME!!

                Its surplus city property isn't it. You dumb taxpayers just keep fillin my pockets...
                • I agree
                  To say the Pacers "add" $55 million is somewhat misleading. Is that money that would not be part of the local economy if they left, or simply money that would be spent on some other local form of entertainment?
                • incremental value please
                  Hopefully the decision makers will ask the prudent questions such as what portion of the estimated $55 million is real incremental economic value to Central Indiana such as revenues from opposing teams staying at local hotels versus fan tix, food, beverage, etc. which would likely be spent on other forms of local entertainment absent the Pacers.

                Post a comment to this story

                COMMENTS POLICY
                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
                ADVERTISEMENT

                facebook - twitter on Facebook & Twitter

                Follow on TwitterFollow IBJ on Facebook:
                Follow on TwitterFollow IBJ's Tweets on these topics:
                 
                Subscribe to IBJ
                ADVERTISEMENT