The predicted effect of the National Basketball Association lockout on the local economy is an argument both for and against the public assistance so often lavished on professional sports franchises.
Last week’s page-one story about the lockout painted a bleak picture of the consequences if, as many expect, the Indiana Pacers season is lost to labor strife. A canceled season could wipe out $5.5 million in government revenue from sales, admissions and other taxes.
Downtown restaurant owners, parking lot operators and at least one hotel could lose hundreds of thousands of dollars apiece if fans and visiting teams stay home or spend their money elsewhere.
And the city itself will lose out on the marketing value of having its name show up on local, regional and national game broadcasts.
All of this suggests the city’s Capital Improvement Board did the right thing last year when it agreed to subsidize the Pacers’ cost of operating Conseco Fieldhouse, where the team plays its home games, to the tune of $33.5 million over three years.
We agreed it was the right move, even before the lockout came along, threatening to become a real-life example of the economic activity that could be lost permanently if the city turned its back on the Pacers, causing the team to fold or move.
The millions of dollars in fan spending that could be lost don’t even tell the full story of the financial hardship that would be caused if the Pacers decided to abandon the fieldhouse, leaving the city responsible for its operation. One study estimated the building, minus its flagship tenant, would cost the city $12.2 million a year.
Weighing all these factors, the city’s subsidy makes sense.
But the lockout is also a reminder that governments have little control over the operation of professional sports. The billions of dollars in public money spent subsidizing franchises across the country don’t buy mayors or governors a seat at the bargaining table when players and team owners wage war. No one negotiates on behalf of jilted fans, restaurant owners and governments.
In a perfect world, taxpayer money wouldn’t be invested in high-stakes ventures that offer elected officials no oversight role.
But in Indianapolis and dozens of other cities, that ship has sailed. Millions have already been invested, and officials prudently decided to spend the money necessary to protect that investment in the Pacers, a business that affects the pocketbooks of many who aren’t even on its payroll.
All we can do now is sit back, watch the NBA’s labor feud play out, and hope against all odds that the players and owners think beyond their own self interest.•
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