After receiving $30 million in taxpayer help the past three years, Pacers Sports & Entertainment isn't set to get any subsidies in a new budget that will be unveiled Monday afternoon by the Capital Improvement Board, according to the board’s chief financial officer.
Discussions, however, continue between CIB officials and Pacers officials on “future lease agreements” involving Bankers Life Fieldhouse, home arena for the Indiana Pacers and the Indiana Fever professional basketball teams, according to CFO Dan Huge.
CIB is the city-controlled entity that owns Bankers Life Fieldhouse. The board leases the arena in downtown Indianapolis to the Pacers for $1 per year, with the Pacers bearing the costs to operate it and keeping any profits it can earn while doing so.
In 2010, CIB agreed to provide the Pacers $30 million over three years to help cover the costs of operating the facility.
“The CIB and Pacers continue discussions about future lease agreements,” Huge said.
When asked if the Pacers had requested another installment of the loan, he said, “I am unaware of that," but reiterated that CIB and the team have had discussions about a future agreement.
A call to Pacers spokesman Greg Schenkel was not returned Monday morning.
The last of three $10 million payments was made by CIB to the Pacers in January, which was designed to help the team through the 2012-2013 season, Huge said.
The Pacers’ lease on the fieldhouse runs until 2019 and the team would have to pay back at least some of the subsidies if it leaves Indianapolis before then. The team is owned by Herb Simon, who made his fortune in the shopping mall development business.
During the 11 years after the fieldhouse opened in 1999, the Pacers organization said it lost money every year but one on its operations. Team officials said they spent $14 million to $18 million each year on operations, but did not recoup enough from hosting events at the venue to turn a profit.
The subsidy agreement, which also included at least $3.5 million and as much as $8.2 million for capital improvements, was opposed by only one of CIB’s members. Douglas Brown said he preferred that the city and team craft a longer-term deal right away, rather than delaying for three years.
The Pacers’ request for help—initially to the tune of $15 million per year—came while CIB was in the midst of its own financial crisis. The board was struggling to balance its budget mainly because of higher operating costs for the new Lucas Oil Stadium compared with the old RCA Dome.
CIB's 2013 budget will be released Monday at 3 p.m. The board's budget must eventually win approval from the City-County Council.