Marion County’s Capital Improvement Board may be preparing to swallow an extra $15 million in expenses to keep the Indiana Pacers in town, but one sports business expert said the aid shouldn’t come without conditions.
“They have to demand something in return from the Pacers, either more community involvement or some measures from management to assure the long-term success of this enterprise,” said Larry DeGaris, director of University of Indianapolis’ academic sports marketing programs. “If this assistance is given with no strings attached, area residents have a right to be mad. And I think they will be.”
Pacers officials haven’t asked for the help, but CIB members yesterday said they expect to take a $15 million hit next year from a provision that allows the team to renegotiate its Conseco Fieldhouse lease after 10 years.
Board members met yesterday to begin tackling the organization’s $43 million annual operating shortfall, including the expected $15 million.
“The challenge is to renegotiate,” CIB President Bob Grand said of the lease. “[The Pacers] have an option to have these discussions.”
The Pacers likely will seek to sweeten a lease deal with the city to help subsidize recent financial losses. The Pacers lost $1.3 million in 2006-2007 and $6.5 million in 2007-08, according to Forbes magazine. Home attendance last season averaged 12,221, last in the National Basketball Association.
Pacers officials declined to be interviewed yesterday afternoon, but issued a statement from Rick Fuson, chief operating officer of Pacers Sports & Entertainment.
“Conseco Fieldhouse is one of the state’s most important public gathering spaces, and its continued success is so critical to all of us,” the statement said. “We have enjoyed a great long-term partnership with the Capital Improvement Board, and we are extremely grateful that they are addressing these difficult issues. The CIB is early in their effort, and we will work faithfully with them to be as helpful and supportive as we can.”
In addition to the $15 million Conseco Fieldhouse expense, the CIB’s shortfall includes a $20 million deficit for Lucas Oil Stadium, $5 million for other CIB operations, and $3 million in additional funds for the expanded Indiana Convention Center.
CIB members said if they don’t come through with aid for the team, the Pacers might be forced to move. But DeGaris wonders where the team would move.
“There aren’t a lot of markets clamoring to get an NBA franchise right now,” he said. “I don’t here many cities saying ‘We’re eager to build a state-of-the-art facility. Come on in.’ And there aren’t many communities with ready-made facilities.”
Still, DeGaris thinks city officials would be foolish to let the Pacers hit the skids.
“What are they going to do – shutter these facilities until the economy gets better?” he asked. “That’s unrealistic. Those operations would never come back, and that would cripple downtown.”
The Pacers aren’t the only NBA team struggling. Sports business experts estimate that at least one-half of the league’s teams are losing money this year.