Pacers to stay in Indianapolis for another three years

13 July 2010 | Posted in Hosting, Basketball | By Nick Forrester

The National Basketball Association’s (NBA) Indiana Pacers have signed a three-year agreement with the Indianapolis Capital Improvement Board (CIB) to keep them in the city of Indianapolis for at least another three years through the 2012-13 season.

The deal will cost US$33.5 million in taxpayer money over the three years. US$10 million a year will be used to help operate Conseco Fieldhouse, which is reported to cost US$18 million to run. The city will also pay US$3.5 million for improvements to Conseco, but has the potential of increasing to US$4.7 million.

“After tough and deliberative negotiations, we have reached an agreement to preserve the viability of our downtown economic engine, keep the Pacers as the Conseco Fieldhouse prime tenant, preserve the thousands of jobs impacted by Fieldhouse activity, and maintain the millions of dollars in tax revenue generated by this same activity,” said Indianapolis Mayor Gregory Ballard. “Our charge was to preserve the city’s downtown economic vitality while protecting taxpayers across Indianapolis. The agreement we’ve reached achieves this and, very importantly, involves no additional tax increase.”

In May, the CIB released a report produced by Hunden Strategic Partners (HSP), a well-known real estate development advisory practice specializing in destination assets, which showed a Pacers net contribution to the city of US$55 million in economic activity each year. If the Pacers were to leave Indianapolis, it is anticipated that Indianapolis’ governmental bodies would be directly impacted by roughly US$18 million.

NBA talks break down, preseason games wiped out

IBJ Staff and Associated Press October 4, 2011

NBA Commissioner David Stern floated it as an idea more than a firm proposal: a 50-50 revenue split. Even so, the union’s reply was unequivocal.

“They said, ‘We can’t do it.’” according to Stern.

And with that, the remainder of the preseason was lost and the first two weeks of the regular season moved to the brink of cancellation.

The National Basketball Association shelved the rest of its exhibition schedule Tuesday and will wipe out the first two weeks of the regular season if there is no labor agreement by Monday.

The Indiana Pacers will lose eight preseason games to the lockout, including at least three games at home.

Three preseason games already had been called off, including at least two home games.

“We were not able to make the progress that we hoped we could make and we were not able to continue the negotiations,” Stern said after nearly fours of talks between owners and players ended without gaining ground on a new deal.

No further meetings are scheduled, making it even more likely the league will lose games to a work stoppage for the first time since 1998-99, when the season was reduced to 50 games.

If the season is canceled, Indianapolis stands to lose about $55 million in economic activity, according to a 2010 study done by Chicago-based Hunden Strategic Partners for the city’s Capital Improvement Board, which owns Conseco Fieldhouse.

Stern and Deputy Commissioner Adam Silver said owners offered players a 50-50 split of basketballrelated income. That’s below the 57 percent that players were guaranteed under the previous collective bargaining agreement, but more than the 47 percent union officials said was formally proposed to them.

The only numbers that matter now, however, are the millions that stand to be lost when arenas go dark. “The damage will be enormous,” Silver said.

Players had offered to reduce their BRI guarantee to 53 percent, which they said would have given owners back more than $1 billion over six years. They say they won’t cut it further, at least for now.

And they insist the 50-50 concept wasn’t an even split, because it would have come after the league had already deducted $350 million off the top.

“Today was not the day for us to get this done,” players’ association president Derek Fisher said. “We were not able to get close enough to close the gap.”

With superstars like Kobe Bryant, Paul Pierce and Kevin Garnett standing behind him, union executive director Billy Hunter said the players’ proposal would have made up at least $200 million per season — a sizable chunk of the $300 million owners said they lost last season.

“Our guys have indicated a willingness to lose games,” Hunter said.

The sides are also still divided on the salary-cap structure.

Training camps were postponed and 43 preseason games scheduled for Oct. 9-15 were canceled on Sept. 24. Both sides said they felt pressure to work toward a deal with deadlines looming before more cancellations would be necessary.

Stern said the owners had removed their demand for a hard salary cap, were no longer insisting on salary rollbacks, and would have given players the right to opt out of a 10-year agreement after seven years. But the money split was always going to be the biggest hurdle in these negotiations, with owners insistent on
the ability to turn a profit after the league said 22 of its 30 teams lost money last season.

“We want to and have been willing to negotiate, but we find ourselves at a point today where we in some ways anticipated or expected to be, faced with a lockout that may jeopardize portions if not all of our season,” Fisher said.

After hardly budging off their original proposal for 18 months, owners finally increased their offer to players from 46 to 47 percent of BRI. It was then that the top negotiators discussed the 50-50 concept, and while Stern sounded disappointed that it didn’t work, Silver was more frustrated.

“I am not going to get a good night sleep,” he said. “After this afternoon’s session, I would say I’m personally very disappointed. I thought that we should have continued negotiating today and I thought that there was potentially common ground on a 50-50 deal. I think it makes sense, it sounds like a partnership. There still would have been a lot of negotiating to do on the system elements, but I’m personally very disappointed.”

On what both sides stressed was an important day, the owners’ entire 11-man labor relations committee came to New York to meet with 11 players. They could still work something out before Monday’s deadline, but neither side sounded optimistic.

“Right now, we had our committees, we gave it a really good run, and it didn’t work,” Stern said. Hunter said the union would hold regional meetings with its players, set up workout centers and help in other ways. And many players — including Bryant, who has been in talks with an Italian team — will
have to decide if they want to explore playing overseas.

And without a deal, the battle could go to the courts. Hunter said the union would have to consider decertification, and on Tuesday a federal court judge scheduled a hearing for Nov. 2 to hear arguments in the league’s lawsuit against the players seeking a declaration that the lockout doesn’t violate antitrust
laws.

All things both sides hoped to avoid Tuesday.

“It wasn’t to be, and we don’t have any plans right now,” Stern said.

Loss of Pacers season would deal blow to CIB, state revenue

Scott Olson , Anthony Schoetle October 11, 2011

Taxing bodies and downtown businesses are bracing for an economic body blow with the crushing impact of a Roy Hibbert pick now that cancellation of the Indiana Pacers’ entire 2011-2012 season is a real possibility.

NBA Commissioner David Stern canceled the first two weeks of the regular season on Monday—including the Pacers first seven games—after owners and players were unable to reach a new labor deal and end the lockout. Failure to reach a deal soon could emperil the entire season.

If that happens, the Capital Improvement Board might lose $1.5 million in food-and-beverage taxes, and the state could miss out on $3.5 million in Professional Sports Development Area funds, CIB Chief Financial Office Dan Huge said at Monday afternoon’s CIB meeting. The PSDA captures state sales tax
revenue generated by downtown venues, including Conseco Fieldhouse.

Huge did have some good news to report at Monday’s meeting. He said that through August, CIB is running $13 million over budget, largely because of improving tax revenue.

CIB’s proposed 2012 budget up for approval by the City-County Council on Oct. 17 is $77.5 million, up $4.4 million from this year.

Board member Michael McQuillen, who also is a City-County Councilor, doesn’t think the entire NBA season will be canceled. But if it is, he wants to ensure CIB is prepared to absorb the shortfall.

“I wouldn’t say the budget is rosy, but it’s solid,” he said. “I think [CIB is] doing a good enough job where the loss won’t be devastating, but $5 million [in CIB and state revenue] is $5 million.”

Life without a Pacers season has been on the minds of city leaders for several years, as team executives complained of multimillion-dollar losses and hinted that the franchise might need to move elsewhere.

In 2010, the CIB agreed to subsidize the Pacers’s operation of Conseco Fieldhouse to the tune of $33.5 million over three years. Some opponents of the funding argued that the team, founded here in 1967, should fold or move to another city if it couldn’t be financially viable on its own.

“I guess it’s a case of being careful what you wish for,” Mark Rosentraub, a former IUPUI dean who has written two books about professional sports operations, said in an August interview with IBJ. “If Indianapolis loses the Pacers even for a season, it won’t be at all good economically for the city.”

Losing the team for a year would wipe out about $55 million in economic activity, according to a 2010 study done by Chicago-based Hunden Strategic Partners for the CIB.

The impact would stem from less money being spent at restaurants, bars and hotels, as well as to decreases in the Pacers’ payroll and diminished tax revenue for units of government.

“There’s going to be a real economic hit, and we’re going to feel that pretty quickly once we start losing games,” CIB President Ann Lathrop said earlier this summer.

“This city is also going to lose out on some significant branding opportunities (through television broadcasts and media mentions) without the Pacers and I think a sense of community pride,” Lathrop added. “It’s a lot more than just money.”

Downtown businesses have been bracing for a financial hit for months, anticipating a shortened or eliminated 2011-2012 season.

“For us, it would be a huge loss,” said Troy Gregory, general manager of Mo’s, a steakhouse a block north of Conseco Fieldhouse, earlier this summer. “There are games, including those when the Pacers play teams like Miami, Chicago, Boston or Los Angeles, where we do at least as much business as we
would during a Colts home game.”

On big game nights, Gregory said revenue more than quadruples compared with a normal night.

“It would be a really big impact on us, and we’re far from alone,” Gregory said. “We’re hoping games don’t get canceled, but from what we hear, it doesn’t sound good.”

Downtown restaurant owners interviewed by IBJ estimated they each could lose as much as $500,000 without a Pacers season.

Parking lot operators also would take a big hit, with several around the arena saying they’d lose from $25,000 to $100,000 depending on the size of the lot and proximity to the arena, which dictates rates.

While hotels generally don’t see a lot of business from Pacers games, the Conrad does. The high-end hotel on Washington Street downtown has contracts with 23 of the NBA’s 29 teams that play here.

“It’s a good piece of business for us, and naturally, we’d hate to lose it,” said Greg Tinsley, the hotel’s general manager.

Tinsley said each team uses about 40 hotel rooms. The cancellation of an entire regular NBA season would cost the Conrad about 1,600 room nights. Though Tinsley wouldn’t say what the financial hit would be, it would likely be more than $500,000 after tallying room rates, meals and other charges.

The Pacers were scheduled to play 41 regular season home games and four pre-season games at Conseco Fieldhouse in the 2011-2012 season. So far, all preseason games have been canceled, as well as the Pacers’ first seven games.

Including its playoff games last year, the Pacers drew about 620,000 people through the turnstiles in the 2010-2011 season.

Regardless of how many games are canceled, the CIB in January will give the Pacers the second of three $10 million installments to offset Conseco Fieldhouse operating expenses. The payment is related to building expenses at Conseco Fieldhouse, not operating the team, Lathrop said.

[UPDATED] CIB to Vote on Pacers Deal

InsideINdianaBusiness.com Report

Indianapolis Mayor Greg Ballard says the agreement was
reached using no public tax funding and will ensure the downtown
area will retain its ability to attract the public, businesses and
conventions.

The deal to keep the Indiana Pacers in Indianapolis for at least
the next three years will go to a vote by members of the Capital
Improvement Board Friday. It calls for the CIB to provide $10
million in each of the next three seasons to the Pacers to
operate Conseco Fieldhouse.

Source: Inside INdiana Business

Press Release

INDIANAPOLIS – The Capital Improvement Board (CIB) of Managers of Marion County and Pacers Sports & Entertainment (PS&E) reached a 3-year agreement on Monday to keep the Pacers in Indianapolis for the near future.

The agreement will go before the CIB for a vote on July 16. If approved, the agreement will exist in conjunction with the current lease agreement, and the CIB will provide $10 million to PS&E for operating expenses for each of the next three seasons. PS&E will maintain operations of the Fieldhouse.

“After tough and deliberative negotiations, we have reached an agreement to preserve the viability of our downtown economic engine, keep the Pacers as the Conseco Fieldhouse prime tenant, preserve the thousands of jobs impacted by Fieldhouse activity, and maintain the millions of dollars in tax revenue generatedby this same activity,” said Indianapolis Mayor Gregory Ballard.

“Our charge was to preserve the city’s downtown economic vitality while protecting taxpayers across Indianapolis. The agreement we?ve reached achieves this and, very importantly, involves no additional tax increase.”

Complete terms of the agreement show a scaled repayment plan in which the obligation of PS&E to repay the $30 million will be reduced for each season the Pacers continue to play at Conseco Fieldhouse, concluding with a zero balance in 2019.

The funds will come from the CIB budget, which continues to improve in both holding the line on expenses and revenue growth -the additional 1 percent hotel tax was increased in 2009, the additional Professional Sports Development Authority (PSDA) tax passed by the General Assembly in 2009, and the availability of State Loans of $9 million per year in 2009, 2010 and 2011.

“We achieved our major goals in keeping the Pacers’ huge economic impact here in downtown Indianapolis, avoiding the entire expense of operating Conseco Fieldhouse without a marquee tenant, avoiding the devastating blow to the economic development and convention business that losing the team would have created, and crafting an agreement that is within the CIB’s budget,” said Ann Lathrop, president of the CIB.

The short-term agreement will allow time for the impacts of a planned new National Basketball Association collective bargaining agreement and expanded CIB financial picture, including an expanded Convention Center and other factors, to take shape in advance of a long-term agreement.

In May, the CIB released a report produced by Hunden Strategic Partners (HSP), a well-known real estate development advisory practice specializing in destination assets, which showed a Pacers net contribution to the city of $55 million in economic activity each year and 909 permanent, full-time equivalent jobs. If the Pacers were to leave Indianapolis, it is anticipated that Indianapolis?

governmental bodies would be directly impacted by roughly $18 million.

The CIB is the public agency that manages several downtown facilities including Lucas Oil Stadium, the Indiana Convention Center, Conseco Fieldhouse and Victory Field, among others. For more information on the CIB, please visit their website at www.capitalimprovementboard.org

Source: Capital Improvement Board