Early Discussions
If the Indiana Pacers wanted to break their contract with the Capital Improvement Board because of their failing financial health, they could do so.
That’s according to CIB officials. However the Pacers would have to pay a penalty which could be used to conceivably keep Conseco Fieldhouse open for years.
CIB Vice-President Pat Early has been heading up negotiations with the Pacers and saus while they aren’t engaging in negotiations, they are having “discussions.” Early says the Pacers have submitted financial reports which show them losing money and those reports allow the Pacers to exercise an early termination clause in their contract with the CIB. If the Pacers were to exercise that clause they would be on the hook for the millions of dollars.
Early cautions however that if the Pacers left, the city would still have to find a way to keep Conseco operating with no primary tenant.
The CIB approved a budget this year that did not include any money for operating Conseco.
Negotiations are expected to begin in earnest later this year.
You can hear all of Early’s comments below.
September 15th, 2009 at 6:05 am
Let's not whine and wring hands over 'if the Pacers left.' They use the facility only a few days a year. In fact, they block out days before and after game days which are needed for media setup/teardown, team practices, media days, and so on.
Without that restriction, you can be sure that many more alternative events that more efficiently operate the facility for 2, 3 or more days of shows in a row could be booked and we'd no longer have event revenue siphoned off to a private citizen.
September 15th, 2009 at 6:49 am
John howard, I don't know what world you're living in, but that facility is hard to book. Not many concerts want to go there, and not many other sporting events can afford the rent.
This whole discussion feels backwards. Although the Colts won a Super Bowl, if you ask the average Hoosier, they'd much sooner fork over some dough to keep the Pacers here.
I'm not sure this is going to end well, dammitall.
September 15th, 2009 at 7:01 am
When does the Tinsley $15,000,000.00 a year “error” go away? I can produce financial statements that pretty much say whatever I want them to say. Financial statements often do NOT reflect realities. It is probably too simplistic to ask taxpayers to pick up management errors even though the $15,000,000 a year obtains very little in the way of value for the Pacers…not much more value than relieving one's self down a drain. I'd at least ask what the statements would look like if the Tinsely matter did not exist.
September 15th, 2009 at 7:53 am
I'm guessing, pascal, that the statements would show what the standings show: in the current-day sports climate, small-market teams are barely making it.
The Colts got lucky and played very well down the stretch in their Super Bowl run. I hope it happens again, but it's not likely–in the NBA or NFL.
But the owners and fans want a competitive team which lightning might strike again. So, pro team managers search for the best combination of players. The Pacers struck out with Tinsley. I think they've hit a solid triple with Tyler Hansbrough, but it will take time. Here's tue rub: the minute a longshot does well, his stock rises, and he becomes more expensive.
The pro sport business has changed a lot in the last four years or so. League TV contracts are being re-opened, and unless the league has a revenue-sharing arrangement (I don't think the NBA does), small market teams are going to struggle to complete forever.
It's a vicious cycle, and in basketball-crazy Indiana, it's even worse: if the team is not competitive, the fans will stay home. To remain competitive, the owners have to shell out big bucks, which leads to higher ticket rpices because they don't revenue-share with the Lakers, et al.
The NBA ownership cartel ought to wise up and realize that tough economic times, spells big trouble for their league if the Pacers of the world cannot survive.
And it's a damned shame that it happens at this time, to one of pro sports' best owners–the Simons. They've put up money and stayed out of the frey until this year, when Herb decided to step in and be a bigger part of daily management.
Which he has to do, frankly, because Larry bird, beloved tho he is, isn't smart enough to keep up with the big money boys. Larry's been a terrible (translation: expensive) manager.
Odds the Pacers will be here in 2012: 4-3 against. Sadly. I hope I'm wrong. But there comes a point when a city cannot afford some things. We can't afford to cut the grass in our parks. I don't see any brains on the council or the 25th floor to change that picture.
September 15th, 2009 at 8:32 am
So let them leave. This city needs to get its priorities straight. I for one do not want to see another penny of my tax dollars go towards bailing out the rich “elite”. It's ridiculous to think, as TA said, we can't afford to mow the grass in our parks but some want to hand tens of millions of dollars over to a sports team. Disgusting. Seattle Pacers… has a nice ring to it doesn't it? :-p
September 15th, 2009 at 8:52 am
What? Conseco is not a world-class multi-purpose venue that has booking agents beating down the door to get in? I'm stunned.
Those other potential renters might find it more affordable if we didn't have to pay vig to Herb and Mel and thus had lower operating expense.
September 15th, 2009 at 8:54 am
I think it 'goes away' as soon as the CIB pays that curiously-similar 'bailout' to the Pacers.
September 15th, 2009 at 10:53 am
I read the contract and analyzed it on my blog. It is a very difficult thing to read and interpret. The one critical section dealing with the right to terminate early is one single spaced paragraph that runs across three pages. I can't emphasize enough how difficult it is to read and interpret.
I think it's pretty clear that in order to trigger the early termination right, the Pacers have to be selling the team and it relocating. The analysis of the penalty involved is much more difficult to decipher, but my calculations reveal the penalties for early termination would be in the hundreds of millions of dollars, declining each year of the contract. It is so substantial that the Simons would never do it.
September 15th, 2009 at 11:08 am
Nobody believes Pat Early has done ANY real due diligence on the merits of the Pacer's claim of poverty, triggering a key escape clause with the city.
The CIB needs to collect detailed legal affidavits from the team owners, their accountants, their independent auditors, and their bankers that supports the Pacers poverty claims that they lose money every year and are not “managing earnings” by shifting money around various companies they control to show loses to garner more public subsidies.
Oh yeah, have Pat sign a legal affidavit also, so he will be legally liable as a board member and an accountant for gross negligence and breach of fiduciary responsibility.
September 15th, 2009 at 11:09 am
Nobody believes Pat Early has done ANY real due diligence on the merits of the Pacer's claim of poverty, triggering a key escape clause with the city.
The CIB needs to collect detailed legal affidavits from the team owners, their accountants, their independent auditors, and their bankers that supports the Pacers poverty claims that they lose money every year and are not “managing earnings” by shifting money around various companies they control to show loses to garner more public subsidies.
Oh yeah, have Pat sign a legal affidavit also, so he will be legally liable as a board member and an accountant for gross negligence and breach of fiduciary responsibility.
September 15th, 2009 at 11:26 am
The Pacers financials that are submitted to the CIB should be public documents that can be reviewed by independent experts.
September 15th, 2009 at 12:30 pm
It is time for Indianapolis to face facts – we are not a big-market city. The reason that most mid-market cities do not have professional sports teams is that they cannot afford them. We cannot afford them. I love the Colts. I have to admit to not being a big Pacers fan – I prefer college basketball to pro, but I wish them well. But Indianapolis does not have the resources to spend millions of dollars on sports teams. We should never have spent millions of dollars on sports venues that we now cannot afford to maintain. We keep talking about needing to build our convention business, but we spend so much money on sports teams that we cannot afford to promote our new convention center.
There is nothing we are willing to do that will change our existing contracts with the Pacers or Colts. We will not let CIB go bankrupt. We will not use public pressure to try to strike a more fair deal with the Colts. But that doesn't mean we have to be even more stupid and give more money to another pro team – the Pacers.
Sorry guys, the Colts are cleaned us out.
September 15th, 2009 at 12:31 pm
Sorry – the last sentence should read:
“The Colts already cleaned us out.”.
That's what happens when I get stopped in mid-sentence.
September 15th, 2009 at 2:45 pm
Doesn't matter what the contract says, gullible CIB “volunteers” would believe anything shoveled their way. For the supposed “cream of the crop” of invested, citizen-appointees, we sure do get the oddest results from their “labors”.
September 15th, 2009 at 2:54 pm
Varan, you are exactly right. I don't think it matters what the contract actually says regarding termination or the penalty involved. They have their minds set on what they want to do.
September 15th, 2009 at 3:17 pm
There have to be smarter and more responsible citizens to serve on the CIB. Pat Early has been there so long it's frightening. He unfortunately did not inherit his dad's common sense.
I am very sympathetic to the long hours and hard work required for government board service. I've done it myself. But at some point, you've got to get new blood in the leadership ranks.
September 15th, 2009 at 3:41 pm
TA, A few weeks back Mayor Ballard was talking about how serving on the CIB was so thankless and nobody would want the job if he were to jetison some of the current members. Unbelievable.
September 15th, 2009 at 5:14 pm
hell with 'em. the Siomin's suck too.
September 15th, 2009 at 7:42 pm
TA, Indy is not that small of a market especially when it comes to the NBA. San Antonio and Sacremento, for example, don't even come close to the size of the Indy metro area, yet they've had some pretty good teams over the years. This is not all because of a small market.
September 16th, 2009 at 10:25 am
I just read on Advance Indiana, the blog that Gary Welsh writes, that Melvin Simon died today at age 82.
September 16th, 2009 at 11:26 am
Now you know the urgency that estate planning had on the CIB/Pacers talks.
September 16th, 2009 at 11:37 am
If “serving” on boards like the CIB are so God-awful thankless, why do so many (politically connected) people do it?
.
.
And don't say it's for the perks, like free tickets to pro sports, concerts, et al. Or for the personal benefits accrued, like giving oneself a fat contract for little or no work.
.
.
THAT, would make me extremely cynical about the whole process.
September 16th, 2009 at 3:25 pm
I just read on Advance Indiana, the blog that Gary Welsh writes, that Melvin Simon died today at age 82.
September 16th, 2009 at 4:26 pm
Now you know the urgency that estate planning had on the CIB/Pacers talks.
September 16th, 2009 at 4:37 pm
If “serving” on boards like the CIB are so God-awful thankless, why do so many (politically connected) people do it?
.
.
And don't say it's for the perks, like free tickets to pro sports, concerts, et al. Or for the personal benefits accrued, like giving oneself a fat contract for little or no work.
.
.
THAT, would make me extremely cynical about the whole process.