The Indiana Pacers and Indiana Fever contribute an estimated $55 million a year to the Indianapolis economy, according to a study conducted by Chicago-based hospitality consulting firm Hunden Strategic Partners.
Together, the professional basketball teams—which host a combined 77 games annually at Conseco Fieldhouse—support 900 jobs and draw about 700,000 fans to the downtown venue, the study found.
Hunden Strategic Partners released the results at a Monday meeting of the Capital Improvement Board, which commissioned the study as it weighs whether to take over $15 million in annual Conseco Fieldhouse operating expenses.
The board has been negotiating for months with executives of the basketball team over who will pay the operating expenses. Now, Pacers Sports and Entertainment shoulders all costs and manages the arena without any contribution from the CIB, which owns the venue.
The Pacers, however, contend annual operating expenses are higher and peg the figure at $18 million.
A provision in the Pacers’ lease allows the team to break the lease after 10 years if the NBA franchise is losing money, and officials say the team lost $30 million in the 2008-09 season and sustained “heavy losses” last season, too.
The Pacers have said they will begin seeking other alternatives if a deal is not inked by June 30. CIB President Ann Lathrop said her interest is in making sure the deal is done "right" regardless of the deadline.
Lathrop declined to divulge how contract negotiations are proceeding, but she expects Hunden’s findings could help justify keeping the team in the city.
“I feel like the study is very important,” she said. “This allows us to have a benchmark relating to the true economic impact" of the Pacers.
The cash-strapped CIB didn't pay for the $30,000 study, she said. Instead, she said the Indianapolis Bond Bank picked up the tab because “the health of downtown is critical to the overall debt” of the city.
The study concluded that without the teams, Conseco Fieldhouse would have a $17.7 million annual operating deficit, including $5.5 million in lost admissions, food and beverage and income taxes.
The Fieldhouse hosts an average of 483 events a year, including the 77 basketball games, drawing 1.5 million attendees. If the Pacers and Fever left, total attendance would drop to about 800,000.
Indianapolis also would take a hit in terms of overall downtown activity and community pride, said lead consultant Rob Hunden, a former economic development official for the Indianapolis Bond Bank under then-mayor Stephen Goldsmith.
“To lose one of its anchor sports tenants, it’s emotional, if not financial,” Hunden said.
If the CIB picks up the $15 million annual tab, the additional expense will add to the board’s already fragile financial condition.
CIB members spent much of 2009 grappling to overcome a projected $47 million deficit this year. The board has improved its financial health by making $26 million in cuts and by avoiding $25.5 million in debt-service reserve payments.
Lathrop said the CIB will continue to look for potential cuts and will continue to keep costs down.
The not-for-profit now is on target to turn the budget deficit into a surplus—additional money that could be used in negotiations with the Pacers.