Just like after last season when the Seattle SuperSonics relocated and were renamed the Oklahoma City Thunder, another NBA team is in trouble, and it could force it to relocate.I find the writer's suggestion that the owners should "stop signing bad lease agreements" a bit silly. Herb and Mel Simon signed a 40-year lease agreement in 1986 with the Capital Improvement Board to allow the team to play in Market Square Arena. A little more than a decade later, the Simons got exactly what they wanted: a full release on their 40-year lease on MSA and a new lease for a newly-constructed Conseco Fieldhouse, which cost nearly $200 million to build. The 25-year-old MSA was imploded as demanded by the Simons to prevent any competition with events at Conseco Fieldhouse. The current lease allows them to renegotiate the terms of the lease on Conseco Fieldhouse after only ten years. I think the writer has it backwards. It's the public that needs to stop signing bad lease agreements. The owners seem to be doing just fine with their lease agreements.
The Indiana Pacers are struggling on the court and off it. Specifically, co-owner Herb Simon is having difficulty paying $15 million a year in the operating costs of Conseco Fieldhouse, the Pacers' downtown-based home arena.
Simon has not given an ultimatum, but he cannot continue losing money. He said his franchise has not made a profit in nine of the past 10 years.
The Pacers' problem appears to be their lease agreement, which was the same for the SuperSonics.
In Seattle, the owners had to turn over a portion of their revenue to the city to pay for the renovation costs that went into KeyArena.
In Indianapolis, before the Pacers agreed to play at Conseco Fieldhouse in 1999, Herb and his brother, Mel, agreed to pay yearly facility operating costs of the building so they would receive profits generated from various events such as the circus, concerts and other entertainment. As it was then like now, Conseco Fieldhouse is owned by the Indiana Capital Improvement Board. Pat Early, the board's vice president, told The Associated Press it could not take over operating costs because it faces a $3 million shortfall in revenue this year.
"It's possible they could move the team," Early said. "It's possible they could sell the team. It is also possible they could shut the team down. What's not possible is the Pacers losing the kind of money they're losing this year indefinitely."
The Pacers are among struggling franchises that includes the Memphis Grizzlies, Sacramento Kings and Charlotte Bobcats. Since the Pacers-Pistons brawl in 2004 at the Palace of Auburn Hills in which former Pacers forward Ron Artest went into the stands and fought after a fan poured beer on him, the Pacers have struggled to regain their fan base.
Last season, they were last in the 30-team league with an attendance average of 12,221 per game. This season, after 31 home dates, the Pacers rank 28th with a 13,712 average. To fix the situation, the Pacers likely will need state funding help and the league should step up and offer assistance. The Indiana Pacers are a storied franchise that goes back to the American Basketball Association.
Whenever a franchise is struggling like the Pacers, it only hurts the league overall. These are difficult times with the recession, but the NBA cannot keep relocating franchises. The owners also must stop signing bad lease agreements if they cannot take the hit when things get tough.
Sunday, March 15, 2009
NOLA Perspective On The Pacers
The Times-Picayune's John Reid brings a New Orleans' perspective on the Indiana Pacers latest claims that their NBA franchise is bleeding $30 million a year: