Monday, July 19, 2010

Golden State Warriors NBA Franchise Sells For $450 Million

Times are really tough for those NBA teams today according to Pacers' CEO Jim Morris. The Golden State Warriors NBA franchise has been sold for $450 million, the highest amount ever paid for an NBA team. Forbes had estimated the value of the team at $315 million just last year. The team has been purchased by the owners of Las Vegas' Mandalay Entertainment Group. Christopher Cohan bought the team in 1995 for $119 million.

It's worth observing that Forbes' most recent estimate of the value of the Pacers is $281 million, down from the little more than $300 million the business magazine pegged the team's value the previous year. Herb and Mel Simon paid only $11 million to purchase the team in 1983. The Pacers' player payroll is actually higher than the Warriors, $74 million compared to the Warriors' $70 million. The Warriors' annual revenues are $113 million compared to the Pacers' $97 million. The Warriors revenues are higher because they have more than double the gate receipts as the Pacers, $45 million to $21 million even though the team had a worse win-loss record than the Pacers during the most recent seaason, winning only 31% of their games compared to the Pacers' 39%.

Field of Schemes notes recent rumors circulated by a development group of an NBA team agreeing to move their team to Las Vegas if the city builds a new basketball arena. Speculation focused on the Detroit Pistons and the Sacramento Kings, but both teams' owners denied the rumor. There have also been rumors that the Pacers might be interested in selling to a new team owner in Las Vegas. That city's controller, however, gave a big thumbs down to any publicly-built arena recently in a study he conducted showing little, if any, economic benefit in spending that much public money on a new basketball arena. The City of Indianapolis foolishly agreed to give the Pacers $33.5 million in additional public subsidies over the next three years--money the city cannot afford to spare in these tough economic times--in order to placate billionaire Pacers' owner Herb Simon, who recently bought out his late brother's interest in the team for an undisclosed amount.

On that issue of attendance, I think the case can be made that the Indianapolis Indians actually have as big of an economic impact on downtown as the Pacers. The Pacers reported attendance of just over 582,000 during the 2009-10 season, or the fourth worst attendance record in the NBA. By comparison, the Indians reported attendance of 549,552 last year, which was hurt by five games that were rained out, including the 4th of July weekend. The attendance for the Indians could top total Pacer attendance this year if relatively good weather holds out for the remainder of the season. Only one game has been cancelled due to rain so far this season. The Indians have 72 home games scheduled. I caught a story on one of the national news broadcasts last night that discussed how many families were choosing minor league baseball for outings over major league baseball because the games were equally as enjoyable and much easier on the family budget with cheaper ticket prices. The Pacers claim their average game attendance is just over 14,000, although that's hard to believe given how empty Conseco Fieldhouse appears for most of their games. The Indians are averaging well over 8,000 per game this season.


Downtown Indy said...

Maybe Ann Lathrop could bring some cash into the CIB by selling its proficient analysis skills to Las Vegas. Clearly, their Controller needs help to reveal the vast fiscal advantage of having a pro team in town.

Jon E. Easter said...

The Pacers only have 41 home games to the Indians' 72.

Gary R. Welsh said...

And your point is, Jon? I'm talking about the economic impact over their respective seasons. If you study the numbers, you'll find the Indians have as much of an impact on downtown businesses as the Pacers. I would also note the Pacers numbers are inflated. Many season tickets to Pacers games go unusued. Go to one of their games and look at all the empty seats in the area where the season ticket holders are primarily located. The Pacers can't them attending if the tickets are sold whether they show for the game or not.

Downtown Indy said...

I think Jon's point must be that the Indians are 70% more responsible for employing '66,000 people in the Indianapolis metro area' that are the Pacers.