Thursday, October 09, 2014

Billionaire Herb Simon Won't Give Up Subsidies For Pacers Despite $55 Million A Year Windfall From NBA's New TV Deal

Billionaire Herb Simon believes Indianapolis taxpayers are nothing more than his workhorse slaves when it comes to funding his vast empire. Many taxpayers are still fuming over a 10-year, $160 million deal the Capital Improvement Board entered into with Simon's Indiana Pacers earlier this year in exchange for his agreement to drop his extortionist demands to either pay up or he would move his NBA team elsewhere. What Simon and the CIB didn't tell the public about at the time that announcement was made was that negotiations were underway on a new TV deal by the NBA that promised a huge windfall to Simon's Pacers. Now that the New York Times has reported on the deal, it appears that the Pacers are poised to pocket as much as $55 million a year in additional revenues under the new deal. That's in addition to the more than $120 million in revenues the team is estimated to generate annually. The corrupt city officials who inked the one-sided agreement say the TV deal changes nothing:
City officials said the TV contract doesn't change their view of a deal made six months ago to lock the team into Indy for 10 years. The Capital Improvement Board agreed to use $160 million in tax money to cover operating costs and upgrades at Bankers Life Fieldhouse. The team keeps revenue from all fieldhouse events — basketball and non-basketball alike.
"We still believe that our current agreement ... is in the best interest of the city and CIB," Ann Lathrop, president of the CIB, wrote in an email response to questions.
"The agreement ensures that hundreds of thousands of people will continue to come downtown for events at Bankers Life Fieldhouse, adding to the vibrancy and economic success of downtown businesses," she said. "It also includes $26.5 million in capital improvements to be made to the building, which also will drive significant additional employment."
The CIB gets most of its money from taxes, including those on food, beverages and hotels. Marc Lotter, spokesman for Republican Mayor Greg Ballard, said that money must be used for downtown development.
"It cannot, by law, be used for police, potholes or other general city functions," Lotter said.
Indianapolis taxpayers, who on average have seen their real income drop significantly since the onset of the Great Recession of 2008, have been slapped with another 10% increase in their local income tax this year on top of the 65% increase enacted in 2007 to shore up funding for public safety. The previous tax increase was supposed to be used, in part, to hire additional police officers. Instead, the Ballard administration diverted up to $120 million in revenues into TIF slush funds used to make pay offs to the politicians' campaign contributors for their private real estate developments. A series of tax increases supposedly to bail out the CIB, including hotel, car rentals and admissions, was instead used to provide nearly $50 million in subsidies for the Pacers before this year's 10-year, $160 million subsidy plan was announced.

Pacers Sports & Entrainment COO Rick Fuson, who recently replaced Jim "Rent-A-Civic Leader" Morris, refused to comment on the new TV deal. "We don't go into a lot of detail, especially with the media, in terms of what the financials are," Fuson told the Indianapolis Star. "I think we've been very open with the Capital Improvement Board. ... I think we are doing better, but it's still a very small market." "Fuson said the television revenue won't all go to the Pacers' bottom line." Fuson, by the way, is dating the Star's President, Karen Ferguson.

Herb and his late brother, Melvin, bought the Pacers in 1983 for only $11 million. The team could be worth as much as $750 million based on the recent blockbuster sales for the Milwaukee Bucks and Los Angeles Clippers. The Bucks, which has traditionally been valued less than the Pacers, was sold by billionaire Herb Kohl to a couple of billionaire hedge fund owners from New York for $550 million this year. Steve Ballmer purchased the L.A. Clippers from billionaire Donald Sterling after the NBA forced the sale of the team by the Silver family trust due to racists comments made by Sterling. Simon family members have pocketed more than a half billion dollars in various public subsidies courtesy of Indianapolis taxpayers for their private business concerns over the past several decades. I don't know how much more of this crony capitalism has to go on before taxpayers finally rise up in and revolt in this country to bring it all to an end. The idea that all people are treated equally under the laws of this country is nothing more than a figment of our imaginations.

UPDATE: In case you were wondering just how much Indianapolis would suffer if Simon packed up and took his Pacers somewhere else, you might want to take a gander at what happened in Seattle after the Sonics left. Despite cries of the sky falling at the time, it turns out that Key Arena is turning a bigger profit now than it ever did when the Sonics occupied the arena.
Old age is an awkward subject. But if we’re talking about responding well to old age, then Seattle’s KeyArena is the great-grandma who’s still taking salsa lessons and mowing her own lawn.
And the facility’s supposed death after the NBA’s Sonics left town? It’s overstated, at least for now.
The arena is now quite profitable, thank you — much more so than in the days of the Sonics, to the surprise of many who saw an uncertain future for the sports venue after the team’s departure in 2009.
The Lower Queen Anne facility has gone from losing money in the Sonics’ final years to turning more than $1.2 million in profit for Seattle last year.
The arena has been transformed into an “economic engine” for the city, says Robert Nellams, director of Seattle Center, the city department overseeing Key­Arena.
The facility’s economic buoyancy results largely from booking more musical performers. It also means that, despite the heartbreak of Sonics fans, the team’s departure wasn’t a disaster for the city’s pocketbook.
Take that, members of the Capital Improvement Board and the overpaid staff of Visit Indy for feeding us your incessant lies about how damaging the loss of the Pacers would be to Indianapolis' economy.


Anonymous said...

Typical billionaire, I've got mine who cares about you. Thanks Herb, why don't you and the Pacers got the flock out of Dodge.

Anonymous said...

Dr. Evil called. He wants his Nehru jacket back. His ransom demand?..."One hundred sixty millllion dollars"

Anonymous said...

So when will the mayor and the members of the city council disclose just how many tickets they get on our dime?

Anonymous said...

Mr. Simon: This lowly taxpayer in Indianapolis is asking that you give back your share of OUR tax money.

Click here to see: What you call a "team" appears to be what we call "thugs."

What was "Malice at The Palace?"

The owners of the Fieldhouse your team plays in deserve all parking revenue, venue revenue, concession revenue. We OWN it! -You don't!

Why can't a typical taxpaying family in Indianapolis afford season tickets for the family? Why is your team for the rich only? Why do you think you can extort our TAX money?

Mr. Simon, have you any scruples?

local landlord said...

Couldn't care less about the Pacers. Couldn't care less about the Simons. They can all pack up and leave town. My tax dollars are for potholes and schools, not billionaires and the politicians who service them. How about a referendum on whether to dissolve the CIB and evict the Pacers.