Speaking of outrageous demands, expansion minor-league soccer team owner Ersal Ozdemir went before an Indiana state house committee on Thursday to ask for $87 million to build a major-league-ready stadium for his Indy Eleven, and this happened:
Several members of the House Ways and Means Committee thanked Ozdemir for investing in the North American Soccer League franchise Indy Eleven, which begins its inaugural season in April. While members had questions about the proposed financing of the 18,500-seat venue, they did not question its impact on other taxpayer-supported venues downtown.
(That reference to “impact on other taxpayer-supported venues” is a reference to the fact that the stadium is proposed to be a concert venue, which could end up drawing acts away from the Pacers‘ Bankers Life Fieldhouse.)
The funding plan for the proposed stadium would require the state to provide $5 million a year to pay off the stadium bonds, drawn from ticket taxes (estimated at $5.1 million a year) plus sales and income taxes paid by the team (estimated at $4.1 million a year). The latter would largely be a taxpayer subsidy, thanks to the substitution effect, but if the entire nut can really be provided by ticket tax money, that wouldn’t be so bad, since ticket taxes largely come from team owners’ pockets (by lowering the face value that teams can get away with charging).
That’s assuming that the $5.1 million a year projection for ticket taxes is legit, of course. If Indy Eleven tickets are taxed at the current 10% rate that other teams are charged, that would require $51 million a year in ticket sales. The average MLS team sells about 300,000 tickets a year, at an average of $26 a ticket, which comes to … just shy of $8 million. That would generate just $800,000 in ticket taxes, leaving $4.2 million a year to be paid off by sales- and income-tax kickbacks.
It’s possible that Ozdemir intends on holding tons of concerts and other events at the stadium as well, though that isn’t really the case for any other MLS stadiums. Hopefully this was one of the financial questions that state legislators had for Ozdemir — though if it was, the Indianapolis Business Journal didn’t bother to report on it.