Pacers to get $59m a year extra from TV deal, will still keep $16m a year in city subsidies, thanks much

So now that every team in the NBA is set to get a $58 million a year windfall from the league’s new TV contract, does that mean that teams will stop complaining that they’re losing money and need operating subsidies from their home cities? Yeah, right:

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 city agreed to pay the Pacers $16 million a year to play in their rent-free arena in order to keep the team from threatening to leave, so I guess it’s true that the TV deal doesn’t make that logic any dumber: The Pacers would still get their cut of the TV boodle in another city, so the move threat is just as viable (or nonviable) now as it was when the new lease was agreed to.

Still, given that the Pacers management insisted that the subsidies were needed because the team was losing money, and that even after kicking in for heftier player salaries that will result from the TV windfall and the money that the Pacers and other former ABA teams have to tithe to the old Spirits of St. Louis owners, the Pacers should clear about $25 million a year in added revenues, this does make Indianapolis’s subsidy agreement look even worse. Which is pretty bad, given that it already looked like the worst deal ever.

9 comments on “Pacers to get $59m a year extra from TV deal, will still keep $16m a year in city subsidies, thanks much

  1. That St. Louis thing is done I think. The NBA bought it out when they lost a bunch of money.

  2. There were reports that the NBA was going to buy them out, but I don’t think it was ever consummated. Let me check with the Indy Star reporter who noted this today, and see if he knows the status.

  3. The Indy Star’s Mark Alesia points me to this paragraph that he added to his story later this morning:

    “Fuson said a deal negotiated earlier this year continues the payments ‘for a long time,’ but the Pacers no longer have to pay in perpetuity.”

    So the deal was consummated, but the NBA only bought out the Spirits’ way-future TV revenues, not the ones coming from this TV contract.

  4. Hi, are you a councilmember in a city with an NBA team? Here’s a sentence (okay, sentences) that you might find useful:

    “Hello, I see that you’re claiming you can’t operate your basketball team profitably. That’s unfortunate. However, the last one just sold for $2 BILLION. Perhaps it’s time you cash out and look for another line of business to get involved with. Have a nice day.”

  5. They still get a cut of the TV revenue, it’s just smaller now then it was before and there is an option to buy them out completely at some point. It cost the 4 teams in question $500 million to even get the smaller amount and the option, but it settled a bunch of disputes about new TV revenues that didn’t exist in the 1970s like Internet and International broadcasts.

  6. And to think, the NBA (or the 4 teams) could have bought the Silnas out for $8 million back in ’82, but would only pay $5 mil. Oops.

  7. Brian: Just think of the millions the NBA has spent on lawyers trying to find ways to break the contract the NBA/ABA signed with the Silnas…

    Is this the best contract in the history of sports (for the beneficiary?) I’d argue it is…

    Not sure the other owners “could have” bought them out for $8m in ’82. Do you have a source for that? I’ve always been told that the Silnas had consistently refused all offers to buy out their deal.

  8. ( last paragraph)

    Unfortunately for them, they lost the majority of their earnings by investing with Bernie Madoff.

  9. The Pacers deal is by far the most egregious contract I’ve ever seen. The taxpayers built Conseco for about 183 million and the Pacers get everthing that comes through the door; all events, all concessions, all signage, all tv, all suites, all ticket revenue and they pay zip. In the last few years the city has paid about 33.5 million for maintenance and that still wasn’t enough, their new agreement is 16 miilion per year for the next 10 years. Their owners claim the team lost money 9 our of the last 10 years, by the way they won’t let us see the books of course. If a biilionaire team owner is still losing money with all of the perks the Pacers receive then that owner needs to take Micheals advice, cash out and find another line of business. As this deal stands the only thing the taxpayers of Indianapolis get is the bills