Indiana Gov. Eric Holcomb signed legislation on Monday approving a steady stream of checks for the Pacers and the Indy Eleven USL team, and here’s how the Associated Press reported it:
The dedication of nearly $400 million in public subsidies toward two Indianapolis sports stadium projects has been signed into law.
Close! As discussed here last week — citing coverage in the Indianapolis Star, so it’s not like it was exactly secret information — the total is actually $712 million: $600 million in arena renovation funds and operating subsidies for Pacers owner Herb Simon, and $112 million in stadium subsidies for Eleven owner Ersal Ozdemir. In fact, the Pacers piece is actually $777 million over 25 years, but it’s fairer to call it $600 million because that’s how much it’s worth in 2019 present value since some of the payments are way in the future.
The AP seems to have left out the $12.5 million in annual operating subsidies for the Pacers (rising to $16 million by the year 2031) and $10 million a year in “technology upgrades” for ten years on the grounds that that’s not technically part of the bill Holcomb signed, but rather the lease Simon agreed to on condition of Holcomb signing the bill. (Only in the sports world does one get to say, “Okay, I’ll let you pay me more than $20 million a year to play in the arena you built for me — but only if you first give me a check for $295 million.”) Which is misleading to readers, especially readers who are stuck relying on a brief AP report, because nobody in the rest of the Indiana and national media appears to have assigned anyone to write about the bill signing.
At least one national outlet did cover the Pacers situation in depth on Monday: Deadspin, which assigned me to write about the spread of pay-to-play deals in pro sports and how local elected officials set them up by giving team owners lease opt-outs that let them demand new subsidies every few years. You can read the whole thing here, but for now I’ll just share the thoughts of two people with inside knowledge of sports negotiations — longtime sports administrator Jim Nagourney and former Anaheim Mayor Tom Tait — on why mayors keep doing this to themselves:
After one meeting, [Nagourney] recalls, he spotted Steve Hill, the chair of the [Nevada] stadium authority, and “suddenly there’s a dozen reporters sticking microphones in his face, like he’s general manager of the team. It’s a very heady feeling, for someone who’s been in the concrete business. And the teams know it.”…
“Everyone’s at the party, and you don’t really want to be the guy not at the party,” says Tait. “It’s groupthink, and you gotta really be pretty comfortable with yourself to say ‘none of this makes sense.’”
It’s a sobering notion that the main reason mayors love sports stadiums has less to do with economic consulting reports or grubbing for campaign donations or what have you, and more to do with peer pressure, but that really does look to be how it works. The main value in being very rich is that you can hire people (okay, lobbyists, but they’re sort of like people) to hang out around City Hall and talk incessantly about how these subsidies have gotta happen, you’d be crazy not to do it, like used car dealers who somehow invited themselves over for dinner night after night until you forget that they’re not your friends. American democracy is truly a strange and broken thing.