I've written before on how my objection to the City bailing out the Indiana Pacers to the tune of eleven million per year for the next three years is informed by the fact the team's financial woes are caused by the NBA's terrible business model. I've also said NBA Commissioner David Stern is coming to the rescue.
Stern has said the NBA will pursue more aggressive revenue sharing to bring it in line with the NFL's extremely successful model. Any change to the existing revenue sharing model will put more money in the Pacers' hands as a "small market team."
But more importantly, Stern has consistently said the owners will try to lower the salary cap. He just hadn't floated a number until now.
According to Stern, the owners will ask for a thirty-three percent reduction in NBA players' salaries.
NBA owners pay their players roughly $2 billion, and the Pacers, with a payroll of $64,368,000 (19th highest of the 30 teams), account for 3.21 percent of that total.
So what would a thirty-three percent reduction ($800 million total) mean for the Pacers on a pro rata basis? An annual savings of $25,680,000 per year.
Many may rightfully contend that the players won't agree to a thirty-three percent reduction. Fair enough. But if the league gets only half of its requested savings ($400 million for a twenty-percent reduction), the Pacers still save $12,840,000 per year, or more than what the City is giving them.
Even if your goal was to keep the team at all costs, would you agree to give the Pacers taxpayer's money while knowing that a year from now they will be sitting on tens of millions more?
Here's your answer.
Not unless you were a mayor who (a) either has lousy business sense; or (b)made a pledge to GOP bigwig and Pacers CEO, Jim Morris, and/or to Bob Grand, a/k/a "the most influential man in the Ballard administration," a/k/a "the former President of the Capital Improvement Board, a/k/a "partner at Barnes and Thornburg, the Pacers' law firm."
One wonders exactly how many more times the Mayor can take an idea that is not bad in principle (see Citizens Gas sale, parking renovation) and craft lousy deals that benefit the politically influential to the detriment of average taxpayers.
4 comments:
Great. So we're going to get our $10 million back when the Pacers get a lower salary cap?
The ACS contract will expire before that happens.
Paul: Of course not. Don't be silly! This wasn't a loan. This was just us picking up the check for the Pacers at a VERY expensive dinner.
I love how some people claim we are obligated under the 1999 contract to make this payment because the Pacers - as they tell us but won't show us - are losing money. That is absolutely false.
Hey Herb needed to get the money back when he needed the loan to buy out Mel's share of the Pacers. You didn't think he was going to use his money did ya? ;) :) :)
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