Monday, March 30, 2009

Hey, Indianapolis Star! Ya Talkin' to Me?!?!?

There was an interesting tidbit in the Indianapolis Star's "Behind Closed Doors" this weekend, and since Ipopa (eye-pop-uh) was "agog" about this trip last week, I'm thinking the Star is calling me out along with Advance Indiana. Here's their missive:

Blogs don't get bogged down in facts

Local blogs were agog last week about a trip the financially strapped Indiana Pacers hosted for sponsors to Cancun, Mexico, recently.

The blogs reported the Pacers took 60 people on a five-day trip to an exclusive oceanside resort.

These bloggers, however, had it only half right.

They were outraged that the Pacers would pay for such largess while the team is asking the CIB to take over the $15 million cost of running Conseco Fieldhouse each year.

But as Greg Schenkel, vice president of corporate and public relations for the Pacers, pointed out, the annual trip is a part of the sponsorship contracts the team has with numerous companies, including The Indianapolis Star.

So the trip's costs are covered by the sponsorship dollars, he said.

Schenkel would not release a list of who went on the trip, but he did say no one from the CIB or the city or state government went.

Putting aside why Schenkel or the Star wouldn't list who attended the trip, can somebody make sense of this from a business perspective? Am I to understand that the Star actually PAID MORE on a contract so certain undisclosed individuals (management?!?) would get an all-expenses paid trip to Cancun (plus jewelry?) Since I'm assuming certain members of the Pacers organization attended, was THEIR attendance paid for by the sponsors, too? If so, I fear for the Star's management, which might be why they're mum on who went.

I'm sure there are many people reading this who work in corporate sponsorship/entertainment world. If this is done all the time, and I'm unfairly hitting these folks, let me know. Otherwise, I don't understand why a company would pay a premium on a promotional deal to have an organization whose product is professional sports play travel agent for them? (I have GOT to see one of these contracts).

But even if this happens all the time, isn't anybody worried about the potential effect on coverage? I've always wondered how an industry maintains journalistic objectivity when it has a business relationship with those whom it covers. At a minimum, shouldn't the Star disclose the nature of its business relationship and the amounts in play?

I ask because the Star editorial staff is calling for a CIB bailout (more on that in a second), and while Matt Tully wrote a strong column a few weeks ago telling the Pacers to put up (their financial spreadsheets) or shut up, his story today is an arguable softening of position.

You say, "WAIT! Tully said that if the Pacers left, it wouldn't destroy the city!" Yes, and he also said that the Pacers should stay, just "not at the cost of another sweetheart deal the city cannot afford."

Sometimes it pays to parse columnists' words like they're diplomats. You can then understand what they are REALLY signaling. Ask yourself these questions, "In Tully's mind, what makes the deal a "sweetheart" deal?" How does he define "the city," and how does "the city" decide what it "cannot afford?"

Later in the column, Tully basically tells you:

"If lawmakers decide a bailout is good public policy, the pain should be spread at least throughout Central Indiana. Remember: Carmel, Greenwood and the other suburbs benefit from a thriving Downtown Indy just as much as a homeowner living on the Far Westside."

See how subtle Tully and the Star are being? Next time you see Matt, call him "Smooth Operator" Tully. He takes the principal question - should we bail out the Pacers from their contract obligations - and fuses it into a completely separate (though clearly related) one -should we bail out the CIB for operating at a loss on everything else?

This subtle switch matters because the Star's editorial talks about the Superbowl and the Final Four and how those events help promote Indianapolis AND surrounding communities to other businesses that might seek to relocate here. Maybe so for national events that draw people from out of state who stay long enough to SEE the city. How often does that happen for a Pacer game? (Maybe a handful of people come from Columbus to see LeBron where there are seats still available).

And yet, here the Star (and Tully implicitly) stand, seemingly asking ten counties to accept regressive hotel and food and beverage tax increases so that corporations won't have to pay more for Conseco suites and Pacer fans, concert fans, and tractor pull fans won't have to pay more for their admissions. (I suppose in the interest of full disclosure, I'd be delighted to have Carmel, or even the rest of the state, pay something so I can still go out downtown without choking when I see my bill. Also, does anybody know if the CIB still has a suite at Conseco? If so, auctioning off that prime real estate could save the Pacers some money).

I admit that the Pacers haven't been the same in my eyes since the departure of Reggie Miller, but even in their glory days, I couldn't have seen giving more money to the Pacers in this type of economy. Let me say this as politely as possible. THEY PLAY A GAME!

Of course, will any of us be surprised when taxpayers take a hit when a deal gets done? This is capitalism, after all. While superior to any other system for generating prosperity, capitalism makes us cater to the financial elite by subsidizing their hobbies as the price for all the "trickle down" benefits the rest of us allegedly receive.

It's just funny how whatever "trickles down" onto average people always tends to smell funny.



Dave Stone said...

I think you could take the argument further. Let's say that sponsors are paying extra to the Pacers so executives get a nice trip out of the deal. Odds are a number of those sponsors are publicly-held companies. My guess is that the shareholders would not be thrilled to know that a chunk of their marketing budget is going for nice trips for the execs, who presumably can afford to pay for their nice trips out of the salaries that they're paid.

You'd think some crusading journalist at the Indianapolis Star would be eager to track down that sort of thing.

Anonymous said...

Ad or sponsorship contracts involving junkets for sponsors has been going on for decades. I've been in the marketing business nearly 40 years. They were going on then. And they continue to this day. They are legal. And for public companies they meet Sarbanes/Oxley scrutinty. The cost of the trip/junket/cruise is built into the cost of the ad package or sponsorship. For media companies that take advantage of another company's trip sponsorship, working journalists don't go. Instead, execs in marketing or advertising do. In some cases advertisers choose making media buiys based upon will they (their client) get a trip or junket.
Now, some public companies prohibit their employees from doing those kind of deals. Wal-Mart is the best example. If you remember a few years ago, some state employees with the Indiana Criminal Justice Institute got in hot water for accepting a junket from a local radio station as part of buying a sponsorship from that station.
The fact that these junkets are a normal business practice has been lost in the larger debate of the proper role of public money to solve the CIB mess.