13 WTHR - Indianapolis News |CIB looking at ways to reduce deficit

CIB looking at ways to reduce deficit

Mary Milz/Eyewitness News

Indianapolis - The Indianapolis Capital Improvement Board is still looking for ways to plug a big deficit. 

The board, which runs the city's sports venues and convention center, needs $37 million for two one-time payments due this year. Plus, it needs up to an extra $40 million a year to pay for the operating costs at Lucas Oil Stadium and possibly Conseco Fieldhouse, among other things.

The mayor and others are pitching an increase in the admissions tax, which is currently six percent. For every one percent it's raised, the city would pull in an extra $1.5 million annually.

The teams aren't saying much about it, but a leading sports economics and management expert predicts raising the tax will be a hard sell.

"A ticket tax reduces the revenue the team gets. People sometimes think you add a ticket tax and prices go up, but that's not true. The tickets are set now at what the market will bear," said Mark Rosentraub, a professor at Cleveland State University.

Jim Morris, President of Pacers Sports and Entertainment recently told Eyewitness News, when the six percent admissions tax was imposed, the team absorbed it.

"So if it was a $30 ticket and the tax was six percent, we did not raise the price of a ticket to $31.80," Morris said. "We essentially paid the tax out of our revenues and had $28.20 in value out of the admission price."

But now the Pacers are cutting ticket prices, losing money and asking for relief.

The Colts, on the other hand, just increased some season tickets by $10 a game, one of just four NFL teams to increase prices this year.

"The Colts, with a waiting list of around 22,000, believe they can get what essentially amounts to $100 a ticket more, we'll see if they're right," Rosentraub said.

He said adding a tax to the mix would change the revenue model and wasn't part of the original deal.

"It reduces the revenues the Colts anticipated when they agreed on what they were going to do to participate in the building of the new stadium," he said.

Still, Rosentraub said there is a way around that.

"What does the CIB have as elements of value it could give or lease to the teams in response to the extra cost they're going to pass on?" he asked.

Rosentraub used Cleveland as an example. He said in turn for picking up more of the operating costs of their venues, the Cleveland Indians and the Cavaliers got more advertising rights.

"Redoing leases and arrangements is never pleasant," he said. "But these aren't pleasant times. That's why both sides need to be flexible and look at the options available."