Writes Harrison Ullman in the July 15, 1999 issue of NUVO, "You won't find this item on your itemized cable bills from Time Warner or Comcast, but every time you pay the cable companies, you also pay 50 cents to the Indiana Pacers.

The two cable companies take from their customers and give to the Pacers under a remarkable franchise agreement between the companies and the City of Indianapolis." 

Paying for Cable, Getting the Pacers

By Harrison J. Ullmann

You won't find this item on your itemized cable bills from Time Warner or Comcast, but every time you pay the cable companies, you also pay 50 cents to the Indiana Pacers.

The two cable companies take from their customers and give to the Pacers under a remarkable franchise agreement between the companies and the City of Indianapolis. The city awards the companies their franchises and, in return for protecting the Time Warner and Comcast cable monopolies in our city, the companies pay the city a franchise fee that now includes the subsidy for the Pacers. Most of the rest of the franchise fee goes into the city's general fund.

The cable companies are now collecting the Pacers subsidy from their subscribers and sending the money to the city's Capital Improvement Board, a peculiar piece of Unigov that collects taxes and spends public money without any review from any elected official. At the moment, the Capital Improvement Board has an unlisted telephone number, which tells you all you need to know about the CIB's public accountability.

After the Capital Improvement Board gets your money, it gives most of it to the Indiana Pacers. According to the limited public records that the CIB releases, the 50 cent charges on our cable bills were worth $1.1 million to the CIB and $800,000 to the Indiana Pacers during 1998.

The cable subscribers get nothing for the payments they are forced to make to the Pacers. The City of Indianapolis and the Capital Improvement Board have agreed with the Pacers that all revenues from the sale of broadcast rights will be kept by the Pacers.

Sources interviewed by NUVO for these stories on the city's cable franchises (see Cover story) say they don't know of another city where public revenues from cable franchises are used to subsidize privately owned sports franchises.

Of course, other cities don't have a Capital Improvement Board that operates independently from any direct control by mayors and governors, city councils and state legislatures.

The unelected members of the Capital Improvement Board (they are appointed by the mayor, but do not answer to the mayor) currently control public assets worth $567 million, according to the CIB's most recent financial statement. These assets include Market Square Arena and its parking garages, which the Simons and the Pacers will abandon next year when the publicly-financed Conseco Fieldhouse is opened and given to the Pacers Basketball Corporation.

In addition to the subsidy the Capital Improvement Board collects from the city's cable subscribers, the CIB's financial statement says it also collected $36.1 million in state and local tax "assistance" in 1998. The "assistance" includes the city's taxes on auto rentals, hotel and motel rooms, restaurant and bar tabs, and admissions to the former Hoosier Dome, all of them payable to the CIB. The CIB also gets a cut of the tobacco tax revenues that state government distributes to local governments.

The CIB gives the Pacers a lot more than the money it takes from your cable bills.

In 1998, the CIB paid $3 million to Arena Management Inc., the Simon subsidiary that operates Market Square Arena for the Pacers, and wrote off nearly $1.6 million it had previously "advanced" to Arena Management. In all, the CIB has "advanced" $25.6 million to the Pacers and seems to expect to get little of it back. The CIB financial statement says it now considers its "advances" to be "operating subsidies" for the Pacers.

The CIB is also spending a lot of public money for the Pacers' new home at the Conseco Fieldhouse. The CIB's balance sheet for 1998 held $30.1 million in interim financing that the board provided for the construction of the new Conseco Fieldhouse. All the operating revenues from the field house - including broadcast revenues - will go to the Pacers, not the CIB. However, the CIB - and its taxpayers - will be responsible for all major repairs of the field house under the terms of the current contracts with the Pacers.

If you want to know who's responsible for bringing taxation without representation to our city, the laws creating the Capital Improvement Board were enacted by the Indiana General Assembly; the contracts giving your money to the CIB (and then to the Pacers) were approved by Unigov's mayors and the City-County Council; the taxes levied by the CIB were recommended by Unigov's mayors and sponsored by Unigov's representatives in the General Assembly.

@ Copyright 1999 NUVO