Yesterday, the Indianapolis Star posted an opinion piece by writer Erika Smith, that flippantly dismissed the planned soccer stadium for local NASL team Indy Eleven. Before I write out why the stadium is a fantastic idea, let me address The Star and my own biases.
First of all - my own biases. I am a season ticket holder for Indy Eleven and love the sport of soccer. That is my bias. But, I have no economic or social relationship to Indy Eleven or any of it's players and staff. Well, I know their community relation's director, but, at this point, we are acquaintances more than friends. This is as unbiased as you're going to get.
In my day job, I am a scientist. And, as such, I care deeply about the truth. And that is what this blog post (My first in years) attempts to do - to understand the impact of this stadium. I genuinely don't even want you should subscribe to this blog - because I won't really update it. Anyway, here goes.
To those of us who still read newspapers and magazines, print media is the most sacred of all journalism. Articles in print media are well-researched and not-reactionary. This is why an article in the New Yorker/Wall Street Journal has more gravitas than anything HuffPo or Gawker will publish. The Indianapolis Star is our local newspaper and has upstanding journalists such as Jill Disis, but has, of late, been devolving into click-baiting. There has been a preponderance of unsubstantiated opinion articles that belong in poorly-crafted blogs rather than in a reputable newspaper.
Ms. Smith's article falls into that category. We are told that the stadium is a terrible idea, yet, no evidence is given why that is true. We are told that the money would be better spent on multiple other things. Yet, the author does not care to cross-check whether money devoted to the stadium would take away from money for those other things. The author does zero research for this article. So much so, that she does not even fact-check how many wins the team had all season; something a simple google search would have answered.
In researching my blog post, I was able to directly email the GM of Indy Eleven - Mr. Peter Wilt. I have no relationship with the man, other than that I follow him on twitter. Yet, he immediately forwarded my questions to an Indy Eleven spokesperson who replied to me within 24 hours. Did the author or Indy Star try to reach out to Indy eleven at all? Of course not. Let me reiterate - as a nobody blogger - I was able to get answers to my questions. I tweeted The Star to ask them if they would be willing to post my "well-researched other side of the stadium story". There was no response. I submitted a letter to their editor this morning - I doubt that will get published either.
At best, the Indy Star article was unsubstantiated. At worst, it was intentionally incendiary.
Now, back to the question at hand --- Is this stadium a good idea? Let's split this answer into two sections: 1. The socio-cultural impact and 2. The fiscal impact (which includes a Q and A with the indy eleven spokesperson).
1. The sociocultural impact - I will keep this section short, because most people are in agreement over the benefits of having soccer in Indianapolis. Soccer is hitting it's exponential phase in popularity across the country. From being a marginal sport 10 years ago - being shown on paywall channels such as Setanta Sports - to being a mainstream money churner on NBC these days. Closer to home, in Indianapolis, soccer has taken off as well. As the Indy Star article pointed out, Indy Eleven sold out all of their home games. And, each week, fans would travel to cities across the country to support the team.
Soccer is the sport of the masses. As a child, you can play this sport anywhere as long as you have a ball. You don't need helmets, you don't need bats, you don't need sticks, you don't need hoops. You don't even need grass. The reason I regurgitate these cliches is this - minority communities rally around the sport of soccer. If the city of Indianapolis is serious about increasing it's diversity, a thriving soccer scene is a massive selling point. Will a new stadium galvanize communities? Absolutely! A beautiful new stadium is a fantastic way of attracting good players. Attracting good players is an ideal way of winning games. Winning games is the best way to start a "dynasty" - a word that the Indy Star article throws in our faces. In the science-world, we call this a positive-feedback loop. And, socio-culturally, a new stadium would be the start of a tremendous positive feedback loop.
The fact that the stadium would also be used for other 'non-mainstream' sports such as Lacrosse is fantastic. And, frankly, a lot of good musical artists skip Indianapolis as a venue. Perhaps, the opportunity of performing at a unique novel stadium would attract excellent bands that would normally head to Louisville instead of us (I'm looking at you, Death Cab for Cutie). From an architectural standpoint as well, the stadium would be stunning.
2. Fiscal impact - This is the area most Hoosiers are concerned about. It was clear from her article, that Ms. Smith did not read the proposal or the FAQ section before her article. So, let me summarize what it says ---
a) Over time, the stadium will pay for itself - by ticket sales and taxation.
b) It will cost 82 million to build and be ready in 2017.
c) Neither Carroll stadium (too small, not enough facilities), nor Lucas Oil (scheduling conflicts, too big) would be a long-term solution to the problem.
Admittedly, the succinct nature of the FAQ section, necessitated some follow up questions. I got in touch with an Indy Eleven spokesperson and asked him some obvious questions. I am copy pasting the entire Email, for full disclosure. My questions are in red, his email and responses are in Blue. I have highlighted portions that I deem to be crucial. But, I encourage you to read the entire interview.
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First, let me say thank you for taking the time to dive into this issue. And especially for taking the time to write a proper response to the Indianapolis Star in regards to the recent column.
Before I get into the answer, just know that the current bill language and the financial mechanism to fund the stadium is still in discussions and will likely change as we progress through the legislative process. With that said, as to your question about a loan from the city for construction - We are proposing a government-financed loan that would be secured by taxes captured at the stadium - these are user taxes paid for only by those who attend stadium events. They are taxes such as admissions tax, food and beverage tax, and income tax on employees (such as stadium employees, Indy Eleven players and even players from opposing teams). What government entity we are talking about is still to be determined - but likely to be a mixture of state and local issue of bonds with the potential for some kind of back-stop from Indy Eleven.
We continue to have productive talks with lawmakers and various stakeholders to create a final proposal that will responsibly finance the construction costs of the facility without raising taxpayer dollars and provide measures that will not leave them on the hook for any potential shortfalls in revenue generated from the stadium. With this structure in mind, the stadium would be owned by a public entity with Indy Eleven serving as a primary tenant.
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Let me add a couple of points. I do not think that the support will die out. Having loved this sport all my life, I know that soccer fans are the most loyal fans out there. There is a camaraderie among soccer fans stateside as well - probably from being continually asked to defend the merits of the sport. More than that, Indy Eleven boasts arguably the best set of supporter groups - Brickyard, Slaughterhouse, etc. Having befriended a few of these people, I can assure you that they will stick by this team through thick and thin. Besides, I think the increased revenue generation is a huge benefit. Although I don't have the statistics for it (and I tried to look them up), based on anecdotal evidence, I can assert that the games at IUPUI were a huge boost to the economies for the restaurants/bars around Mass Ave/downtown/IUPUI.
The only concern that remains is the EXACT source of the original loan. And, honestly, we can only wait and watch as that develops. But, to denigrate the proposal before it has taken off - based on a bunch of straw-man arguments - is just juvenile.
So, is this stadium a good idea? Yes, I think so. I am cognizant of the risks of taking a loan. Any loan for that matter. But, I think in spite of the risk, the eventual socio-cultural and fiscal benefits outweigh the risks. And, I for one, whole-heartedly support the proposal for the new stadium.
I hope you will share this with your friends and get in touch with your legislators. Let's help make this happen. If you want to find me on twitter, you can do so at @nipunchopra7.
***Emily Neitzel (@emilyneitzel) contributed to the research of this article***
First of all - my own biases. I am a season ticket holder for Indy Eleven and love the sport of soccer. That is my bias. But, I have no economic or social relationship to Indy Eleven or any of it's players and staff. Well, I know their community relation's director, but, at this point, we are acquaintances more than friends. This is as unbiased as you're going to get.
In my day job, I am a scientist. And, as such, I care deeply about the truth. And that is what this blog post (My first in years) attempts to do - to understand the impact of this stadium. I genuinely don't even want you should subscribe to this blog - because I won't really update it. Anyway, here goes.
(at Indy Eleven's first home win with good friends)
To those of us who still read newspapers and magazines, print media is the most sacred of all journalism. Articles in print media are well-researched and not-reactionary. This is why an article in the New Yorker/Wall Street Journal has more gravitas than anything HuffPo or Gawker will publish. The Indianapolis Star is our local newspaper and has upstanding journalists such as Jill Disis, but has, of late, been devolving into click-baiting. There has been a preponderance of unsubstantiated opinion articles that belong in poorly-crafted blogs rather than in a reputable newspaper.
Ms. Smith's article falls into that category. We are told that the stadium is a terrible idea, yet, no evidence is given why that is true. We are told that the money would be better spent on multiple other things. Yet, the author does not care to cross-check whether money devoted to the stadium would take away from money for those other things. The author does zero research for this article. So much so, that she does not even fact-check how many wins the team had all season; something a simple google search would have answered.
In researching my blog post, I was able to directly email the GM of Indy Eleven - Mr. Peter Wilt. I have no relationship with the man, other than that I follow him on twitter. Yet, he immediately forwarded my questions to an Indy Eleven spokesperson who replied to me within 24 hours. Did the author or Indy Star try to reach out to Indy eleven at all? Of course not. Let me reiterate - as a nobody blogger - I was able to get answers to my questions. I tweeted The Star to ask them if they would be willing to post my "well-researched other side of the stadium story". There was no response. I submitted a letter to their editor this morning - I doubt that will get published either.
At best, the Indy Star article was unsubstantiated. At worst, it was intentionally incendiary.
(in case you haven't seen the proposal yet)
Now, back to the question at hand --- Is this stadium a good idea? Let's split this answer into two sections: 1. The socio-cultural impact and 2. The fiscal impact (which includes a Q and A with the indy eleven spokesperson).
1. The sociocultural impact - I will keep this section short, because most people are in agreement over the benefits of having soccer in Indianapolis. Soccer is hitting it's exponential phase in popularity across the country. From being a marginal sport 10 years ago - being shown on paywall channels such as Setanta Sports - to being a mainstream money churner on NBC these days. Closer to home, in Indianapolis, soccer has taken off as well. As the Indy Star article pointed out, Indy Eleven sold out all of their home games. And, each week, fans would travel to cities across the country to support the team.
Soccer is the sport of the masses. As a child, you can play this sport anywhere as long as you have a ball. You don't need helmets, you don't need bats, you don't need sticks, you don't need hoops. You don't even need grass. The reason I regurgitate these cliches is this - minority communities rally around the sport of soccer. If the city of Indianapolis is serious about increasing it's diversity, a thriving soccer scene is a massive selling point. Will a new stadium galvanize communities? Absolutely! A beautiful new stadium is a fantastic way of attracting good players. Attracting good players is an ideal way of winning games. Winning games is the best way to start a "dynasty" - a word that the Indy Star article throws in our faces. In the science-world, we call this a positive-feedback loop. And, socio-culturally, a new stadium would be the start of a tremendous positive feedback loop.
The fact that the stadium would also be used for other 'non-mainstream' sports such as Lacrosse is fantastic. And, frankly, a lot of good musical artists skip Indianapolis as a venue. Perhaps, the opportunity of performing at a unique novel stadium would attract excellent bands that would normally head to Louisville instead of us (I'm looking at you, Death Cab for Cutie). From an architectural standpoint as well, the stadium would be stunning.
2. Fiscal impact - This is the area most Hoosiers are concerned about. It was clear from her article, that Ms. Smith did not read the proposal or the FAQ section before her article. So, let me summarize what it says ---
a) Over time, the stadium will pay for itself - by ticket sales and taxation.
b) It will cost 82 million to build and be ready in 2017.
c) Neither Carroll stadium (too small, not enough facilities), nor Lucas Oil (scheduling conflicts, too big) would be a long-term solution to the problem.
Admittedly, the succinct nature of the FAQ section, necessitated some follow up questions. I got in touch with an Indy Eleven spokesperson and asked him some obvious questions. I am copy pasting the entire Email, for full disclosure. My questions are in red, his email and responses are in Blue. I have highlighted portions that I deem to be crucial. But, I encourage you to read the entire interview.
--------------------------------------------------------------------------------------------------------
First, let me say thank you for taking the time to dive into this issue. And especially for taking the time to write a proper response to the Indianapolis Star in regards to the recent column.
1. The quoted 82 million is described as " if you don't go, you don't pay". The organization makes it clear that the money will be generated from stadium ticket sales/tax/etc. Forgive my ignorance, but would you be essentially be taking a loan from the city for the construction and then paying them back?
2. The FAQ on the website says that the proposal "nor will it divert taxpayer dollars earmarked for services or programs funded by the City or State.". Where exactly would the 82 million borrowed (as I assume it will be) come from? The city doesn't have 82 million sitting around, I assume.
Per my answer above in Q1 ... These taxes Indy Eleven is proposing to capture to pay down the debt service for the stadium's construction is new revenue. These tax dollars are currently not captured at the local or state level. So, that's what we mean when we say we're not diverting taxpayer dollars - because the tax revenue generated from the stadium will be new revenue. And again - who we are paying back will be determined as this bill progress through the legislative process.
3. (and this is tied to #2) - How do you address the criticism that the money would be better spent on infrastructural improvements (road repair, improved transportation)?
Again - since we're talking about capturing new tax revenue, we're not diverting any funds away from municipal services. In fact, Indianapolis’ new sports and entertainment hub will grow the local and state economies through the attraction of visitors to the Circle City and the creation of jobs through the construction phase and full-time employment once operational. Ultimately, the State and City will benefit from substantial new revenue streams that could not be realized without the existence of the stadium. And those revenue streams help fund the kind of infrastructural improvements that people expect.
Indy Eleven has already shown the team is drawing new visitors to downtown Indianapolis. Wherever the stadium is located will see more tax revenue from all the development and business that come with attendance at events. Hotels, restaurants, bars and retail shops all stand to gain as we bring in fans who otherwise would have stayed home. And the new tax revenue generated from these fans outside our stadium will go toward the City’s budget to pay for infrastructure and public safety.
4. Would any increase in sponsorship be put towards the stadium?(The reason i ask this is b/c I think soccer is still an untapped resource for sponsors - so, indy eleven will hit the exponential phase soon - as far as marketing goes.)
Potential sponsorship revenue streams generated by the stadium will be part of the discussions to be had with the public entity that will own the facility and Indy Eleven, which will be determined by the legislative process.
Regarding sponsorship revenue created solely by the club, the more revenue the team can generate the greater the resources it will have to build both on and off the field (and let's be frank, on-field success absolutely ties in to a club's fiscal success). Indy Eleven is committed to paying 10% of ticket revenue from all taxable events at the stadium back towards the building's construction costs, so the club has shown the willingness to put some "skin in the game" from its revenue streams with the current funding mechanism.
5. What happens if the organization is unable to generate enough ticket funds - what if interest in the sport drops after the initial bump of the debut season?
The 18,500 figure for attendance at the stadium is by design – we fully believe that capacity figure will fit the area’s appetite for Indy Eleven games at a world-class venue. While we are confident in our ability to attract soccer fans to this new home for the sport, we also realize the need to assure taxpayers that they will not be “on the hook” should projections not be met. Discussions are currently ongoing with legislators on the best method for this measure, but it will likely include Keystone – the owner of Indy Eleven – having some responsibility. (see update below)
Very few bills at the Statehouse are passed without any changes during the legislative process, and we anticipate this bill to be no different. We look forward to working with the General Assembly on finding the most responsible funding structure possible that will not put Hoosiers on the hook.
As the discussions on the stadium proposal and legislation continue, I’ll be sure to reach out and update you on any changes. I really appreciate your engagement and willingness to take on the reporting in question.
Update - This afternoon (February 2nd), I was contacted by the spokesperson, and he asked me to make the following change to the highlighted statement in Q5. The statement should read - Discussions are currently ongoing on the best method for this measure, and Indy Eleven will continue those conversations to ensure the team has “skin in the game.”
Let me add a couple of points. I do not think that the support will die out. Having loved this sport all my life, I know that soccer fans are the most loyal fans out there. There is a camaraderie among soccer fans stateside as well - probably from being continually asked to defend the merits of the sport. More than that, Indy Eleven boasts arguably the best set of supporter groups - Brickyard, Slaughterhouse, etc. Having befriended a few of these people, I can assure you that they will stick by this team through thick and thin. Besides, I think the increased revenue generation is a huge benefit. Although I don't have the statistics for it (and I tried to look them up), based on anecdotal evidence, I can assert that the games at IUPUI were a huge boost to the economies for the restaurants/bars around Mass Ave/downtown/IUPUI.
The only concern that remains is the EXACT source of the original loan. And, honestly, we can only wait and watch as that develops. But, to denigrate the proposal before it has taken off - based on a bunch of straw-man arguments - is just juvenile.
So, is this stadium a good idea? Yes, I think so. I am cognizant of the risks of taking a loan. Any loan for that matter. But, I think in spite of the risk, the eventual socio-cultural and fiscal benefits outweigh the risks. And, I for one, whole-heartedly support the proposal for the new stadium.
I hope you will share this with your friends and get in touch with your legislators. Let's help make this happen. If you want to find me on twitter, you can do so at @nipunchopra7.
***Emily Neitzel (@emilyneitzel) contributed to the research of this article***
Thank you Nipun for this. This was going to be my task this weekend when I had a bit more time to devout to the topic to post to my blog, with the very same idea of contacting the team directly to answer my questions. The team has consistently done that in the past for me and it comes as no surprise to me that they did so for you as well.
ReplyDeleteYour article is so well done, I'm going to have to find something else to write. :-)
Hi Drew, thanks for reading! There is definitely room for both of us. I have no doubt that there are many questions still unanswered. If you DO write something about this, get in touch (email/twitter/smoke signals), and I will share it! In the absence of media coverage, we have to help promote this proposal ourselves, my friend. Cheers and have a wonderful weekend.
DeleteDo the math
ReplyDeleteFind me the numbers.
DeleteHere are some of the numbers that are associated with House Bill 1273 (i.e. these are the initial numbers that the legislature is using in their conversations about this proposal):
Deletehttps://iga.in.gov/legislative/2015/bills/house/1273#document-8e37ec45
I've been trying to make sense of this since yesterday. Obviously, most of it is in legalspeak. But, to me, the numbers do add up (setting aside percentage issues). The major question does remain about the EXACT source of the government loan.
ReplyDelete