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Pacers Could Benefit From Arena Revenue Sharing

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The Indiana Pacers have an attendance problem. There is no need to sound the air sirens. Anybody who watched on television, viewed a photo or attended a game at Conseco Fieldhouse last season is well aware that it seemed like things weren't healthy in the Pacers ticket office.

If you attended a Pacers contest versus any team not named the Lakers, you probably felt like me and my cousin did for most of the year. You couldn't help but take on the persona of the "Wahoo Drum Crew" or "Friends of the Feather" fan section from the film Major League. At Conseco, it was quiet and lonely in an empty stadium, while you tried your best to cheer and chant relentlessly from your empty section in the balcony. Eventually, every game would turn into a Major League quote fest as we compared legends Jake Taylor, Willie Mays Hayes and Harry Doyle to the floundering players and staff of the blue and gold.

Since not one Pacers player materialized in the form of "Wild Thing" last year (we had our hearts set on Brandon Rush), attendance never picked up. At some games, it wouldn't have taken the length of a quarter to count the number of bodies in the balcony. Then I'd read that the attendance figure wasn't actually that bad, at least in official NBA terms. Indiana's official average for attendance in 2008-09 was 14,182 per game, which was a healthy 28th of 30 teams.

But that number scratches only the surface.

Each season the company Revenue for Sports Venues obtains all of the behind-the-scenes numbers of the major sports teams, allowing for people who pay the $395 premium to know exactly what's going on behind Oz's curtain. CBS Sports took the plunge for us, obtained the information and released some of it, including the top five best and worst franchises in each of the four attendance categories. The good news is the Pacers appear on three of the four lists. I'll trust that you can figure out the bad news.

The four categories examined ticket revenue (selling the most tickets for the most money), pricing power (average revenue from season tickets), total tickets sold, and actual attendance (percentage "drop count" of people who bought but didn't show).

The reason CBS Sports obtained the information was to help explain one of the biggest issues heading into the Collective Bargaining Agreement negotiations between owners, players and the commish. The numbers show the disparity of the "have's" and "have-not's" in the NBA. The have-not's are getting vocal about the NBA's revenue sharing between teams as they're getting left behind...far, far behind in the dust.

CBS Sports' Ken Berger writes the following:

"In the 2008-09 season, nine teams accounted for roughly half the ticket revenue in the 30-team NBA, according to the league data: the Lakers, Knicks, Celtics, Suns, Bulls, Cavaliers, Warriors, Mavericks and Raptors. In all, 12 teams netted more than $1 million in ticket revenue per home game, the others being the Thunder, Rockets and Spurs. Of these, seven made the playoffs. In contrast were 12 bottom feeders accounting for only 26 percent of ticket revenue: the Grizzlies, Timberwolves, Bucks, Hawks, Pacers, Bobcats, Wizards, Nuggets, 76ers, Nets, Hornets and Clippers. Only the Hawks, Nuggets, Hornets and Sixers made the playoffs. "

In total ticket revenue for 08-09, the Pacers netted an average of $484,105 per game, slotting them 26th in the league. Compared to the NBA's top revenue team, the Pacers received under 25 percent of what the Lakers earn per game, which is a hearty $1.96 million. Therefore, in a full season the Pacers rake in $19.9 million from ticket revenue, while the Lakers pummel the league with an $80 million take at the gate in a full year. Only the Hawks, Bucks, Timberwolves and Grizzlies bring in less than the blue and gold.

The issue that the "have-not's" are hoping to resolve with the new CBA is to get arena revenue sharing added to the league. The NBA shares its broadcasting, licensing and merchandising revenue equally, but arena revenue is not shared (of course, the Pacers don't receive all of its rightful access to TV revenue as former ABA franchise Spirit of St. Louis is still "stealing" from its deal made in 1976). But it's not teams such as the Pacers and other non-playoff small market teams that are making the most noise. Berger reports that the Class Welfare Index shows some things you'd expect and some things you might not.

"Portland, New Orleans and Orlando are great examples of why a better revenue sharing model is needed. All three teams were above the league average in total ticket sales but below average in ticket revenue simply because those markets can't support high enough prices. The Blazers are the most blatant example, selling an average of 17,872 tickets per game (third in the league) but generating only $813,809 per game (15th)."

People wondered how the Pacers could have seemingly lost money every year since the Simons bought the team in 1983. The new report shows that even when a small-market team is at its peak and attendance is flowing like wine, it's still extremely difficult to generate enough money because the ticket prices must be kept so low.

Another stat that CBS Sports released was the drop count percentage, a number that shows how many of the people who have tickets to a game actually click through the turnstiles. The Lakers, in typical fashion, lead the league with a 92.2 percent drop count, while only 70.7 percent of people with tickets show their faces in Conseco, landing the team 27th in the NBA.

But the stat that really shows the flaws within the attendance figures is the "total tickets sold" number, which gets rid of the sludge that clog and balloon the NBA attendance figures. In reality, of the 14,182 fans that attended games last season, 5,000 of them were there only in spirit. The attendance figure released by CBS Sports is 9,745, ranking Indiana 26th in the league. If you're the positive type, at least the adjusted number moves the team up two spots in the NBA attendance ranking. If you're the negative type, you might realize that the Pacers numbers are only 2,000 more than the Indiana Fever averaged last year. Of course, the Fever's number is surely inflated as well.

The Pacers must now continue on getting that number back up to the standards set in the late-90's. Winning obviously helps, but at least one analyst is blasting teams such as Indiana for not being creative enough with their ticket packages. CNBC's Darren Rovell noted that many teams didn't offer much beyond the basic season ticket packages when the regular season schedules were released at the beginning of August.

The Pacers did their custom full-season, half-season and four mini-plan packages. But Rovell criticized ticket packages that don't give customers enough individuality and personal preference. He said too many teams are selling junk to the customer for a premium.

The Pacers, for instance, offer an all-Friday's package that includes three non-Friday games. The "All-Star Weekends" unit includes a Wednesday contest, and the "Sixth Man Special" gives the great opportunity to see nine teams that didn't make the playoffs last season. Rovell gave props to the Hawks for offering a 13-game plan that featured 12 playoff teams for as low as $260 per seat. He also said the Bucks offered a Click-N-Pick 10-game plan where you pick which seats you want for each game, plus two games are free.

To be fair, the Pacers began offering many different ticket plans after the team did a tailspin into the ground last season. So why not start offering those tickets now? I've heard several fellow season-ticket holders say they're hesitating on renewing because they think those better ticket packages will be available by January, just like last year. And they're probably right. By January of last season, I could enter a ticket code for any home game in January, February, March and April and get tickets for the fun price of -- free! Any game. Club-level seats. It was fantastic. Until I realized that I had paid out the wazoo for season tickets that were much higher, much more expensive and they didn't include the "free food and drink" combinations or whatever other gimmick the Pacers threw out there. I took advantage of the deal. But how many people who didn't buy season tickets were getting free games and better packages than me? Probably a lot.

It's disheartening as a fan to see the attendance numbers so low. It was easier to live with the 14,000 per game number. But the 9,000 per game figure is a low blow. Understandably, the numbers are inflated every year in every sport, but when the Pacers are so low, and so rock bottom in the league, it becomes a problem.

Jim Grinstead, who created the Class Welfare Index, sounded like the Grim Reaper when examining the ultimate solutions for teams, citing relocation and contraction as the best way to go. Grinstead said, "The long-term strategy that the NBA has to grapple with is not just revenue sharing, but do I have teams in the right cities? If I pull a team out of Minnesota, am I moving to a market that helps me?"

That could be getting the horse in front of the cart, but the one certainty is that the have-not's owners are prepared for battle with the have's when the CBA negotiations really heat up. The Pacers are one of a few teams that could really benefit from arena revenue sharing. But if you're the Knicks or Lakers of the world, why would you want to give up your money to the teams that can't make it? Welcome to the NBA's version of the Cold War.

Berger noted that "getting big-market and small-market owners to agree on how to share the wealth could be more difficult than getting the owners and players on the same page."

For the Indiana Pacers, the attendance figures tell a lot. The games are just as empty as you think they are. So if you're Roy Hibbert or any other player walking around town this summer and you tell someone, "I play for the Pacers," don't be surprised if you receive a famous quote from Major League. "Here in Indianapolis? I didn't know they still had a team!"

Yup, we've got uniforms and everything. It's really great