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I signed it I like both NBA and college can make it. College is over in April NBA goes another 2 months. It would be cool to see our guys play for the NBA team. Gorgs or behanan would be sweet getting to watch them play for a Louisville NBA team.
I read the entire (very long and in depth) article and am all on board. Thanks for posting the link. Sure gives ALL Kentuckians something to think about. So much was discussed but what makes the most sense to me is we've had both our CARDS and a PRO team in town before. We would not be breaking new ground. What needs to happen is we somehow obtain a responsible NBA team ownership; a rarity to be sure.
Do not want in Louisville. The corporations listed in the article currently are major reasons our basketball team is tops in revenue. Bring in the NBA and we lose some of those sponsorships. There are limited entertainment dollars in Louisville and I'd rather see the Cards get most of it. No NBA please!
Why? If you disagree with me post it here so we can discuss.
If the NBA comes to the YUM Center, expect TJ to build an arena on campus.
I for one don't care about the NBA at all. I haven't been a fan for a few years. I don't want it here because it will only hurt our program.
I read the entire article and honestly though it was pretty poorly written and badly argued.
#1. Heitner states that there is "no reason to believe that a professional team within the Louisville city limits will detract from the University of Louisville basketball program’s success". While that point is true (UofL can be successful on the court with an NBA team in town), it ignores the core problem with having an NBA team in the YUM Center. The core problem is over finances and whether or not an NBA team will financially hurt UofL's athletic department. Remember, basketball funds pretty much every program outside of football so the less revenues the hoops team generates, the less money every other program has.
#2. Heitner states that there is "a legitimate concern" is that the existing lease between the Louisville Arena Authority and the University of Louisville
Athletic Association would prohibit an NBA team from reaping sufficient profits from the arena. Rather than address this issue, he proceeds to gloss over it almost entirely without addressing how or why UofL would want to renegotiate the lease. As they say, the devil is in the details and this is a major roadblock to any discussion of bringing the NBA here. He just goes with the assumption that it will work out for some unspecified reason.
#3. Heitner states that an NBA team's demographic "not only includes residents of Louisville, but also Southern Indiana and the rest of Kentucky." As someone who grew up in Northern Kentucky, I have a hard time believing that people up there are going to start driving down to Louisville in droves for NBA games. Cincinnati already offers a ton of sports options (NFL, MLB, minor league baseball, NCAA, etc) and all that competition means that sports revenue is pretty much tapped out. Furthermore, we already have a perfect example of why the market argument doesn't work by looking at the Pacers. Indy's team draw absolutely zero interested in the Cincinnati market (you might find 1 or 2 Pacers articles over the course of a six month period in the newspaper or on TV news) and Indianapolis is only slightly further from Cincinnati than Louisville (112 miles vs. 100 miles). That doesn't even cover the issue of market overlap in southern Indiana (Pacers are drawing fans from there as well) or the fact that relying on places like Bowling Green and Owensboro to help support an NBA is downright silly. This looks to me more like a "let's stretch it until the numbers look acceptable" rather than a factual examination of what type of market we actually have.
#4. Heitner mentions a petition and facebook page that has "over 1,500 signatures". First, a petition of 1,500 signatures in a city with a metro population of 1.44 million (the Louisville facebook page has 117,758 likes) is tiny. Having 0.1% of the local population sign a petition doesn't seem like a strong show of support to me. Second, I'm always wary any time an author uses social media, google keyword searches, etc to try to support an argument (anyone remember the article in that said we had the smallest fan base in the Big East based on media market and google keyword searches?). Social media isn't a scientific survey nor does it necessarily show a correlation between wanting an NBA team in Louisville and actually attending the majority of games (lot of people support causes on social media but that doesn't mean they actually donate money to or attend said causes).
#5. Heitner then cites a "poll" he conducted on twitter as evidence that there is support for the NBA team in Louisville. What he fails to mention is that the poll was not scientific and that there are major issues with his sampling method. For example, 200 people is way too small of a sampling profile to reflect a city of 1.44 million (he did nothing to ensure his sample was reflective of the population at large). Additionally, there are issues of co-dependence - if the people that follow him on twitter are mostly pro-sports fans that live in Louisville, then he is sampling a bias population (i.e. he is only polling people who will confirm the bias). It would be like me taking a poll on ITV and asking if UK sucks and then stating that based on my "poll", it is indeed obvious that the state of Kentucky thinks UK sucks.
#6. He commits a major logical fallacy by assuming that college basketball fans will also be NBA fans because they enjoy basketball. Just because someone likes a sport at one level of play does not mean that they will enjoy that sport at a different level of play. Being a college football fan does not mean you attend NFL games regularly (the Miami Dolphins, Cincinnati Bengals, etc are in areas where high school and college football are immensely popular but they have problems with attendance). Just because this area is crazy for college basketball does not mean it will be crazy for NBA basketball (North Carolina and the Bobcats are a perfect example).
This post has been edited 2 times, most recently by UofLgrad07 19 months ago
U of L basketball will always thrive. The question is whether or not it will make enough money to pay for everything else. And even though it's a different sport, the football program would be in greater financial jeopardy due to the risk of losing more casual fans.
But the reality is this. The arena is on a financial trajectory for bankruptcy. Something is going to have to give. At a minimum, U of L's lease will eventually have to be modified. Honestly, I think that is what this is all about. The city and state are going to want some modifications in the lease to get the arena in the black.
Not only will it hurt UofL, but more importantly, it will crush the taxpayer and the city coffers. It would be a disaster. Until we get more Fortune 500 companies and big salaries in this town, the pie consisting of people who can afford basketball ticket prices is getting smaller. A smaller pie with smaller pieces. I swear I don't understand why people can't understand this.
After awhile, a few decades actually, it's time to ignore J. Bruce Miller. He lacks credibility.
NO NBA, Just something else our dwindling tax base would need to support.
You're just looking at one part of the puzzle here. The arena is already going to crush taxpayers. The city is on the hook for something like $9 million every year on this deal. They budgeted for half that. And even with the city paying in $9 million a year, the arena won't be able to pay its bond debt. Arenas are what cost the money. NBA teams are usually a way to minimize the damage.
What typically happens is something like this. The arena costs whatever it costs. Then for an example, the NBA team basically uses 50% of the arena. But they only pay for about 35% of the arena. The other 50% of the events at the arena all pay their fair share. So that leaves the government picking up the tab for 15% of the arena. But at least it is getting used to its full capacity.
In our case, U of L is probably using only 30% of the arena's available dates. But we are probably paying for less than 20% of the cost, giving us a 10 percentage point subsidy. Of the remaining 70% of available dates, they are probably only using half of them. So, that means the government is going to have to pick up the tab for something like 45% of the arena's cost. And that is a much worse arena deal than any NBA deal.
Those percentages are almost certainly WAY off, but the relative proportions are accurate. The city and state are going to be paying for a much larger percentage of the arena with U of L as the anchor than they would have with an NBA team as an anchor. That's just the reality of the situation.
THAT is why college teams can't anchor $300 million arenas. We overbuilt. We could have saved over $100 million by going with the Water Company Block and avoided most of this issue, but NOOOOOOOOOOOO! Anyway, sorry to open that can of worms.
My point in going on this rant is that anyone with a calculator who knew how to do the math could see this coming. I was posting on this issue and writing letters to the editors back when this was being decided. I am in an excellent position to say "I told you so" to anyone acting like the chosen arena deal was the best way to go. It wasn't. And we are going to pay through the nose for it.
Neither have I. It is a "favorites" league. Those with the blesings of the NBA office get to play with a different set of rules than the average Joe player. Never been a big fan of that.
A simple question: is your butt jealous of the amount crap coming from your mouth?
I would rather the NBA not come to Louisville, BUT there is one delicious thought. Follow please....
NBA team "X" agrees to come to Louisville
UofL isn't exactly cooperative in scheduling concessions
UofL builds an on campus arena
UofL can then play NCAA tourney games at the YUM!!!!
The last part isn't exactly a bad thought, now is it? Again, I'm not saying I want an NBA team here, but hey if it's gonna happen, things could be worse.
And...UL no longer sells as many luxury suites, which is a HUGE part of our basketball revenue. NO to the NBA! We don't need welfare for professional athletes in this town. If anyone wants to watch the NBA they can take the short drive to Indy. The funny part is I know TONS of people that go to REDS games, but I don't know a single person that's ever driven to Indy for a NBA game.
This post was edited by CardsDude 19 months ago
Well said and agree 100%.
Doesn't the City have a budget of almost 1 Billion dollars? If the City is on the hook for 9 million dollars a year on the YUM! (and I am assuming this is an accurate number), and had already budgeted 4.5 million, then that means the City is on the hook now for an extra 4.5 million per year. That's approximately less than half of one percent of the total budget.
What am I missing here? I agree that the YUM! needs to do better and attract more events to meet projections. But I don't understand how the taxpayers are getting killed or how the City is being greatly damaged. The revitilazation of the downtown area around the YUM! has been amazing and the arena is still just in its infantcy. Up until recently, the YUM!'s management has been subpar. With a new management company in place and more attractions coming in to the arena and go to destinations built within the taxing district, the area will make more money and eventually hit projections.
In the meantime, money paid by the City or the State to make up for shortfalls is an investment, just like the arena itself was.
AKA Big Game James
The city is contractually obligated up to a maximum of $9 million. Or at least that was the number being floated when the bond underwriting was being done. But that payment still leaves the arena FAR short of the revenue it needs to amortize its bonds.
Without a dramatic increase in events at the arena or some miraculous increase in property taxes and sales taxes in the surrounding area, then the arena is going to default.
Oh, and the other problem the city and the state have is with this ridiculous 5-square-mile TIFF district. Basically, all increases in property taxes within a 5-square-mile distance of the arena are dedicated to paying the bonds first. That means any and all increases in property taxes all the way from the West End to Old Louisville and on into the Highlands go to pay the bonds first and then for anything else we might need second.
Because the "base year" was set at a time when taxes were unusually high, the arena is going to be eating a crapload of our property taxes for years to come. And that figure is not included in the $9 million.
I am not pushing for the NBA. What I originally wanted was an arena we could afford for what we needed. We didn't need a $320 million palace. I'm just trying to get the word out about how effed up this deal is now. The government officials don't really want to say any of this because they don't want people to know just what they got us into.
U of L doesn't really want us to know because they like being the underdog. But that would really be tough if everyone knew we basically walked away with the King's jewels on this deal.
So if what you are saying is correct, the most the City can owe in any given year is 9 million dollars, with half of that already built into the budget.
What is the current yearly shortfall on paying for the bonds? To my understanding, the Commonwealth stands behind these bonds and must pay the shortfall. Personally, I don't care if the Commonwealth gets stuck paying this extra amount. As a citizen of Jefferson County, I have been subsidizing the rest of the state for my entire tax paying life. Certainly the Commonwealth can kick some of that money back this way instead of building another highway to Pikeville?
Whether you like where the YUM! was built or what was paid to build it, it is here. For once in my lifetime, the City and the State actually made an investment in something and that something is the finest arena in the country. Whatsmore, the something actually sits in Louisville. The arena can be run much better, but if it loses a little money then it is still a worthy investment for both the City and State. Much more so than much of the nonsense our government spends money on.
This post was edited by BigRedJ8680 19 months ago
They are covering the interest payments (which are all that is due right now) by dipping into capital reserve funds that are supposed to be used for periodic replacements of things like flooring, plumbing fixtures, etc. - things that wear out over time.
They have to start paying back the actual principle on the bonds in a couple of years from now. That's when the deal blows up because they are way short. I don't have the exact figures because I don't have time to keep up with it as closely as I used to. But they are in a major hole.
The bonds have a "non-recourse" feature to them, which means the state and city are only on the hook for so much. The city's limit is the $9 million. I honestly don't know what the state's is, but I know it is well short of what will be owed. That means the arena goes into default, and the bond holders can take title.
The default could very well jeopardize U of L's lease. That's where the problems start for us.
My preference is to say "no" to the NBA, but if we can get an owner that is tied to the city and committed long term, it could work.
I realize that RIGHT NOW, basketball makes A LOT of money and pays for many other programs. But we are about to enter the ACC and make a gazillion dollars as they figure out this football tournament. I don't think we'll suffer much if our basketball program comes back to earth a little bit on revenue, closer to what other schools make.
Our football team should start reaping the benefits of ACC membership, helping to close that revenue gap with the men's basketball team as well. I just think the University of Louisville will continue to be the prized possession of the city, with UK next, followed by an NBA team. The NBA team may not make a bunch of money, but I don't think any school that is a current and future member of the big 5 conferences will be hurting for revenue anytime soon.
An NBA team WILL harm UofL. It is economics 101. It is not debatable. End of story.
Anyone who truly loves UofL basketball should be completely opposed until the end of time.
And...like I said, that would be ONE positive about the situation. I didn't say that it would be good overall, in fact I said the opposite.
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