INDIANAPOLIS (Map, News) - Larry Bird has conquered nearly every basketball challenge he's faced.

But even the 1980s Lakers weren't as tough as what lies ahead for the NBA Hall-of-Famer.

Bird has full, unquestioned control of basketball decisions for the Indiana Pacers now that Donnie Walsh has left as CEO and become president of the New York Knicks. That means Bird is responsible for rebuilding a proud franchise that has missed the playoffs two straight years and still is reeling from the brawl with Detroit Pistons fans in 2004.

When Pacers co-owner Herb Simon announced Wednesday that he'd take a more hands-on approach by becoming chairman and CEO of Pacers Sports and Entertainment, the pressure on Bird increased. Simon is realistic but expects results.

"With all the complexities of the salary cap and the draft and all the rules and regulations, things have to move within a framework," Simon said Wednesday. "I think any situation, you have to talk in terms of framework of one to three years. You can't talk two months."

Pacers fans have high expectations because of the franchise's success under Walsh.

Indiana reached the Eastern Conference finals six times and won the Central Division four times during Walsh's 22-year stay as an executive. The Pacers made the NBA finals in 2000 and had the league's best record in 2003-04.

That success seems like long ago, as Indiana finished 36-46 this season, one of its worst seasons in two decades. The franchise has a soiled public image, no salary cap room, perennially injured stars and disappointed fans who are staying away from Conseco Fieldhouse.

Not the ideal circumstances for Bird.

"Taking over for Donnie in this position's probably going to be one of the most challenging things I've ever faced in my 28 years in this league, with our cap the way it is and our team performing the way they did this year," Bird said.

Bird's selling point is that he's a proven winner.

He led his college mid-major team Indiana State to the NCAA finals in 1979, won three NBA championships and three MVP awards with the Boston Celtics and basketball gold in the 1992 Olympics. He was coach of the year with Indiana in 1998 and took the Pacers to the NBA Finals in 2000.

But things have changed for Indiana since Reggie Miller retired in 2005.

The Pacers had the worst attendance in the league this season and Simon said the franchise has lost money three straight years. Simon said he's committed to keeping the Pacers in Indianapolis. So part of Bird's job will be to make the team marketable and profitable by bringing in good players who are popular with fans.

"No one likes to lose basketball games, and no one likes to lose money," Simon said. "Having said that, we've shown in the past that this team belongs in Indiana and in Indianapolis. We have no question that this marketplace can get together and come back and be there."

For that to happen, Bird must manage, or trade, players who have damaged the franchise's image. Jamaal Tinsley, Shawne Williams and Marquis Daniels all had issues with the law the past two years, and David Harrison was suspended five games this season for violating the league's anti-drug program.

Simon said management bears some responsibility for the problems, but so do players. He wouldn't say those players are under additional scrutiny.

"I don't like to put it that way," he said. "We like to think that we have quality players, and we like to think everyone is capable of a mistake, but we like to think that they have enough respect for us and the city and themselves to keep out of trouble."

Bird laid the foundation for facing this challenge by handling the draft, with oversight from Walsh, since he became president in 2003.

His best move was selecting Danny Granger in the first round in 2005. Granger averaged a career-high 19.6 points per game this season and 32 points over his last four games.

But Harrison, drafted in 2004, has been a bust, and Williams, picked by Bird in 2006, is a capable scorer who struggles defensively at times. Bird also traded to get James White in the 2006 draft, then the team cut him before the end of training camp.

Bird was involved in the trade that sent Stephen Jackson and Al Harrington to Golden State for Mike Dunleavy and Troy Murphy. The move initially was criticized, but looks much better since Dunleavy and Murphy have adapted to coach Jim O'Brien's up-tempo offensive system. Dunleavy averaged a career-best 19.1 points per game this season and is a top candidate for the league's most improved player award.

Bird's primary goal last summer was to get outside shooters to fit into O'Brien's system, and he succeeded by adding Kareem Rush and Travis Diener. He also added point guard Flip Murray late this season, a move that paid immediate dividends and almost got the Pacers into the playoffs.

Bird's biggest move was firing Rick Carlisle after last season and replacing him with O'Brien. The Pacers improved their record by one game this season, despite stars Jermaine O'Neal and Tinsley missing a combined 83 games with injuries.

"Coach O'Brien's fine," Bird said. "He's doing everything he said he was going to do. We've upped the tempo, given our fans a different look. We had some players that have had their best years so far."

Indiana won 11 of its final 16 games, giving Simon hope that Bird is on the right track.

"I was very pleased," Simon said. "We seemed to click in passing and ball movement. I think that portends a more exciting season next year."

The Pacers ranked seventh in the league in scoring, but 26th in points allowed.

"We've got the guys here on the coaching staff, and hopefully over the summer, they can look at the talent we have and we can get better on the defensive end," Bird said at a news conference this week. "I think if I look at our team this year, the one thing I'm most disappointed in is the way we defended."

Bird said changing that is going to take time.

"Obviously, we've got to get better players in here, and we have to do the things necessary to get us some cap space," he said. "Hopefully by the time we're done we're going to have a team you can be very proud of."