Greater Louisville, Inc. (GLI), Louisville's chamber of commerce, hired the accounting firm of PricewaterhouseCoopers LLP to conduct a feasibility study on the prospects of attracting an NBA professional basketball franchise to the city. In a report released today, it appears that these prospects are dim, to say the least.
Thirteen years ago, when community leaders were deciding whether or not to build an expensive basketball arena downtown, GLI sought advice from the same accounting firm, and was advised at the time that use of the planned riverfront arena by a professional basketball team would be critical to the financial feasibility of the project.
Following the construction of the $450 million, 22,500-seat KFC Yum! Center complex, the Louisville Metro Government expended a significant amount of taxpayer funds, in an attempt to lure an NBA franchise to the arena; all to no avail.
The KFC Yum! Center was completed, after a bitter controversy in which University of Louisville athletics director Tom Jurich, along with University of Louisville president James Ramsey, local pizza magnate John Schnatter, and Humana co-founder David Jones, expressed serious concerns and reservations about the project. Current estimates indicate that the total debt on the bonds used to finance the arena will amount to at least $573 million, over 30 years.
The GLI study identifies a number of significant problems relating to lack of local support for a professional basketball team, including a relatively low number of corporations willing to participate in funding the team, and potential difficulty scheduling games at the arena, because of its use by the University of Louisville's basketball team.
The report also expresses concerns about the fact that no two existing NBA markets with less than 3.5 million residents are located within a five hour drive of one another. A portion of the resident base within a 90-minute drive of the KFC Yum! Center also resides within a 90-minute drive of Bankers Life Fieldhouse, home of the Indiana Pacers.
Finally, the report indicates that local support for college basketball would militate against support for a professional team: "Louisville has a well-established basketball fan base, but the unique dynamic that exists between the community and college basketball could serve as a potential constraint should a local NBA team be improperly positioned as a competitive versus complementary or differentiated offering."
CLICK HERE to view a summary of the GLI report (3 Pp., PDF)