Q&A: Herb Simon takes charge, says family is committed to Pacers

Herb Simon is taking a new hands-on approach with the Indiana Pacers, which he co-owns with his brother, Melvin.

Simon spoke with IBJ in the days before this year’s
NBA draft about the team’s near-term challenges and long-term outlook.

IBJ: You had a tremendous career
in real estate, but pro sports is a different animal. What makes you think you’re the right person to
be the team CEO during such a challenging time for the franchise?


Simon: It’s not a matter of being the right person. The right guy would
be someone probably with a lot more experience in sports franchises, but I happen to own the team, so
I’m the right guy.

IBJ:
Why do you want to take this on at this stage in your life? Why not retire?

Simon: Well, it’s actually a good time. Our main company is being run very well.
My role there has diminished to some degree, and I have more time to devote to this opportunity.

IBJ: Can you identify a
tipping point where things started to go south for the Pacers franchise and its relationship with the
team’s fans?

Simon:
Well the tipping point everyone points to–and we don’t like to talk about it anymore because we want to talk about
positive things–was probably the Detroit incident and the incidents that followed. That seems to be the tipping point.

IBJ: Have you, in retrospect,
looked back and pinpointed some of the things Pacers management had done to compound some of those things?

Simon: Well, I’m sure
there’s plenty of responsibility and blame to go [around], but we accepted our part of the responsibility
and we’ve tried to correct and we’re making even more efforts to correct whatever shortcomings we had. But a perfect storm
is a perfect storm, and I like to describe that incident as a perfect storm. It wasn’t just what our people did. Ten other
things happened at the same time to cause that unfortunate incident.

IBJ: What were some of those things?


Simon: Well, just go down to, you know, other players involved, the fans
involved, the lack of security. I mean if I go on and on, then you’re starting to assess blame to other
people. We accept our responsibility. We got punished. We won 61 games the year before. We were on our
way to a great season. The fans loved us that year when we came back with a very limited amount of players
and played very well. But it started a series of situations … we’ve lost our way with our fans and we’re going
to do everything we can to get back because this is basketball country, and we want to make sure that our fans are proud of
us again.

IBJ:
What are the most immediate challenges for the Pacers organization going forward?

Simon: I think what we’re doing now is looking at the organization from top to
bottom, basketball and non-basketball. You know, when the team is run under management in one way for
a number of years, it is always good to take a fresh look at it, and this seemed to be the perfect time
with Donnie [Walsh] leaving for us to look at the whole organization, see how we can be more responsive
to our people who work for us, to our team, to the city, to our fans. So with the addition of Jim Morris
[as president] and with the restructuring of our organization … with Larry Bird being fully in charge of basketball, we
have an opportunity now to look at the entire organization and improve in every area that we can.

IBJ: Openness is one thing
that you’ve stressed, even outside of our conversation here. Why is that so important for the franchise?


Simon: Because the franchise
belongs to the fans and the city and doesn’t belong to, you know, us alone. So we should have nothing
to hide. It should be an open situation to create more interest in the team.

IBJ: What is your confidence level that Larry Bird can make this team a winner?


Simon: Very high. Just
look in his eyes and you know that he’s not happy not being a winner. That’s his history, of being a
winner. That’s what he does. I think now that he’s fully in charge, we’re going to see that in coming years.

IBJ: Is it his experience
and track record that gives you confidence or is it your gut feeling about Larry Bird as a person?


Simon: Well, when you
spend time with him like I have, you see the fire in him and the knowledge and how he understands the
game and understands what it takes to win, which is really the key. There are a lot of very talented players, but it takes
more than just talent to win. He can impart that and he will be doing that.

IBJ: What do you think the community’s perception of the Pacers is right
now?

Simon:
You can tell me that better than I can tell you, but whatever it is, we want to improve it.

IBJ: I’m sure you know about the negative feelings. Do you think those feelings
are justifiable?

Simon: Feelings are feelings. If [people] feel that way, they have reasons to feel that way and we have to
understand that and correct [that].

IBJ: How would you like the community to feel about the Indiana Pacers?

Simon: Well, I’d just
like to get back to–the year 2000 is a good year for me–when we were dancing in the streets and the
years that we had built up that loyalty [during the] last part of the decade, or century, I guess it was, right? I mean it
was just a good feeling in the city all around. People were very excited about the team, very interested, and it was exciting
to be there, and it will be exciting again.

IBJ: It seems like there are two schools of thought on the fan following: One is that winning, alone,
will bring people back. The other is that it’s a combination of winning and winning the right way. What
do you think?

Simon:
Well, you can see some teams, like Boston … you should see the fans when they start winning. New Orleans, I can go
on and on. All these teams that have done well recently, the fans seem to come back. But, you know, Indiana is a little different.
I think they’ll come out and see us as we’re rebuilding, and if we give them good Hoosier basketball, I think they’ll come
back.

IBJ: How
has the success of the Indianapolis Colts affected the Pacers?

Simon: Not at all. We’re just proud to be part of a city that has the world champion
football team. So we’re very, very pleased with that.

IBJ: Do you think Indianapolis is big enough to support two professional
sports franchises?


Simon: Oh, I think so, yes.

IBJ: How are season-ticket sales going right now?


Simon: They’re coming on. I bumped into a couple of our players today. They
said there is more talk this year than there has been in the last couple of years on the street. Sales
are picking up, and we’re looking forward to having a better year than we had last year.

IBJ: How are sales of club
seats, suites and sponsorships?


Simon: Same thing.

IBJ: Stronger? Looking stronger?

Simon: We don’t have any final figures. They’re doing better. That’s the next
meeting I’m having.

IBJ: Forbes magazine published that the Pacers lost
$1.3 million last year on $107 million in revenue. Are those figures correct?


Simon: They’re absolutely not correct.

IBJ:
And what’s wrong with those figures?

Simon: Well, first of all, both numbers are wrong. That’s the bottom-line answer.

IBJ: I assume they’re a
low estimate on the loss, and high on the revenue figure?

Simon: Right. That would be the way to summarize it.

IBJ: Do you feel like the Pacers
can return to profitability on their own?

Simon: We face the challenge of a small market. We always will. But we’ve been profitable
before and we hope to be profitable again.

IBJ: Have you guys talked to Mayor Ballard or any other city official about
getting financial help from the city at any point?

Simon: Well, not me personally. I’ve had one meeting with the mayor to introduce
ourselves, and our people have been talking to [the city] about various ways to work together, but nothing
specific.

IBJ:
Have you identified the next generation of ownership of the team?


Simon: Are you getting rid of me already?

IBJ: No, no, no. You look in perfectly good health, quite honestly.

Simon: OK. We just want
to keep it in the family, and that’s all I can say right now. I’m prepared to dedicate myself to turning
this ship around, and I plan to be here for a while.

IBJ: What’s your brother Mel’s role in the team right now?


Simon: He’s always preferred
to be in the background, and he’s always let me take all the arrows on this.

IBJ: Is there a possibility that Larry Bird could take an ownership stake
or interest in the team?

Simon: It’s nothing that’s ever been discussed, but certainly things could happen. But I mean that is not
what Larry has asked about or wants or we’ve talked about. Right now, he wants to build up the best basketball
organization he can, and he’s doing it.

IBJ: Given your almost day-to-day involvement in the team and Mel’s role
as, essentially, a silent partner, have you considered buying him out?


Simon: Why would that be a question? What does that have to do with?

IBJ: Well, I think it speaks
to the … future ownership.

Simon: The ownership is the Simon family. We’re all the Simon family. If I own 99 percent and he owns 1 percent,
does it really matter? Or vice versa? The Simons have been in this business for 25 years, and I told
you that the Simons will still be involved. For me to get involved in percentage ownerships is really
… . It’s almost not germane to this discussion, but I respect you for bringing it up. Do you respect
my answer?

IBJ:
Sure. Your answer is your answer. I respect that. Do you envision any scenario under which the Pacers would relocate
to another market?


Simon: Well, there is no thought, plan or concept at this time that would provide for that. I feel, within
whatever power I have, that the reason I’ve really taken back my involvement in this team is because
I want to keep it in the city, and it was going in the direction where it was almost impossible to have
it here. So I’m here in this room to make sure that this team becomes viable so that we can stay in this
city forever. That’s my task. That’s my challenge, and that’s what I’m here to do.

IBJ: What about The Indiana
Fever? Why is that team important to you?

Simon: Because it’s another wonderful asset for this city, to have these wonderful
women who are really quality people playing a fundamentally fabulous game of basketball. A couple of
things I tried to start when I took over–one is talking about the Fever as much as I talk about the
Pacers. The Fever are important to the city, are important to us, and we need to get a little more fan
response in this area also.

IBJ: As I understand, the attendance is up 30-some percent.


Simon: That’s right.

IBJ: And the league average is up 2.7 percent.

Simon: That’s right. We’ve made
a commitment. One, my commitment was to stop the negativity. Two, to reorganize, to be responsible to
our fans and our players and our people who work here. And three, to let everybody know what a wonderful asset the Fever
are.

IBJ:
Why do you think fans were slow to recognize the entertainment the Fever provide?

Simon: That’s a good question. I’m going to find out. I don’t know why. If you
ever watch that game, it’s an exciting game. They’re good players, very fundamentally sound, good family
experience. [And] we’re still voted one of the best arenas in the world to watch basketball.