Simons give Indianapolis’ MLS efforts a big boost, experts say

The Simon family’s involvement in the city’s effort to attract a Major League Soccer team might have been the worst-kept secret in Indianapolis.

But now that it’s official, insiders and sports business experts say the Simons—who are majority owners of the Indiana Pacers and Indiana Fever—could provide the credibility and at least some of the cash needed to get a deal done.

“Money talks, so if someone with no experience and no expertise [in sports] came to the table with enough money, I’m sure people would listen to them,” Bill Yates, a senior associate with Dallas-based The Sports Advisory Group, told IBJ. “But the fact that you’ve got a highly respected member of the sports community who is able to understand the mechanics of the industry and knows how to navigate situations such as this—that certainly lends credibility. How could it not, right?”

MLS officials appear to be listening. On Monday, Indianapolis Mayor Joe Hogsett hosted Commissioner Don Garber and other league officials in the city’s suite at an Indiana Pacers game where they were greeted by Pacers Sports & Entertainment CEO Mel Raines, former CEO Rick Fuson and Phil Bayt, an attorney representing the Simon family. Garber also met this week with Indiana Gov. Mike Braun and other business leaders.

The visit comes about 10 months after Hogsett announced that the city would pursue an MLS franchise—not with Ersal Ozdemir, the founder of the lower-league Indy Eleven soccer team, who had long worked to bring top-level soccer to Indianapolis, but with an unnamed investor group the mayor said was working actively with MLS.

At the time, the Mayor’s Office was in talks with longtime soccer executive Tom Glick to pull together a group of investors. Meanwhile, MLS told the city that Indianapolis would need a group with not only the financial wherewithal to pay a franchise fee and support a club but also a strong local presence.

Although Ozdemir, who had proposed building a soccer stadium at the former Diamond Chain manufacturing site downtown to support it, could provide the latter, the Hogsett administration broke off discussions with him and his development firm Keystone Group in favor of pursuing other site and investor options.

Enter the Simons and Pacers Sports & Entertainment.

Herb Simon, the 90-year-old chair and majority owner of PS&E, is worth $5.3 billion, according to Forbes. The entire Simon family is worth $11.6 billion, the publication estimates. Steven Rales, who owns a 20% stake in the Pacers, is worth $8.3 billion.

Speculation has put the Simons at the center of the mayor’s MLS efforts from the beginning—and land deals the family has made since Hogsett’s announcement last year have only bolstered the conjecture.

Until this week, the family and Pacers Sports & Entertainment had declined to confirm any direct involvement in the talks. But on Monday, Raines told IBJ the company (and by extension, the Simon family) has, indeed, been involved in the city’s push to land an MLS team.

“At the city’s request, we are part of conversations about Indianapolis’ pursuit of bringing a Major League Soccer team downtown,” Raines told IBJ on Monday.

“While these discussions are ongoing, we are committed to working with our elected leaders to explore this opportunity. As we have for decades, we will support the city and state to amplify our reputation as a world-class sports, event and entertainment destination.”

Raines and others within the Pacers organization have declined to elaborate on what the phrase “part of conversations” means.

But two sources familiar with the discussions told IBJ that either PS&E or the Simon family itself is expected to be a central investor in the soccer effort. The sources spoke on the condition of anonymity because they were not authorized to discuss the matter publicly.

Meanwhile, Glick is no longer involved in the local effort, according to three sources familiar with the matter. He could be brought back into the fold if the effort advances—likely in an executive role for a would-be team, sources told IBJ, but he was no longer needed at this stage of the negotiating process. Glick did not return a message from IBJ.

The Simons have been cooperating with the city’s effort to obtain land for a stadium the city wants to build a block east of Gainbridge Fieldhouse. The fieldhouse—where the Pacers and Fever play—is owned by the Capital Improvement Board of Marion County and managed by Pacers Sports & Entertainment.

The proposed stadium property is also adjacent to the Ascension St. Vincent Center, a PS&E-managed training facility and administrative building for the Pacers.

Regardless of what role the Pacers and the Simons play in the soccer effort, industry experts say the company’s confirmation of its involvement—paired with Garber’s visit to Indianapolis—is a good sign for the city’s chance of success.

“This identifies people of great stature who are very successful in both business and the sports industry, as supporting the effort,” said Marc Ganis, owner of Chicago-based sports agency Sportscorp Ltd. “I suspect it also gives MLS greater comfort that a family that has been so involved in local sports, and as successfully as they have been, is [part of] the effort.”

Making moves

Herb Simon now resides in California for a majority of the calendar year, although he maintains a home in Indianapolis and is a regular at Pacers games. He recently retired as chair emeritus of Indianapolis-based Simon Property Group, which he co-founded with his late brother, Mel. The publicly traded company owns more than 200 retail properties across the United States.

Herb Simon oversees the Pacers alongside his son, Stephen Simon, who runs a Silicon Valley-based private equity firm.

Over the past 10 months, a Simon affiliate has acquired at least three parcels key to the city’s preferred stadium site.

Just days after Hogsett announced the city’s MLS efforts, Simon-backed holding company 101 S. Alabama Development LLC acquired a 1,100-space surface parking lot adjacent to the St. Vincent Center. A Simon spokesman said then that PS&E had long been interested in acquiring the property.

The Simon holding company also acquired a nearby 80-space parking lot at 301 E. Washington St., which the city then agreed to purchase, and a parking lot at 355 E. Pearl St., which is the address city officials have cited for the proposed stadium.

Meanwhile, PS&E has announced that it will build a $78 million dedicated training complex for the Indiana Fever on a portion of the former Marion County Jail I property just west of the proposed soccer stadium site. The project is being developed through an interlocal agreement between PS&E, the city of Indianapolis and the Capital Improvement Board. Construction could begin as early as August.

Land deals and development are important parts of a potential MLS bid. Unlike teams in many other top-tier professional sports leagues, Major League Soccer clubs are not franchises and do not have individual ownership groups.

Instead, each team is owned by the league itself, which secures one or more investors to fund an expansion fee—which for Indianapolis could exceed $500 million—as well as contribute to stadium development and support team operations and other expenses.

The investor group will be responsible for submitting a formal expansion club bid to the league, which city officials have said they want to happen in the coming months.

This would not be the Simon family’s first foray into the world of professional soccer. From 2017 to 2020, the family owned Reno 1868 FC, which played in the USL Championship league, the same league the Indianapolis-based Indy Eleven plays in now. The Reno team ceased operations in late 2020 during the pandemic.

Matt Winkler, a sports business expert and instructor at American University in Washington, D.C., said he fully expects the Simon family’s experience with sports franchises and their deep pockets to be cited as integral parts of the city’s game plan to secure a team.

“That’s the best-case scenario, to have someone with the ‘favored-nation’ status to be identified as” playing a role, Winkler said. “This sounds like a great situation for Indianapolis.”

For his part, Hogsett said he is pleased to have Pacers Sports & Entertainment involved in the effort to attract an MLS club—whether through expansion or by luring an existing team from another city.

But he wouldn’t say how long the company has been working with the city on the MLS effort.

“I think that they have always taken an interest in whatever things that the city is doing,” Hogsett said. “I certainly made many people aware of my desire to take a leadership role in bringing an MLS franchise to the city, but it’s not just my decision. It’s the decision [left] to many people, and that’s why I’m appreciative of organizations like the Pacers at least lending support.”

Garber’s visit ‘calculated’

Sports business experts told IBJ the decision by MLS’ Garber to not only meet with local and state officials this week but also to make a public appearance at the Pacers game with Hogsett was meant to send a clear message: A top-tier soccer team could very well be in the cards for Indianapolis, and the city has a strong hand.

Ganis and Winkler both said it’s likely the commissioner has quietly visited or sent contingents to Indianapolis over the past several months for reconnaissance and meetings related to potential expansion. Glick, when he was involved, played a role in that effort.

Likewise, they said the city, MLS and other parties involved in the process (including PS&E) likely have held various calls and videoconferences to iron out more specifics, including a yet-undisclosed timeline for next steps and requirements for a stadium.

Ganis said Garber is “very calculated” in the way he conducts business, particularly during the MLS season. Over the weekend, the commissioner traveled to Atlanta to celebrate the start of the league’s 30th season, then to Los Angeles for the inaugural match for San Diego FC— the league’s 30th team. From there, he traveled to Indianapolis on Monday for a roughly 30-hour business trip.

“It’s highly unlikely that this is simply a fact-finding mission on Don’s part,” he said. “If this were a few years ago—when MLS was searching for cities that were interested—that might have been the case.”

In the days since Garber’s visit, state leaders have been more vocal in backing Indianapolis as an MLS landing spot.

On Tuesday, Braun said he feared the state would “regret it” if Indianapolis didn’t make a strong push to secure a club. The State Budget Committee must still approve the professional sports development area that would be the funding mechanism to pay for as much as 80% of the stadium.

“They’re starting to fill up, in terms of league capacity,” Braun said of MLS. “I think we ought to figure out how to accommodate it, because we’re a great sports town.”

Garber and Hogsett were joined in the city’s suite by a handful of other top MLS executives as well as several local leaders, including Indiana Sports Corp. President Patrick Talty, Visit Indy Executive Vice President Chris Gahl, Capital Improvement Board Executive Director Andy Mallon and City-County Council President Vop Osili.

U.S. Sen. Todd Young was also in attendance, as were Indiana University soccer coach Todd Yeagley and Braun’s chief of staff, Josh Kelley.

“The league is in a very different position today. MLS is now selecting rather than recruiting teams, and that makes the importance of Don’s visit very different,” Ganis said.

He said Garber’s presence in the city’s suite with Hogsett and a host of other key players was a signal to political and civic leaders as well as prospective investors.

“They wanted to be seen together,” Ganis said. “That’s a very serious thing.”•