Fischer disputes study critical of NBA in Louisville, report funded by 'friends of the mayor'

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by Joe Arnold

WHAS11.com

Posted on November 14, 2012 at 7:02 PM

Updated Wednesday, Nov 14 at 7:21 PM

LOUISVILLE, Ky (WHAS11) -- Louisville Mayor Greg Fischer said Wednesday that he wants the city to partner with Greater Louisville Inc on a economic impact study of an NBA team in Louisville.

Fischer spoke to WHAS11 after a study commissioned by several unnamed local business leaders concluded that the costs of landing an NBA team far outweigh the economic benefits in Louisville.

"The people who did this study are friends of the mayor," said Bob Gunnell, a spokesman for the study's backer, "and are supporters of the mayor and have been, and came to him with the intent to consider this, to work together."

"This is about bigger visions for the city, right? About what kind of city can we become?" Fischer said.  "If an NBA team is part of that or any professional sports, I think that's great.  But the important thing is that we take a look at data objectively. We start with a neutral platform. We come together with a fully professional study and then we share that with the community."

Fischer said a study conducted by Cambridge Economic Research and revealed by WHAS11 Tuesday night appears to be biased.

"It certainly doesn't appear to be (objective) when you read it," Fischer said.  "So I think it's important that we get good data and let the data talk to us."

"They gave an honest answer to an honest question and that is - what are the economics of an NBA team?" Gunnell said.

Margaret Collins, the study's author, also insisted she was not commissioned to reach an anti-NBA conclusion.

"They asked me for my unbiased opinion on this and that's what I've given them," Collins said.

"This is quite a credible study," Collins said.  "It is definitely data driven as you'll see if you look at all the data.  We have built a model based on data from the Federal Reserve Bank based on the net economic effect, not the gross impact."

The Cambridge Economic Research report says Louisville would face stiff front end charges to land an NBA team and multi-million dollar renovations at the KFC Yum Center to keep one here.  And the report generally disapproves of taxpayer funded subsidies for professional sports teams because it says there is no evidence that pro teams have a measurable economic impact on host cities.

"Louisville is recovering from recession. It's in pretty good shape," Collins said in an interview with WHAS11.  "It's had its bond rating recently raised by Moody's to AA1 which is the second highest bond rating achievable.  If you look at cities of similar sizes that have NBA teams and professional sports teams, St. Louis, Memphis, New Orleans, Sacramento, their bond ratings are much, much lower, meaning their costs of borrowing are higher and fiscally it's just not sustainable."

"For a city of limited resources to spend hundreds of millions of dollars a year to attract and retain, the retention costs, the facilities costs,
are enormous for cities," Collins continued.

Gunnell was asked if Cambridge Economic Research was chosen to conduct the study because of its position on such spending.

"Absolutely not," Gunnell replied. "This firm was chosen based on their history of major sports franchises in major cities, the Tennessee Titans and in Philadelphia and in Boston for other sports franchises."

Gunnell acknowledged that he has made financial contributions to University of Louisville Athletics, but is not a "major" donor.  His clients who funded the study are concerned that U of L athletics could be harmed by the NBA,  Gunnell said.

"We need to embrace the tenant that we have which is U of L athletics at the Yum Center," Gunnell said.

And Gunnell echoed the report's finding that a city's support of a professional sports franchise diverts resources from other areas.

"An NBA team doesn't increase our tax base.  We should go after companies that they're going to bring in thousands of jobs to this city," Gunnell said.

Collins said other cities have used "promotional" studies that artificially inflate the value of a pro sports team to a community's economy.

"We've found that the true impact are more like one percent of the exaggerated impacts," Collins said.  "Which are spent money that would be spent elsewhere in the Metro area."

Fischer reiterated that his office is "not working on any specific team" but wants to be in a "position to win" if the situation presents itself.

The mayor was asked if he thought that the study was commissioned because talk of the NBA in Louisville is gaining traction.

"I can tell you there's obviously tremendous interest in professional sports in our city," Fischer replied.  "If it's an NBA team, we're hearing that buzz all throughout the city.  What's also important is, if that was to happen someday, the University of Louisville needs to have a win in this."

"I've been very emphatic in stating that," the mayor continued.  "I'm a huge U of L fan, big University supporter and I understand they have to win as well. I think the city is big enough for all of us."

"There are a lot of things here that can't be measured in dollars and cents but are more towards the aspirations, the image of what kind of city that we can be," Fischer said.
 

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