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INDIANAPOLIS BUSINESS JOURNAL • JUNE 3-9, 2 0 1 3 . 3 A

NCAA overhauls bidding for championsiiips Process may fuel 'gold rush,' stiffen competition for My

By Anthony Schoettie [email protected]

The NCAA is overhauling its event bid- ding format, and in June will bid out 500 championship events to be played over the next four years.

It's the biggest one-time bid-letting— by far—in college sports history and

will have a major impact on not only the NCAA, but also bidding organiza- tions such as the Indiana Sports Corp. The bid will put championship events for almost every sport the NCAA governs up for grabs, including the 2019 men's and women's basketball Final Fours.

While the overhaul is meant to stream- line and consolidate the bid process, it is

also likely to draw more cities seeking to replicate Indianapolis' sports hosting suc- cess. The NCAA this year is unleashing an unprecedented marketing campaign to increase the number of bidders.

"The rest of the country is catching on to the strategy Indianapolis has employed, and this will only serve to accelerate that," said Larry DeGaris, director of academic sports marketing programs at the Univer- sity of Indianapolis.

NCAA officials say the process will

I 94

"You can go down the list, and it's a long one, of great players in this league ... playing against that competition can only make you better."

George Hill, Indiana Pacers

A SIZZLING SUMMER LEAGUE Six-week event has become big draw for NBA, college stars

Carlos Knox has attracted a bigger slate of stars to his summer league each year since its founding in 2009.

By Anthony Schoettie [email protected]

While many NBA players and fans are focused on the playoffs, and college players are still exhaling from final

exams, Carlos Knox is thinking about a tiny gym on the northwest side of downtown—and what role it will play in getting those players ready for next season.

It's the only place in town and one of few nation- wide where basketball fans can find top college and

professional hoops stars facing off against one another on the hardwood.

The Knox Indy Pro Am Summer League was

founded in 2009 and has attracted such players as Indiana Uni- versity's Vic-

tor Oladipo and Jordan Hulls and

NBA players rang- ing from Indiana Pacers

George Hill and Paul George to Butler University graduate and Utah

See PRO-AM page 35A

allow cities more lead time to plan events, and give strong host cities like India- napolis the opportunity to land multiyear hosting deals and to sell sponsorships and partnerships for all the events it hosts in a quadrennial span. Events held in the same city can also be better cross-marketed, they said.

The additional sponsorship and cross- promotional possibilities should open new revenue streams for the NCAA and

See NCAA page 30A

Sierra Club puts Harding coai piant in crosshairs Group fights for closure; IPL says pollution controls less costly for customers

By Kathleen McLaughirn [email protected]

The iconic smokestack of Indianapolis Power and Light's Harding Street Station sits about five miles from Monument Cir- cle, but it's at the dead center of a struggle over the future of coal-fired power plants.

The Sierra Club says shutting down Harding Street is the top Indiana pri- ority of its national Beyond Coal Cam- paign, which seeks to spotlight the envi- ronmental impact of coal-fired plants and pressure utilities into using alternative energy sources.

The environmental organization wants the Indiana Utility Regulatory

Kerwin Olson is executive director of Citizens Action Coalition.

Com- mission to block an IPL plan to spend $511 million on pollution controls at the 39-year-old Harding Street plant, plus a four-unit station in the southwestern Indi- ana town of Petersburg.

Many coal-fired utilities are opting against such investments and pulling old plants out of service. A recent survey from the Kansas-based engineering and con- sulting firm Black & Veatch found that retiring plants early was utilities' most

See HARDING STREET page 31A

Southern comfort Siblings dish up

down-home goodness.

38A

Stocks Skarbeck: You can own the Empire State Building. 25A

Lists Employee Benefits Services Rrms 20A

Hospitals 22A

People 12A Classifieds 26A

Not-for-Profit 26A Records 28A

3 0 A • JUNE 3-9, 2013 • INDIANAPOLIS BUSINESS JOURNAL

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NCAA Continued from page 3A

host cities, sports husiness experts said. Instead of requesting bids for its myriad

events on a year-to-year basis, the NCAA starting later this year will bid almost all its events out during a three-month win- dow every four years.

The first-ever mass bid-letting will open July 15 with the bid deadline Sept. 16. In December, host cities will learn what they've won.

"It's going to be a gold rush of sorts," said ISC CEO Allison Melangton.

The ISC plans to "put all hands on deck" for the mass bidding, Melangton said.

The NCAA for the first time this year is aggregating bid specifications for all its events online to help bidders better under- stand what it takes to win.

Making more money The new process "allows host cities to

realize economies and efficiencies and to build partnerships and even fan bases across events," said Jeff Jarnecke, NCAA associate director of championships and alliances.

For instance, Indianapolis could sign a deal with a hotelier or other corporate partners to be the sponsor and/or service provider for both a lacrosse and rowing event, both of which were held here this year.

This year's bidding will include sites for events through 2018, and for the 2019 men's and women's basketball Final Fours. It will include all postseason pre- liminary rounds and finals sites.

Mark Lewis, who was hired to replace Greg Shaheen as executive vice presi- dent of championships and alliances in April 2012, helped lead the bid overhaul initiative.

Lewis previously served as vice presi- dent of sponsorship at NBC and president and CEO of Olympic Properties of the U.S., a joint venture between the U.S. Olympic Committee and the Salt Lake Olympic Organizing Committee. He also worked in marketing for the 1996 Sum- mer Olympics in Atlanta. Those expe- riences, NCAA officials said, helped Lewis shape the overhaul.

The process makes a lot of sense from a sports marketing standpoint, said the Uni- versity of Indianapolis' DeGaris.

"Some of these smaller events might not have much sponsor value on their own, but the pooled assets could be quite attractive to a variety of potential cor- porate partners," DeGaris said. "And if a host city can demonstrate their abil- ity to build and carry an audience from one event to the next, that will really give them a powerful message to take to sponsors."

"The NCAA clearly wants to grow these events and to monetize them," he added.

Indy not scared The riches the new process might yield

also will increase competition for NCAA postseason and championship events, sports business experts said. Cities like Indianapolis, which has hosted five NCAA postseason events in the last two months alone, have a lot at stake.

Over the last five years, NCAA events have accounted for more than half of all

New game in town This month, the NCAA will roll out a new

bidding process. It will:

• Overhaul the bidding for 84 championships in the NCAA's top three divisions.

• Award championship events on four-year cycles, giving host sites more time to plan.

• Award nearly 500 host sites this year.

• Set sites through 2018, plus the 2019 men's basketball Final Four.

• Accept only electronic bids, including photo, graphics and video submissions.

• Allow host sites to sell sponsorships across all the NCAA post-season events it hosts in a four-year cycle.

• Include more marketing by the NCAA, to attract more potential host sites.

Time line June 10-15: NCAA unveils new bidding

process at the National Association of Collegiate Directors of Athletics convention in Orlando.

June 26-27: Symposium in Indianapolis for sites interested in hosting championships.

July 15: Bidding opens for 84 NCAA championships across top three divisions.

Sept 16: Bid deadline.

December: Site selections announced.

Source: NCAA

"We definitely

want to see more

bids and more

quality bids. But

we're not trying

to depart from

our current hosts."

Jeff Jarnecke, NCAA associate director of

championships and alliances

sporting events Indianapolis has hosted, Melangton said.

While Jarnecke acknowledged that the NCAA has launched an unprecedented marketing campaign to lure more sports commissions and cities as bidders than ever before, that doesn't mean former and current host cities will be left in the lurch.

"We're certainly pleased with the job [Indianapolis] has done," Jarnecke said, "and we're excited to see what strategy Indianapolis employs and what events they go after."

City officials might have to up their ante. And that could cost the ISC and Indianapolis more money and/or other resources.

"We definitely want to see more bids and more quality bids. But we're not try- ing to depart from our current hosts," Jar- necke said.

Gary Alexander, senior vice president for the Nashville Sports Commission and chairman of the National Asso- ciation of Sports Commissions, sees no downside.

"This allows all of the entities bidding to look at a long-range plan for events they'd like to host," he said, and allows hosts to ensure they don't take on too much at once.

See NCAA next page

INDIANAPOLIS BUSINESS JOURNAL • JUNE 3-9, 2013 • 3 1 A

HARDING STREET Continued from page 3A

common plan for dealing with air-quality regulations. Pollution controls was a close second, and switching to a different fuel was third.

Black & Veatch predicts that new mercury-emissions rules, plus ample sup- plies of cheap natural gas, will lead to the retirement of 62,000 megawatts of coal capacity by 2020. That's the equivalent of 97 Harding Street Stations.

IPL says it opted against retirement because making the pollution upgrades is the least-costly alternative for ratepayers. The utility is not yet required to lay out the specific impact on electric bills. But it says the upgrades, plus other environment- driven work, will cause bills to go up 2 percent to 3 percent a year from 2014 to 2017.

At the same time, the company has decided the best course for its Eagle Valley station in Martinsville is to tear it down and build a natural gas turbine. IPL would convert two smaller and older coal-fired units at Harding Street to natu- ral gas as part of the same $631 million project.

IPL hopes the IURC will rule on its Harding Street and Petersburg retrofit plan, announced last year, as early as this month. The company filed its request for the Eagle Valley natural gas project in April.

IPL is treating Harding Street and Eagle Valley differently because they're at different stages in life, IPL spokes- woman Brandie Davis-Handy said. The coal-fired units in Martinsville date from the 1950s, while the largest unit at Hard- ing Street was built in 1973.

"At the end of the day, even though we're saying, yes, natural gas is definitely more economical, coal in terms of price still is one of the best options for our cus- tomers," Davis-Handy said.

Another factor is the current level of pollution control. Eagle Valley and the two smaller Harding Street generators are "unscrubbed," while the Harding Street and Petersburg units slated for upgrades are equipped with technology that will help meet the new standards on mercury, the company told regulators.

Electric utilities across the country are making similar decisions on whether to close, convert or upgrade their aging

Billion-dollar changes Indianapolis Power and Light plans to use

a variety of methods to bring its coai-fired power plants into compliance with new mercury emissions regulations.

Upgrade • four units at Petersburg Station with

combined capacity of 1,715 megawatts

• largest of three units at Harding Street Station, 427 megawatts

Cost: $511 million

Rebuild/refuel • Retire six oil and coal-powered units at

Eagle Valley Station in Martinsville, 338 megawatts combined.

• Build at Eagle Valley new combined-cycle gas turbine, estimated at 550 megawatts to 725 megawatts.

• Convert two small units at Harding Street to natural gas, 200 megawatts combined.

Cost: $631 million

Source: company filings

coal-fired plants, said Charles Fishman, a stock analyst at Morningstar Inc. who fol- lows IPL's parent company, AES.

"In the case of Harding, it's probably a borderline decision, really driven by its location," he said. "That's not where you want to have a coal plant, in an urban area like that. You've still got to get the power to Indianapolis somehow."

Regulatory battles The Sierra Club Hoosier Chapter,

along with the Indianapolis-based rate- payer advocate Citizens Action Coali- tion, want the IURC to deny the retro- fits for Harding Street. They also want the cost of retrofitting two older units in Petersburg to fall on IPL's investors, not ratepayers, in the event they're shut down in the future.

The advocacy groups, which hired their own expert witness for the case, argue that IPL didn't adequately assess alternatives, including converting to natural gas, con- tracting for more renewable energy like wind and solar, or shutting down Harding Street and buying more electricity on the open market.

Citizens Action Coalition Executive Director Kerwin Olson said it doesn't make sense to spend money on Harding

NCAA Continued from previous page

The NCAA this spring has begun roll- ing out the bid process to uni- versity athletic directors and administrators, sports commis- sions, and convention and visitor bureaus.

Already, more than 200 repre- sentatives from potential host sites have RSVP'd for a June 26-27 seminar at the NCAA headquar- ters in Indianapolis that will explain the bid process. NCAA officials will meet with 350 poten- tial host organizations, Jarnecke said, before the bidding process opens.

Despite the specter of increased com- petition, Melangton remains confident

Melangton

Indianapolis will remain an NCAA host- ing powerhouse.

"We've been around a long time, longer than any other sports commission, and we have the base to do great events," she said.

"With the increased lead time this new process gives, we think we can produce even greater events for the NCAA."

Melangton thinks the process could actually give a busy city like Indianapolis an advantage.

"With all of our sporting events and conventions, we have a lot going on here," she said. "Indy's calendar is very busy, and more lead time simply allows us to coordinate better

with the hotels and venues we need for each event. This is really an ideal set-up for us."»

Environmental activists want IPL to retire Harding Street Station, rather than upgrade it to meet new mercury-emissions standards.

Street when future limits on carbon-diox- ide emissions could shut it down, anyway.

Carbon limits are still a big question mark, said Fishman, the Morningstar analyst. "The majority of public-service commissions across the country are not considering that now because it's such an unknown."

Other parties that scrutinized IPL's retrofit plan agreed with it. The Office of Utility Consumer Counselor, which is the state agency that represents ratepay- ers, and the group of industrial custom- ers have reached a settlement with IPL, which the regulators could adopt in their decision.

IPL says its $1.1 billion environmental compliance plan would reduce mercury emissions from all its power plants 80 percent.

That's not good enough for the Sierra Club. Even with air-pollution controls, coal-fired plants continue to produce mercury-laden coal ash, which can end up on the ground and in water, said Jodi Per- ras, Indiana representative for the Beyond Coal Campaign.

"If we lose, we're not going away," Per- ras said. "We want Harding Street retired."

The Sierra Club counts among its victo- ries a WE Energies coal-fired plant near downtown Milwaukee, which the com- pany is seeking to convert to natural gas.

WE Energies spokesman Brian Manthey said closing the Valley plant was not an

option because, like Harding Street, it sup- plies steam to downtown customers, and it ensures reliability on high-demand days.

WE in 2010 and 2011 built two new coal-fired power plants elsewhere in Wis- consin, which were planned when the price of natural gas was extremely vola- tile, Manthey said. "You want to have as much fuel diversity as possible."

IPL hasn't had to defend its base rates since 1995, but executives are girding for that level of regulatory scrutiny.

"With these expenditures, we're on the radar," CEO Ken Zagzebski said at a May 9 investor conference for IPL's parent, Virginia-based AES Corp.

In Indiana, utilities can recover the cost of items that are deemed beyond their control, such as fuel and environmental • upgrades, without having to lay out all their operating costs and prof jts as part of a full rate case.

IPL has told investors and regulators it will file a rate case to recover the full cost of the new plant at Eagle Valley. That filing is expected around the time Eagle Valley opens, possibly in 2017.

The environmental projects mark a "fundamental shift" in IPL's regulatory strategy, Zagzebski said at the investor conference. For the last decade, IPL has looked to "get along with the regulators as much as we can, stay out of the regulatory arena, and keep high margins as long as possible."»

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