Call Center Company in Indianapolis, IN

Shai Gilgeous-Alexander and Tyrese Haliburton still hand the NBA Finals star potential, and shifting viewer behavior makes judging the value of the markets in these Finals more nuanced.

Indianapolis Star

OKLAHOMA CITY – Big stars. Small markets.

That’s been the verdict on these NBA Finals since the Pacers closed out the Eastern Conference playoffs over the weekend and sealed their place opposite Oklahoma City in this year’s NBA Finals.

And in the most basic telling, that is an accurate summation of the forthcoming series. But the public’s (and the media’s) love of easily digestible Nielsen ratings and viewership numbers glosses over what is in many ways a more nuanced discussion.

Will Indianapolis and Oklahoma City make for a less commercially successful Finals? Not necessarily.

Yes, Oklahoma City is 47th TV market and Indianapolis is 25th.

It’s important to acknowledge upfront there is some truth to the basic maxims of the TV-market discussion. In most cases, yes, pulling a major audience share like New York, Chicago, Boston, Los Angeles or even Dallas-Fort Worth makes for a better-watched series.

That just doesn’t paint a full picture, according to Patrick Crakes, a former senior vice president at Fox Sports who now runs his own media consulting firm.

“The NBA Finals is a national event. It’s better to have a base from big-market teams, from a mass of viewing, but the whole ecosystem is much more complicated than that,” Crakes said.

Think of a television distribution deal as an ecosystem serving three key constituencies: The league (the rights seller), the carriers (Turner Sports, ESPN, etc.) and the distributors (Comcast, DirecTV, YouTube TV, etc.). Those constituencies are concerned with their own self-interests, yes, but in many cases, those interests overlap or align.

These deals are also negotiated as large packages, with inventory (games) from the regular and postseasons all bundled together. ESPN/ABC did not secure the rights solely to these Finals. The money culled from the Finals is just a portion of the overall measure of the commercial success of the deal in a fiscal year.

Per Crakes, advertising often constitutes approximately 20-30% of the overall financial pie, a meaningful number but not a decisive one. And much of that income that’s attached to the playoffs is derived not from the showpiece Finals, but from the early rounds, where TV partners broadcast the largest sheer quantity of games. Yes, bigger markets in later rounds makes a difference, but sometimes not as much of one as a busy, engaging start to the postseason.

Good, long series in rounds one and two will fill the advertising-dollars bucket long before the Finals. Short, uncompelling sweeps can leave a hole no big-city viewership or last-minute dramatics will fill.

“Postseason economics, a lot of it gets determined by the first couple rounds. That’s where all the inventory is,” Crakes said.

'This is the league’s future here'

There are also headwinds untethered to a market share, or an individual sport’s popularity.

The rapidly fragmenting viewer ecosystem has prompted small dips in ratings for even America’s most popular sports.

Consumers no longer need easier-to-quantify access points to live sports like traditional carriers (Comcast, DirecTV, and so forth), with cord cutters eating into wider TV share. More fans come to games via social media, be it through highlights, real-time updates or other links back to the games themselves.

There is an extent to which these Finals will be impacted by shifting viewer habits no matter the markets involved, whether it’s No. 1 New York, No. 25 Indianapolis or No. 47 Oklahoma City (per SportsMediaWatch).

Which circles back to one of Crakes’ basic points: The Finals can also appeal across a wider base irrespective of market size.

“If you think about a total package of how NBA rights work,” Crakes said, “it’s important to keep in mind that small-market finals, like what we’re about to see, that feature some of the game’s best young players, that are going to be around for the next 15 years, being showcased, is not a bad thing for the league.”

Shai Gilgeous-Alexander’s star turn this season has included a scoring title, his first-career MVP nod and a center-stage role for the winningest team in the NBA.

There has been perhaps no more compelling individual storyline in these playoffs — certainly in the Eastern Conference — than Pacers star Tyrese Haliburton’s ascension into the elite tier of the league’s guards.

Around them orbit meaningful subplots (Jalen Williams’ remarkable year, Pascal Siakam’s impact in Indy, the dynamism presented by Indiana’s backcourt depth, Chet Holmgren’s continued development).

The sport by nature puts fewer players on the floor, offering a bright spotlight to its stars. And unlike in football or baseball, those stars are often involved in games for long stretches, unfettered by offense-defense swaps or at-bat limits.

In many ways it’s easier to sell stars in the NBA, so long as they deliver their best. Whether the uniforms they wear say New York, Indiana or OKC, compelling performances from those players will go a long way toward determining the commercial success of the series upcoming.

“This is the league’s future here,” Crakes said. “The Thunder are fantastic. If the Pacers give them a series, my guess is everybody gets interested, even in New York and L.A., and it carries along just fine.”

These are two of NBA's best teams. That matters.

Which leads into the most fundamental determining factor in this discussion: The series has to entertain.

Crakes worked at Fox Sports in October 2000, when the Yankees and Mets delivered their famed “Subway Series." Top to bottom, the company was energized by the prospect of capturing a compelling championship dominating the country’s biggest market.

Instead, despite the fact that every game was decided by one or two runs, national interest never materialized. The favored Yankees eased to a 4-1 series win in front of a national audience that delivered what was at that time the lowest-rated World Series in history.

“The thing was a giant dud, because the rest of the America (wasn’t interested),” Crakes said. “You can be the dog that caught the car when you wish for these things.”

Which means, of course, the same can be said in the opposite direction.

Oklahoma City and Indiana have been, across the season’s final months, arguably the two best teams in the NBA. Their records since Jan. 1 are first (Thunder) and fourth (Pacers) in the NBA.

The Thunder finished with the league’s best record and, while Indiana’s path might have been smoothed slightly by Boston’s bow-out, by almost any measure the Pacers have been playing championship-level basketball for five months.

If that continues in this series — if Indiana can stand toe-to-toe with Oklahoma City and turn this into a six- or seven-game series — it will drive viewership everywhere. Likewise, an uneventful series decided in five games or fewer wouldn’t do well, regardless.

“The real component in how successful something like this is, is a seven-game series,” Crakes said. “That’s where the gold is. Game 6, Game 7, and if we get to that with this series, this Finals will do just fine.”

'The system is working'

Of course, there’s an extent to which the Finals will own the airwaves anyway.

With football in hibernation, and baseball entering its summer dog days, the NBA Finals are virtually always a ratings winner.

Crakes pointed out there can be long-term benefits for the league in small-market success. The last decade has seen Cleveland, Toronto, Denver and Milwaukee all win the NBA championship, strengthening the league’s exposure in those markets and suggesting efforts to even the playing field between big- and small-market teams are paying dividends.

“The system’s working. The small-market teams are figuring out ways to compete with the big-market teams,” Crakes said. “This is an opportunity for these smaller markets to continue to have a deeper relationship with the NBA.”

As with so much in sports, the impact of this series will be determined foremost by what the NBA makes of it. Does Oklahoma City complete a season of dominance? Do the league’s two best teams at this time of year deliver a compelling Finals? Does this mark the transcendent moment for one of the NBA’s young stars?

All those things can, in the long term, matter as much as raw viewer data. The tendency to compare across years is reflexive. The sport’s ownership of the national stage at this point in the annual calendar, though, is undeniable.

“This is going to be a gigantic number,” Crakes said. “It’s going to rate better than anything else, probably anything else at this point in the summer, and the economics are already largely in the bank.”

From the outside, 220 N. Meridian looks almost the same today as in 1974 when the building opened. Inside, however, it’s a different story.

Historic photos of the former AT&T building show offices filled with stacks of papers and filing cabinets. Bright orange cafeteria chairs speak to a different time, when workers fueled the downtown economy with energy.

A small fraction of AT&T employees still work in the building on the top three floors, but they will officially move out this summer, marking the end of a 51-year chapter. The move will allow the Keystone Group to finish a $110 million redevelopment project it started in 2020 after buying the building two years prior.

Now, the building features high-end apartments, along with an 11^th-floor outdoor pool deck and three-story indoor parking garage.

The story of 220 N. Meridian, the first project in central Indiana to convert offices into residences, represents a larger shift in how developers today view properties in downtown Indianapolis and across the country. Adaptive reuse projects, or building conversions, are becoming increasingly more popular as demand for urban office space and apartments flip-flops.

This year, Indianapolis looks to gain an additional nearly 600 apartments in former office buildings, including:

Office-to-apartment conversions are picking up steam nationwide as the commercial office market lags and people rent for longer. In the Indianapolis metro area, millennials are flocking to downtown, increasing the demand for housing there.

These conversion projects aim to capitalize on that.

“It’s important to make sure we have a strong city core, not just for the city of Indianapolis, but this is the state capital,” said Ersal Ozdemir, Keystone Group founder. “So we feel like it’s important to continue to have a focus and invest in our core.”

Across the country, about 70,000 apartment units are in the pipeline to be converted from desk to living space this year — representing almost 42% of adaptive reuse projects, according to a data report published in February by RentCafe, an apartment research firm website. The rise in adaptive reuse projects began a few years before the pandemic as developers began to look at existing vacant office space rather than empty land for new homes.

Since 2010, housing supply has fallen short of fulfilling demand, and in 2018, large investment firms saw the opportunity to add rental properties to their portfolios, said Doug Ressler, manager of business intelligence at commercial real estate research firm Yardi Matrix based in Phoenix. In downtown Indianapolis, developers were seeking to take advantage of empty historic buildings.

“It was already happening, but then the pandemic accelerated it,” said Bill Browne, president of the Indianapolis Historic Preservation Commission and part of the design team for the Bottleworks District renovation.

Long interested in historic preservation, Keystone converted a building at 141 S. Meridian St. into condominiums more than 20 years ago. More recently, Keystone renovated the company’s office headquarters on Pennsylvania Street and converted the Illinois Building into the InterContinental Hotel, whose doors opened last month.

The 220 project “felt like the next step in creating a strong urban core,” Ozdemir said.

What makes a good office-to-apartment conversion

Market conditions – including high interest rates, increasing construction costs and low asking prices for office buildings – are also pushing developers to consider more adaptive reuse projects. In today's economy, retrofitting old buildings can be more cost effective than constructing new ones.

Like most development projects, the right fit for a building's use depends on the individual property. However, with apartment conversions, several factors are seen as necessary.

“Not every building is fit for adaptive reuse. If it’s bigger than 50,000 square feet, a wide property, where the stairwells are located, where the windows are lined — they all play a role and it depends building to building,” said Rachel Patten, a Colliers senior associate in Indianapolis.

The building must have a floor plan adaptable to residential units, easy access points, a good location and preferably, options for parking, developers and commercial real estate experts say.

“Older buildings sometimes represent a better adaptability because they have high ceilings and good floor plans," Ressler said.

After looking for an apartment conversion building for some time, Holladay Properties, a South-Bend developer, recently announced a project to convert the 12-story building at 130 E. Washington St. into as many as 180 apartments. The $40 million price tag to redevelop the site, which will be called Pembroke Place, is far less than a new build would cost, said vice president of development Jordan Corbin.

Federal historic tax credits and a $4.2 million 10-year tax abatement from the city further cemented the project as a financial fit for Holladay.

“What we can buy that building for compared to what you can build it for is very attractive, and there’s all of those incentives. We wouldn’t even come close to making a ground-up development work without all these incentives,” Corbin said. “Development always comes back to the numbers.”

What’s next for the downtown market

As residential space becomes more limited downtown and office buildings empty, adaptive reuse projects may become more common and financially sound undertakings for developers. Roughly 13% — or 13.9 million square feet — of Indianapolis office space is suitable for conversion, according to Yardi Matrix data.

City officials do all they can to financially support adaptive reuse projects. For the three largest conversion projects underway, the Department of Metropolitan Development committed at least $35 million in tax savings and incentives.

Bringing more housing downtown is a priority for the city under the Downtown Resiliency plan, said department director Megan Vukusich.

The incentives typically require a certain number of units to be earmarked as affordable or workforce housing and can include public art requirements as well.

At the Gold Building on Ohio Street, an $185 million office-to-apartment conversion is part of a block-wide redevelopment of the City Market Plaza, a former center for foot traffic downtown.

The city can use land as another incentive for developers to take over dilapidated or underutilized properties, Vukusich said. On the east end of downtown, the city leveraged its ownership of the Cole Motor campus to strike a deal with 1820 Ventures, offering to sell the real estate developer the land in return for a planned 200-unit apartment project.

Such projects take some heat off the commercial real estate market, which has been struggling with high vacancy rates since the pandemic. In a recent report, JLL reported an increase in office occupancy for the first time since 2018 in part because of a drop in market supply.

“We hope we are doing our part by taking these older office buildings off the market,” Corbin said.

Looking around Indianapolis, Browne said he can think of a few strong candidates for full or partial apartment conversions, like the OneAmerica tower that already has separate elevator banks or the Regions tower, which went into foreclosure last year.

Ultimately, partially empty buildings aren’t particularly attractive to anyone, he said.

“It’s better to do something rather than nothing,” Browne said. “And I think there’s enough understanding that the office market will not come back like we thought.”