Detroit to get diddly-squat in revenues from new Red Wings arena

This isn’t exactly news since it’s been reported for almost three years now, but it’s still rather bracing to see an article headlined: “Ilitches to get all revenues from new Red Wings arena.” As the Lansing State Journal (UPDATE: reprinted from the Detroit Free Press, it turns out) goes on to spell out:

Under a new deal hashed out between representatives of the team’s owners, Mike and Marian Ilitch, and state and local development authorities, the Red Wings will no longer have to share 10 percent of ticket proceeds, 7 percent of suite sales, 10 percent of food and beverage concessions, 5 percent of souvenir sales and other revenue from parking. All of that money — estimated to be about $7 million annually — would belong to the Ilitches’ Olympia Development of Michigan when the team moves north of downtown into a proposed $450-million arena.

Now, that $7 million a year wouldn’t necessarily continue even if Detroit didn’t build a new arena — they’d have to agree on a new lease with the Red Wings owners for Joe Louis Arena, and I’m guessing the Ilitches would balk at continuing to share revenues with the city as it did in its old lease. (Detroit could always then say, “Fine, go play on the Detroit River,” but that’s another debate.) Still, it’s nice to see a newspaper recognizing that a proper analysis of an arena deal includes not just the public-private split of the costs (less than half public, according to the Ilitches; about two-thirds public, according to actually counting), but the split of the revenues as well, which here amounts to two halves Ilitch, no halves public.

Most of the cost is being paid by the state of Michigan — or, more to the point, with city money that the state won’t let it use for anything else — so if you want to take a really rosy view, you can say that this is a way for the state to finally invest in Detroit instead of just telling the city what it’s not allowed to spend on. Though here “invest in Detroit” really just means “give a bunch of tax money to a local developer.” But, same difference, right?


3 comments on “Detroit to get diddly-squat in revenues from new Red Wings arena

  1. UNbelievable…OK, not unbelievable. more like COMPLETELY believable, and generally the way stadium deals are now done…but in the case of Detroit, a city in BANKRUPTCY, I can’t believe the proverbial “villagers” aren’t storming the government buildings with their pitchforks and torches,” after hearing how their government, that is supposed to represent the best interests of ALL, essentially screwed the majority for the benefit of one…

  2. Man! That must have been one tough negotiation!

    “we’d like you to share some revenue with us since we are paying for everything and you aren’t paying for anything at all, really, except things you get all the revenue from”.

    “No”.

    “ok then, where do we sign”?

  3. The city has just gone through a humiliating bankruptcy that has made it an international laughingstock and shredded what little reputation it had. Pensioners are going to lose out badly, public services barely exist, and for even such basic civic functions as new police cars the city had to depend on charity; they were donated by local businessmen. The schools are perhaps the worst in the country and except for a few patches of development the ruin of most of the city continues apace.

    And the city’s leaders have learned nothing, nothing, nothing.

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