Red Wings lease deal includes Detroit writing off $65m in unpaid cable fees

Hey, remember that $70 million in delinquent cable rights fees that Detroit Red Wings owner Mike Ilitch owed to the city of Detroit, and which he and the city were going to work out as part of a new arena deal? The Detroit News reports that the haggling has been resolved, and it’s not to the city’s advantage:

The city would receive $5.17 million from the owners of the Detroit Red Wings to “put to rest” unpaid cable rights revenues that were estimated to be as high as $50 million to $80 million under a new lease for Joe Louis Arena, according to a City Council report.

The cable TV revenues language of the lease was “deemed to be largely unenforceable” based on negotiations between Emergency Manager Kevyn Orr’s legal team, Jones Day, and lawyers for Olympia Entertainment, according to the analysis prepared by the council’s policy staff.

Basically, Orr decided that it would take a big messy lawsuit to get anything more than $5.17 million out of Ilitch — made more difficult by a six-year statute of limitations on seeking damages, and the city hasn’t bothered to seek collecting any of this money since 1980 — and decided that it wasn’t worth it, even though the city is bankrupt and cutting pension payments by 26% and it’s Orr’s job to find money under any seat cushion he can. Plus, the Red Wings are in the midst of building a new stadium that Orr’s boss really really wants, so best to just make this whole thing go away, don’t you think?

8 comments on “Red Wings lease deal includes Detroit writing off $65m in unpaid cable fees

  1. Let’s be reasonable. You certainly cannot expect Mike Illitch to settle up on the unpaid cable fees AND pay Miguel Cabrera $248 million for 8 years too!

  2. Frankly, Orr is right. As disappointing as it is to have to give up on that revenue, the likelihood is that the city could never recover much of the ‘missing’ (I think we know exactly where it is…) money anyway.

    If we want to be mad at someone for this, track down the endless chain of meathead city councillors and officials who let this debt fester for three decades plus and let them know exactly what you think of their “leadership”.

    I suppose from the city’s point of view, it’s also true that they can’t very well claim to be poverty stricken and in desperate need of that cash (which they absolutely ARE, of course) and simultaneously explain why it is they are gifting hundreds of millions to the guy they are suing to build a new arena.

    Stupid is as stupid does.

  3. I didn’t think the city was paying for the new arena, but the state of Michigan.

  4. Detriot’s money being spent by the State of Michigan. Is that like you go to work in the morning and your wife spends your earning on something. If it is well, that is easy to get along with.

  5. And the rich get richer on the backs of taxpayers who may never afford the use of the venues being built. It always pays to know someone at City Hall… as usual.

  6. Everything about this hockey tale perfectly embodies how Detroit went bankrupt, and is going to get even bankrupter in the future. But recovery will come for some, one billionaire at a time.