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August 16, 2010
Today in Pistons-to-Ilitch rumors
There's very little solid information, but today's Crain's Detroit Business is just jam-packed with speculation on the potential sale of the Detroit Pistons to Tigers and Red Wings owner Mike Ilitch:
- Crain's Bill Shea reports that Pistons owner Karen Davidson is seeking $500 million for the team and the Palace of Auburn Hills arena, but cites industry experts as saying she likely won't get more than $400 million, especially if she wants to conclude a sale fast.
- Shea also has a list of the rumored bidders, including Magic Johnson and an unnamed group from Dubai.
Finally, and most noteworthy for our purposes here, University of Michigan sports economist Rod Fort tells Shea that he expects Ilitch has a financing plan for both the purchase and construction of a new downtown arena. He also expects it will include public subsidies:
"It would behoove the Ilitches, if they obtain the Palace, to already be talking to Detroit city government on the subsidy that's going to be (sought)," he said.
A facility for both the Red Wings and Pistons is believed to be what the Ilitches want, a venue that is expected to cost about $300 million or more.
"If that's the ultimate goal, we should expect the Ilitches to behave as others have in the past in that situation, which is to suggest to city and possibly state government that a subsidy is needed to make this happen," Fort said.
Fort believes Detroit can be creative enough to help finance a new arena, through a special assessment like the tourist tax, or something else.
"It's not a place without resources," he said.
Of course, all Fort is really saying is "Ilitch will probably ask for a subsidy, because they all do." But on a slow news day, speculation is all we've got.
"Fort believes Detroit can be creative enough to help finance a new arena, through a special assessment like the tourist tax, or something else."
Detroit has tourists?
Posted by Brian on August 16, 2010 12:12 PM
Brian:
The mind boggles, doesn't it? If you were to tax all 'downtown' arena attendees, and inhabitants of the area around the arena, you have to ask just what would you be getting 0.5% of???
Just a question, but wouldn't the Palace be a far better place for the Wings to be (higher income area, by far) than downtown? I think we all know about their history in DTD, but it sure looks like the people that live within reach can't afford tickets anymore.
Neil: Is Fort serious? The lowly GS Warriors just sold for $450M, and he thinks the Pistons and the Palace together will sell for less?
Posted by John Bladen on August 16, 2010 04:44 PM
I would think that the Palace would be a far better fit, um, demographically speaking for hockey.
There, I said it.
Posted by Brian on August 16, 2010 06:38 PM
Because people in the northern suburbs are ... missing more teeth?
Posted by Neil on August 16, 2010 07:21 PM
Hi All.
First of all, please read (John). What I said to Bill Shea in today's article was:
The Ilitches will see an “immense amount of return” if they buy Palace Sports, said Rodney Fort, a professor of sports management at the University of Michigan, because they will have the “market cornered on everything.”
“It will generate an even larger return than most people think about,” he said. “The profitability of what they do is going to go up compared with what it currently is. The big money seems to be in all the other entertainment events. Between Olympia and Palace, they got "em all.”
So mine is the dissenting voice on Forbes-type estimates below $500 million.
And (Brian) please if you're going to make your own comments about the source of possible governement contributions (if there even ever are any in this case), make your claims separate from mine?
I don't claim any justification for a move toward government contributions, only that it is common for supporters to argue this way.
Posted by Rodney Fort on August 17, 2010 10:53 AM
The Warriors sold for that price simply because of the market. That one is actually pretty easy to see: How many millionaires are there within 40 miles of downtown Oakland? I won't try to guess at a number, but I am willing to say, More than there are in downtown Detroit.
Also, for my last vacation, I had much to choose from: Hawaii, Mexico, Southern California, Northern California, Vegas... And Detroit.
Whenever I think Detroit, comparisons to Paris always spring to mind.
Er, probably not.
Posted by MikeM on August 17, 2010 07:02 PM
Rodney:
Sorry, the general tone of the article suggested that you might have been one of the experts Shea cited on the "$400M" range. It appears that is not so.
As to public subsidies, I don't see any comments from Brian (or anyone else) that "infringe" upon yours. It is still very much a free country (no thanks to the Cheney presidency...), so people are free to post their thoughts - well researched or otherwise. That is the very nature of this website. I'm afraid feedback is one of the crosses you'll have to bear, sir, if you want to be quoted in a public forum like this...
Posted by John Bladen on August 20, 2010 12:17 PM