For anyone wondering if the Detroit Pistons are really going to abandon their own arena in Auburn Hills and shack up with the Red Wings in downtown Detroit, looks like, yup, they sure are:
The Detroit Pistons will announce Tuesday that they’ll leave The Palace of Auburn Hills to join the Detroit Red Wings at Little Caesars Arena in downtown Detroit for the 2017-18 season, a source familiar with the negotiations told The Detroit News on Monday.
What all this means in terms of financial details between the Pistons and Red Wings owners, the fate of the Palace at Auburn Hills (razed for redevelopment? all-Disney-on-Ice schedule?), and whether any more public money will be involved, we have no clue as of yet — though Motor City Muckraker blogger Steve Neavling notes with alarm that Detroit’s Downtown Development Authority is going to be voting on something right before the Pistons announcement:
More news later today, I guess. Though given the way these things go, don’t be too surprised if we get a lot of renderings and not much in the way of financial details until later.
Steve Neavling is a left-wing lunatic blogger, I wouldn’t put much stock in anything he says. The arena is really secondary to this whole deal. Ilitch and Gores are going to absolutely dominate the sports and entertainment market in Detroit with this move. A combined broadcast rights deal is going to be very lucrative to say the least. Whatever Gores dumped into the Palace is going to seem like chump change. Hell, he bought the team for $300 million(including the arena) and the team is now worth over $800 million. Once they move downtown, that price will jump even higher. But the biggest winner in all of this is the city of Detroit. Not only do they get the Pistons back, but they didn’t spend a dime on this arena. The public money paying for this arena is coming from state bonds that will surely be paid off with ease now that there are two teams sharing the arena. Also, let’s not forget the city just doubled it’s payroll tax collection from 41 games to 82. When you consider how much athletes make now a days, it should be a good chunk of money.
Here’s some more on the deal from the Freep:
The entities will likely join forces and combine the concert businesses of Palace Sports & Entertainment and Olympia. PS&E is the umbrella organization over the Pistons, the Palace and other music venues.
A future area of cooperation could come in the merger of the media rights of the Tigers, Red Wings and Pistons, which could eventually materialize into a regional sports network similar to the New York-based YES Network. The Major League Soccer franchise Gores and Quicken Loans founder and CEO Dan Gilbert are expected to lure downtown would likely go under any TV agreement.
http://www.freep.com/story/sports/nb…rena/94215932/
Whole mess of things that need responding to there:
“A combined broadcast rights deal is going to be very lucrative to say the least.” There’s no reason they need to share an arena to share a broadcast rights deal, so not getting how that helps them here.
“The public money paying for this arena is coming from state bonds that will surely be paid off with ease now that there are two teams sharing the arena.” The state is putting in $284.5 million, so to pay that off, they’d need $20 million a year in new tax payments from the arena that they’re not already getting from Joe Louis and the Palace. At a 6% state sales tax rate, that will work out great so long as each and every Pistons and Red Wings fan increases his or her spending by $200 a game.
“Also, let’s not forget the city just doubled it’s payroll tax collection from 41 games to 82.” Doesn’t help the city much unless Pistons players move from the suburbs to the city just because the team did.
The Pistons and Red Wings partnering on a media package is fine (though could cost local cable subscribers in the end), and sharing an arena is fine enough too. But I do still want to see what the DDA ends up voting on today — hopefully it’s just lease language or somesuch, and not actual money.
Obviously you don’t know how income taxation works in the city of Detroit Sir. Regardless of where a person resides ANY and All hours spent working inside the City of Detroit are City taxed. My family has lived outside of the City since I was 9 years old ( I’m now 46) and EVERY job that my Parents or I have held in Detroit We have paid City taxes on. Thank you and have a great day
At half the city income tax rate (1.2% vs 2.4%).
The Palace of Auburn Hills is a nice building but in a horrible location. The suburban model just doesn’t work for the NHL, NBA and MLB. Would’ve worked for the Lions maybe but it’s an outdated business model for the other leagues.
More importantly, we’re not getting another arena in Detroit. I was worried about the possibility of another arena being built which would’ve been disastrous.
I’m sorry but it’s not the damn location and I’m sick of that being used as an excuse for why a perfectly good arena is going to be demolished after 30 years.
The Pistons never had a problem filling the place up when they had successful teams. Maybe Gores should focus on that instead.
It appears they solved the issue of how to make Pistons profitable as a second tenant. The Wings must be giving them a great deal in exchange for knocking the Palace down to eliminate competition, as all reports seem to indicate the Palace property being redeveloped.
And Oakland County at least was not foolish enough to buy the Palace.
I also wonder if the Pizza Dome has bought a scoreboard yet. If not maybe they could just move the one from the Palace down since it’s only a year or two old.
But that would involved reusing something, which doesn’t happen often in our throwaway culture.
I was going to mention the exact same thing. Move the Palace scoreboard to LCA then move the old Joe Louis Arena scoreboard to the Palace should they keep the place up and running.
I’ll be quite surprised if the Palace is still standing after this is done. I’m sure the Pistons said we need to be an equal partner. The Wings said fine, but the Palace has to go to eliminate competition.
Not going to happen. They’ve already announced it’s going to be sold and demolished. There really isn’t much use for a 22,000 seat arena with no primary NBA or NHL tenant.
@Neil
You’re right, you don’t need to share an arena to share a broadcast deal but I believe the thinking is that by creating a partnership of sorts, you’ve sown the seeds of goodwill between 2 groups that have traditionally been rivals for concerts and other events. As a result of the partnership, there’s trust and a better chance at working together on a broadcast deal.
Moving in together in order to “build trust” has always sounded to me like terrible relationship advice.
This pretty much sucks for most of the people The Palace employs.
It’s not like they are all just going to be moved wholesale into the new arena. I’m betting Ilitch is going to bring most of the employees from JLA over, which is going to make most Palace workers unnecessary.
But hey, it’ll be easier for people to go to a bar before a Pistons game now that it’s downtown. Sorry about losing your jobs and all.
Here in St. Louis a lot of the game day staff for Chaifetz (SLU’s arena), Busch Stadium, and Scottrade Center are the same people. I know a guy from high school who sells beer at all three.
Of course, if you live and work out by the Palace you’re screwed, just like the guy I talked to at Turner Field last summer who who have almost an impossible time getting to Cobb County Ballpark. (SunTrust isn’t paying me!)
I’m not sure but I would bet that’s not the case and Olympia S&E and Palace S&E each have their own staffs.
I guess it’s possible Gores negotiated he gets to use his own people, at least the ones who can make it to the new arena, for Pistons games.
I highly doubt it though. That would require compassion and concern for the little man, which is pretty much non existent in our society these days.