Rumors have been flying around Detroit for years now that Detroit Red Wings owner Mike Ilitch wants to build a new hockey arena behind his Fox Theatre. According to sources, the Ilitches have been amassing property in the area for the past decade.
Forbes Magazine recently reported that the Red Wings are the fourth most valuable NHL franchise, valued at $303 million. “Next year the Red Wings have to decide if they want to extend their lease on Joe Louis Arena,” Forbes reported, “which is extremely lucrative for the team because it allows ownership to run the arena, nearby Cobo Arena, and the parking garage for both facilities for just $450,000 a year.”
The fact that their lease is expiring and that the city is trying desperately to expand the Cobo convention center to accomodate the annual Auto Show could make the move more likely. However, the Ilitches will likely seek massive government subsidies for a new arena project and local coffers are currently empty.
The number one team in terms of net worth are the Wings’ rivals, the Toronto Maple Leafs, valued at $448 million. The Leafs’ gate receipts were $78 million compared to the Red Wings’ $54 million.
If I were a betting man, I would put my money on the assumption that the blue prints for a new Red Wings arena have already been drawn up and that the Ilitches are simply waiting for the right political opportunity to strike. The plan will be sold as “economic development” for Detroit and the Ilitches will be praised for their “civic pride” and commitment to the city. Any budget shortfalls will be supplemented by revenues from the Ilitch’s Motor City Casino.
There will not be much resistence this time around compared to the move out of Tiger Stadium. The question is whether or not the Red Wings will be able to raise ticket prices at a new arena in a weak economy to an even higher level than they are now at The Joe.