With Ilitch so invested in the city of Detroit, fans wouldn't have to worry about the teams moving. That's a definite plus. Yet, what if his empire starts to crumble? What if Little Caesars experiences some massive Enron-esque scandal? It's doubtful, I know... but possible. Ilitch would be forced to sell three friggin' teams! I also wonder how much one teams' finances could affect the other. If the Tigers free-fall in 2011, would Ilitch cut corners on bringing in high-priced talent for the Pistons?
That hasn't happened so far. Ilitch always capped-out the Wings while paying big bucks for Tiger players. I just wonder if the Pistons may tip the scales. While folks around here are fairly optimistic about the Ilitch purchase, I just can't get on-board the happy train. Monopolies scare me.
Ilitch never showed much interest in basketball in the past, but he said in August:
Marian and I grew up here, we raised our family here and we built our businesses here. Detroit is our home. When I read in the paper there was the chance that this great sports town could lose one of its professional sports franchises, I just didn't see how we could let that happen. The Pistons, just like the Red Wings, Tigers and the Lions, have a rich and storied tradition in this community and they've brought pride to fans and our community.Even if Ilitch may not love basketball (still just speculation), he does sound like an impassioned sportsfan and supporter of the city. That's what we would want most in an owner. We want the owner to burn with anger when the team loses. While he has many detractors, nobody can say Mark Cuban doesn't care about his Mavericks. He's their biggest fan, and you can see on his face how much the losses hurt. Maverick fans rest comfortably knowing their owner wants to win above anything else. Despite supporting the payroll for three teams, we'll have to hope Ilitch has the same desire.
From a business perspective, the deal does make sense. Ilitch would take on the entire Palace empire, which includes the lucrative Palace venue and DTE Energy Theater (formerly Pine Knob). DTE still packs 'em in the summer, and the Palace draws the top acts in the country. Those venues alone might be worth the purchase price. Furthermore, Tom Wilson now works for Mike Ilitch. Tom Wilson was the long-running president of the Palace. He helped guide the Pistons from middling franchise in the early 80s to the juggernaut of the early 90s. As much as anyone, he's responsible for the tremendous entertainment value that is the Palace of Auburn Hills. While many bemoaned its location, the Palace served as the template upon which other NBA-specific venues were built. And, despite the awful team it now houses, the Palace staff still find creative ways to engage fans ("Mason", dot-races, Spare Tires), and tickets are dirt cheap (4 tix for $44!). They're definitely trying. So, if Tom Wilson regains control of the Piston ship, I'd feel the team is in good hands.
With Joe Louis Arena on its last legs, most folks speculate the Pistons and Red Wings would soon share a new venue downtown. While that would make it easier for me to see games, I'm unsure how that would affect attendance. The Pistons have a ton of supporters in the Auburn Hills area. Would they all make the trek down to the D? Would folks from downriver don Big Ben jerseys and buy a ticket for the team downtown? My guess is that, if the team wins, fans will come in droves. If the team stays mired in lottery-ville, they'll be lucky to average 10k per game. I hope I'm wrong.
I think it's a very good thing. The more business Illitch owns, the less reliant the revenue stream is on any single business. The fear of Little Caesars failing having a collateral impact is minimized by the revenue generated by his other business holdings (e.g. the Tigers and Red Wings). I don't have any insight, but I'd venture to guess that the Wings are one of the most profitable franchises in the NHL. I don't have any concerns about the fiscal responsibility (and honestly, I doubt the NBA would have allowed the deal if they thought the Illitch's were over-leveraged).
ReplyDeleteNice post. A few points.
ReplyDeleteBecause of the Salary Cap in hockey, Ilitch will always be spend at/near the max. He hates the cap, and would spend another 20-30 million in salary if he could. So he certainly would not "cut costs" on the Wings to put money into the Tigers or Pistons. Nor would he need to cut costs on the Tigers or Pistons to put money into the Wings.
The NBA has a soft cap and luxury tax. Bill Davidson would spend to the cap, but imposed a tight budget and would not let Dumars go over the cap. Therefore, unless Ilitch drastically cuts salary, I don't expect the money spent on salary to change dramatically.
The big money at The Palace is the high ticket folks. The boxes, suites, and courtside tickets at NBA games (for winning teams or for teams with a superstar) are what determines profitability. The upper deck means jack squat to the finances. Therefore, the question for the Pistons is not going to be getting 20,000 seats. It's getting the most expensive 1,000 to 5,000 seats filled. So are these more likely to be purchased by businessmen in Bloomfield Hills and Rochester, with the Palace in their backyard, or by businessmen in Grosse Pointe and Detroit?
The thing I worry about regarding Ilitch as an owner, is that the NBA is all about personalities. In the MLB and NHL, you can invest money in farm teams, and scouting, and develop a team identity. In the NBA, development is nice, but it's really about getting a superstar and building around him. It's one thing to deal with a pouty Keith Primeau or Sergei Fedorov and play hardball with them, and to say that they aren't bigger than the team. It's a whole lot different dealing with that prima donna behavior in the NBA. I just hope Ilitch isn't challenged by a Zach Randolph or Allen Iverson situation early.
Sure high ticket folks matter...but they can't give even give away tickets. 11 people show up for 50 free season tickets. That's a bigger problem. I disagree...business men are gonna buy those suites no matter what because its what they do, take clients to games or whatever. Its everyone else. You can't fill those other 20K seats? You can't give away free season tickets?
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