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Downtown Development Authority approves Ilitches’ plan for $450M Red Wings rink, $650M development

Updated 13x at 3:58 PM: Via RedWingsFeed, Crain's Detroit Business's Bill Shea reports that the status of the Red Wings' follow-on rink replacing Joe Louis Arena should become a little clearer soon:

Update:

MLive's David Muller confirms...

The Downtown Development Authority is expected to make a "significant vote" at its 2 p.m. meeting Wednesday, and there is speculation that it could concern plans for a $650 million Detroit Red Wings arena and entertainment district.

Detroit Economic Growth Corporation President George Jackson is making himself available to the media after the meeting.

As does the Detroit News's Louis Aguilar:

Detroit A planned $650 million Red Wings hockey arena and entertainment district is being discussed by the city’s development arm.

More details will emerge when the agenda for a special board meeting of the Downtown Development Authority are handed out to the public just before the start of 2 p.m. meeting today. The News already has reported that the DDA is considering making a annual grant of nearly $13 million for the project.

Under the concept proposed by Ilitch Holdings, a new hockey arena or multipurpose events center would anchor a 35-acre downtown district featuring sports, entertainment, stores and housing somewhere near the Ilitch family’s company headquarters in the restored Fox Theatre on Woodward Avenue and nearby Comerica Park, the home built for Mike Ilitch’s Detroit Tigers.

The $12.8 million comes from school taxes collected by the Downtown Development Authority. This revenue stream, which could vary each year depending on the economy, would pay for bonds that would be used to finance construction.

Update #2:

Update #3:

Update #4:

Update #5:

Update #6:

 


Update #7: More from Gallagher:

Detroit’s Downtown Development Authority voted today to approve a memorandum of understanding with the Ilitch organization to build a new multipurpose arena and events center on the north end of downtown.

The site is a multiblock area on the west side of Woodward just north of I-75.

Rumored for years and in serious negotiations for months, the multipurpose arena would serve as a new home for the Detroit Red Wings.

Total cost of the project including spin-off development is about $650 million, with private money paying for a little more than half of it.

The deal is tentative and what officials called a “framework” for a final deal. Multiple steps have to be concluded before the deal is final.

Update #8:

Update #9: Per WWJ's Pat Sweeting...

A tentative deal has been reached for a $650 million events center in downtown Detroit.

The plan by Olympia Development — which officials say would be supported by 56 percent in private money and 44 percent in public funding —  includes an 18,000-seat Red Wings arena along Woodard Avenue at Temple, just north of the Fox Theatre, near I-75.

When Detroit businessman Mike Ilitch announced the mixed-use project back in December, he said the new entertainment district would include the multipurpose event center, housing, office and retail space. The district “will be strategically located to serve some of the most underutilized areas in Detroit’s downtown core,” Olympia Development said.

The AP...

The Detroit Red Wings and city officials have announced a $650 million plan for a new arena for the NHL team in the city's downtown entertainment and sports district.

The project was announced Wednesday at a meeting of economic development officials to approve the deal. The 18,000-seat arena would be at Interstate 75 and Woodward Avenue, near the Detroit Tigers' Comerica Park and the Detroit Lions' Ford Field.

Red Wings and Tigers owner Mike Ilitch has long said that he wants a replacement for the 32-year-old Joe Louis Arena.

The Red Wings say there will be $367 million in private investment and $283 million in public funds in the complex. It also will include residential and retail space.

Ilitch's family also owns Little Caesars Pizza and downtown Detroit's Fox Theatre.

And the Huffington Post:

Looks like the Detroit Red Wings will leave their downtown digs for a new arena. The city's Downtown Development Authority announced a plan and approved a memorandum of understanding to build a new home for the Original Six hockey club, owned by Olympia Entertainment founder, pizza magnate and Detroit Tigers owner Mike Ilitch.

The 18,000-seat arena will pack 650,000 square feet of total event center space north of Comerica Park and Ford Field, in the area long rumored to be eyed for a new hockey stadium. A map shows the construction area lies along Woodward Avenue between Temple Street and the Fisher Freeway.

The district would include a $450 million sports and entertainment center and $200 million in new residential, retail and office development in an approximately 45-block area stretching from Grand Circus Park to Charlotte St. between Woodward Ave. and Grand River Ave., according to a statement released by the Downtown Development Authority.

The new arena boasts a smaller capacity than the 20,058-seat Joe Louis Arena, which opened in 1979. Joe Louis Arena is currently the National Hockey League's fourth-oldest hockey venue.

The DDA will own the arena, which will cost $650 million total. $285 million will be funded with public money, according to the DDA. According to Crain's Detroit Business reporter Bll Shea, the arena will also boast office space, retail opportunities and a parking garage.

Here's the Huffington Post's development picture:

Update #10: Here's Crain's Detroit Business's Bill Shea's report:

A new arena, which would replace the aging Joe Louis Arena, could generate $5 million to $8 million annually in additional team revenue, sports industry insiders have told Crain's.

The current Joe Louis lease between the city and Olympia, widely considered one of the most team-friendly in pro sports, calls for the Ilitches to rent the building for $25,000 a month in lieu of taxes.

Joe Louis Arena was built by the city for $30.3 million in 1979 and financed with municipal bonds. The team, then owned by Bruce Norris, signed a deal in 1979 to move into Joe Louis that season, leaving behind its home since 1927, Olympia Stadium. Norris also owned Olympia, which was demolished.

The Ilitches bought the Red Wings from Norris for $8 million in 1982, and have subsequently won four Stanley Cups while Detroit has earned the sobriquet "Hockeytown."

Property taxes are a major reason for the Ilitches to not want to own a new arena, said Neil deMause, a New York-based journalist and co-author of the book Field of Schemes, which took a critical look at public funding for professional sports stadiums.

"If the state owns the building, presumably you don't have to pay property taxes. That's huge. That's why a vast number of authorities are owned by public entities even if the teams are paying for the construction costs," he said.

Three out of Detroit's four pro sports venues in the region are owned by public stadium entities.

Update #11: From the Detroit News's Louis Aguilar:

Under the concept proposed by Ilitch Holdings, the new hockey arena, or multipurpose events center, would anchor a 35-acre downtown district featuring sports, entertainment, stores and housing near the Ilitch family’s company headquarters in the restored Fox Theatre on Woodward Avenue and nearby Comerica Park, the home built for Mike Ilitch’s Detroit Tigers.

On Wednesday, the DEGC announced it approved a memorandum of understanding with Olympia Development of Michigan and Wayne County that “describes the proposed public and private financing and location for a new sports and entertainment district Downtown.”

According to the DEGC, the district includes a $450 million sports and entertainment center and $200 million in new residential, retail and office development in an approximately 45-block area that generally reaches from Grand Circus Park to Charlotte Street between Woodward and Grand River avenues.

The DEGC also announced “the new development is anticipated to create approximately 5,500 jobs for the events center alone and approximately 8,300 jobs for the entire residential and commercial mixed-use district. Michigan can anticipate an estimated economic impact of $1.8 billion from the completion of this project.”

Other projects that could be part of the $200 million additional development include:

■ 140,000 square feet of new mixed office and retail development on Woodward at Sproat St.

■ 25,000 square feet of office and retail development along Woodward

■ Several parking structures with a total of 25,000 square feet of retail

■ Renovation of the Detroit Life Building at 2210 Park Ave. for 3,645 square feet of retail and 35 residential units

■ Renovation of the Blenheim Building at 81 W. Columbia St. for 1,833 square feet of retail and 16 residential units

■ Renovation of the building at 1922 Cass Ave. for 70,000 square feet of office space

■ A new hotel-retail development with a 20,000 square feet of ground floor

■ Parking lots and other amenities

“The primary public funding mechanism for the $450 million center is a continuation of a projected $12.8 million-per-year property tax capture authorized by the State Legislature in December,” according to a release from the DEGC. “The DDA is also expected to contribute an average of just over $2 million per year. Olympia Development is expected to contribute $11.5 million per year. All three of those commitments would be used to retire 30-year private activity bonds issued through the Michigan Strategic Fund.

“The DDA would own the events center and Olympia Development would manage it under a long-term contract. Before that concession management agreement (CMA) can be finalized, the City of Detroit has to approve the expansion of the DDA boundaries and other matters related to the development. The Economic Development Corporation of the City of Detroit has to review and amend plans for the area and transfer property it owns. Wayne County, the State of Michigan Strategic Fund and others also have to approve aspects of the development plan before construction can begin.”

Update #12: Here's MLive's David Muller's report:

More specifics for a new, 18,000-seat, state-of-the-art Detroit Red Wings arena and accompanying entertainment district were revealed at a Downtown Development Authority meeting Wednesday, though Detroit Economic Growth Corporation President and CEO George Jackson said the plans are "framework" and the portrait of the development is still being drawn.

The $650 million development would be funded with a mix of $365.5 million in private investment and an estimate public investment of $284.5 million, and Jackson and others were quick to stress that no money would come from the general funds of financially beleaguered city or county.

Instead, the $450 million sports and entertianment center and accompanying $200 million resdiential, retial and office district is getting public money thouhg tax incentive cpatures, he siad.

The entrie district encompasses a 45-block area roughly bordered by Charlotte Street to the north, Grand River to the west, Grand Circus Park to the south and Woodward Avenue to east. The actual 650,000-square-foot arena would be located on Woodward Avenue from Sproat to Henry Street, and west to Park Avenue.

Further details on the project, being led by Detroit Red Wings owner Mike Ilitch's Olympia Development, came as the DDA unanimously voted to approve a memorandum of understanding between the DDA, Olympia Development and Wayne County. Eventually, the DDA will own the arena and lease it to Olympia Development.

DDA spokesman Bob Rossbach said the next step for the DDA would be to vote to approve its coverage area north of Grand Circus park, thus encompassing the project's footprint.

...

According to the DEGC, which staffs the DDA, the new development is anticipated to create roughly 5,500 jobs for the arena alone, and about 8,300 jobs for the entire mixed-use district. The DEGC says the it will have a statewide economic impact of $1.8 billion.

The timeline for the actual project to be complete is still a ways off, with Rossbach saying that 2016 or 2017 would be an aggressive finishing point. Jackson said that if the project were a football field, it would now be close to the 50-yard line, "but when you get in the red zone you never know what will happen."

Update #13: WXYZ posted the DEGC's press release:

The Detroit Downtown Development Authority (DDA) has approved a memorandum of understanding (MOU) among the DDA, Olympia Development of Michigan (ODM) and Wayne County that describes the proposed public and private financing and location for a new sports and entertainment district Downtown.

The district would include a $450 million sports and entertainment center and $200 million in new residential, retail and office development in an approximately 45-block area that generally reaches from Grand Circus Park to Charlotte St. between Woodward Ave. and Grand River Ave.

The multipurpose event center is anticipated to be an approximately 650,000 sq. ft. facility with 18,000 seats that can accommodate Red Wings hockey games, as well as other sports and entertainment events year-round. It will also include premium seating and amenities of a contemporary first-class professional sports and entertainment complex.

The new district anticipates expanding the boundaries of the DDA several blocks north of I-75 and west of Woodward Ave. to accommodate the center, redeveloping several properties, building new parking decks and mixed-use developments.

The new development is anticipated to create approximately 5,500 jobs for the events center alone and approximately 8,300 jobs for the entire residential and commercial mixed-use district. Michigan can anticipate an estimated economic impact of $1.8 billion from the completion of this project.

“We have outlined a deal that will do far more than build new home ice for the Red Wings. When it’s done, it will redefine Detroit’s Downtown. We will have incorporated all three of our major league sports venues into an exciting, walkable sports and entertainment district that will rival anything in the world,” said George W. Jackson, Jr., president and CEO of Detroit Economic Growth Corporation, which managed negotiations on behalf of the DDA. “A project of this scale requires strong commitments from both private and public partners, and that’s exactly what this agreement represents.”

Other projects that could be part of the $200 million additional development named in the MOU include:

  •     A 140,000 sq. ft. new mixed office and retail development on Woodward at Sproat St.
  •     A 25,000 sq. ft. office and retail development along Woodward
  •     Several parking structures with a total of 25,000 sq. ft. of retail
  •     Renovation of the Detroit Life Building at 2210 Park Ave. for 3,645 sq. ft. of retail and 35 residential units
  •     Renovation of the Blenheim Building at 81 W. Columbia St. for 1,833 sq. ft. of retail and 16 residential units
  •     Renovation of the building at 1922 Cass for 70,000 sq. ft. of office space
  •     A new hotel-retail development with a 20,000 sq. ft. ground floor
  •     Parking lots and other amenities

The primary public funding mechanism for the $450 million center is a continuation of a projected $12.8 million-per-year property tax capture authorized by the State Legislature last December. The DDA is also expected to contribute an average of just over $2 million per year. Olympia Development is expected to contribute $11.5 million per year. All three of those commitments would be used to retire 30-year private activity bonds issued through the Michigan Strategic

Fund.

Additional private sources are expected to fund the remainder of the $650 million total investment anticipated for the entire district. Overall, approximately 56 percent of the total development costs of the district would be privately funded and approximately 44 percent would come from public economic development funds requiring no new taxes.

The DDA would own the events center and Olympia Development would manage it under a long-term contract. Before that concession management agreement (CMA) can be finalized, the City of Detroit has to approve the expansion of the DDA boundaries and other matters related to the development. The Economic Development Corporation of the City of Detroit has to review and amend plans for the area and transfer property it owns. Wayne County, the State of Michigan Strategic Fund and others also have to approve aspects of the development plan before construction can begin.

Jackson added, “Today’s agreement represents one step among many that all the partners have to take together, but it is a very significant step.”

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Comments

SYF's avatar

Hoooo boy, here we go.  Wonder what Kronner must be thinking now?

Posted by SYF from The Revenge of Johnny E on 06/19/13 at 12:49 PM ET

Avatar

Here we go

‏@JGallagherFreep 1m
Tentative deal reached for $650 million events center (arena) on north end of downtown Detroit with Ilitches” Olympia Development #freep

Posted by AppState on 06/19/13 at 01:10 PM ET

Primis's avatar

If they build a new arena, it needs to be Red Wings first, everything else second.

The Pistons can fold or move back to Fort Wayne for all I care before they get to “share” an arena with the Wings.

Posted by Primis on 06/19/13 at 01:17 PM ET

SYF's avatar

The Pistons can fold or move back to Fort Wayne for all I care before they get to “share” an arena with the Wings.

Posted by Primis on 06/19/13 at 02:17 PM ET

You should stop making yourself comfortable in my head, Primis.  Holy hell…

wink

Posted by SYF from The Revenge of Johnny E on 06/19/13 at 01:19 PM ET

Primis's avatar

So the location, by Comerica and Ford Field?  I like it I guess, but… wow that could make for serious traffic problems, no?

I’m not so impressed by 18,000 seats.  Needs to be more than that or else ticket prices will be unbelievably awful.

Posted by Primis on 06/19/13 at 01:32 PM ET

MoreShoot's avatar

The $12.8 million comes from school taxes collected by the Downtown Development Authority. This revenue stream, which could vary each year depending on the economy, would pay for bonds that would be used to finance construction.

WTF.  How can you siphon from the school tax fund to build a sports arena?

Posted by MoreShoot on 06/19/13 at 01:34 PM ET

SYF's avatar

WTF.  How can you siphon from the school tax fund to build a sports arena?

Posted by MoreShoot on 06/19/13 at 02:34 PM ET

Word.  That bothered me.  Is that a one-time thing only?  How is the school tax fund going to be compensated?

Posted by SYF from The Revenge of Johnny E on 06/19/13 at 01:54 PM ET

MoreShoot's avatar

The proposal says there is 44% public funding.  That = $286M.  The city is negotiating bankruptcy, essentially.  I don’t know how this happens.

Posted by MoreShoot on 06/19/13 at 01:56 PM ET

Hootinani's avatar

I’m not so impressed by 18,000 seats.  Needs to be more than that or else ticket prices will be unbelievably awful.

Posted by Primis on 06/19/13 at 02:32 PM ET

Exactly, like it doesn’t already cost an arm, a leg, and half a sack to go to a Wing’s game and sit anywhere that isn’t behind a post.

Posted by Hootinani on 06/19/13 at 01:57 PM ET

SYF's avatar

If those tix prices are anywhere near the United Center’s…

And in these trying economic times?

Posted by SYF from The Revenge of Johnny E on 06/19/13 at 02:00 PM ET

Down River Dan's avatar

This is good news for downtown as well as for the Wings, but the days of the Wings playng at an almost exclusively hockey only venue are numbered.

You better believe Olympia entertainment is going to book as many concerts, rodeos, and circuses into that building on any non game night.

Al Sabotka, your job is about to get a lot tougher.

Posted by Down River Dan on 06/19/13 at 02:05 PM ET

George Malik's avatar

Jimmy D stated that the team wanted to go down to 18,000 to increase demand for seats (and $$).

Posted by George Malik from South Lyon, MI on 06/19/13 at 02:05 PM ET

SYF's avatar

Jimmy D stated that the team wanted to go down to 18,000 to increase demand for seats (and $$).

Posted by George Malik from South Lyon, MI on 06/19/13 at 03:05 PM ET

Wow.  Just wow, Jimmy D…

Posted by SYF from The Revenge of Johnny E on 06/19/13 at 02:11 PM ET

J.J. from Kansas's avatar

It’s really hard to build a 20,000 seat arena that has luxury boxes that rich people will actually pay for.

Posted by J.J. from Kansas on 06/19/13 at 02:15 PM ET

SnLO's avatar

down to 18,000 to increase demand for seats

The problem is that it doesn’t increase demand, it only decreases the supply. The demand goes up when there is interest due to the quality product / performance. End result remains higher cost (more $$). What they seem to realize is that they could make more money selling 2k more seats (especially when demand rises) than the increase in price due to lack of supply.  Short-sighted.  Shame.

Posted by SnLO from beyond the M-1 on 06/19/13 at 02:21 PM ET

SnLO's avatar

*seem to fail to realize

oops

Posted by SnLO from beyond the M-1 on 06/19/13 at 02:23 PM ET

Kate from Pa.-made in Detroit's avatar

Exactly, like it doesn’t already cost an arm, a leg, and half a sack to go to a Wing’s game and sit anywhere that isn’t behind a post.

Posted by Hootinani on 06/19/13 at 02:57 PM ET

Indeed it is expensive to go to a Wing’s game, but, there are virtually no obstructed views at The Joe.  That was the primary intent in the design of the arena.

I am not on board with public financing though. Any endeavor should be financed entirely by the billionaires that own the teams.

Just sayin…...

Lets Go Red Wings!!!!!

Posted by Kate from Pa.-made in Detroit on 06/19/13 at 02:24 PM ET

d ca's avatar

The City of Detroit may be going bankrupt, but the Downtown Development Authority isn’t. That is how they can pay for the arena. The City of Detroit only has to say okay you can operate 2 blocks north of your current charter.

They are taking from the school fund…just not making property tax payments to it. Think about it like if a house is grabbed by eminent domain and stops paying taxes because it’s not a private residence anymore.

The seating capacity is going down because the suites will now occupy lower and mid- level positions instead of just starting at the top row. Probably some permanent camera wells instead of setting up on top of the seating entrances will mean some more are lost too. And you might even get a handrail or two on the stairs.

Expect electronic advertising everywhere.

Traffic shouldn’t be as bad if they put in a light rail system that connects to parking lots….used the one in Denver and Wash DC to get to games and it makes a huge difference. Exception could be in Oct if Tigers, Lions, and Wings are playing on same day.

Cheli’s, Hockeytown, Town Pump, etc will make a killing with the location…as will Motorcity Casino…

Posted by d ca on 06/19/13 at 02:43 PM ET

Primis's avatar

You better believe Olympia entertainment is going to book as many concerts, rodeos, and circuses into that building on any non game night.

Al Sabotka, your job is about to get a lot tougher.

Posted by Down River Dan on 06/19/13 at 03:05 PM ET

All those are fine, so long as there’s not a single NBA game there, ever.  It’s not like the Joe doesn’t host those already…

The seating capacity is going down because the suites will now occupy lower and mid- level positions instead of just starting at the top row. Probably some permanent camera wells instead of setting up on top of the seating entrances will mean some more are lost too. And you might even get a handrail or two on the stairs.

Posted by d ca on 06/19/13 at 03:43 PM ET

As George already noted, Jimmy D opened his mouth already and ruined that explanation.  It really is just to increase demand and therefore prices.

Posted by Primis on 06/19/13 at 03:06 PM ET

Red Winger's avatar

WTF.  How can you siphon from the school tax fund to build a sports arena?

Posted by MoreShoot on 06/19/13 at 02:34 PM ET

You know how the state advertises that all monies collected by the state lottery go to public education, and that amount is around 750 million each year? Well ,what they don’t tell you is when that money is put into the education coffers 750 million is then siphoned out of the education coffer for other projects.

So, does the lottery put 750 million each year in to public education? Yes. Is it an additional 750 million to what is already there? No.

Ladies and gentlemen, your Lansing politicians. (standing ovation)

Posted by Red Winger from Sault Ste Marie on 06/19/13 at 03:34 PM ET

Avatar

What they seem to (fail to) realize is that they could make more money selling 2k more seats (especially when demand rises) than the increase in price due to lack of supply.

You are acting like it’s an either or kind of thing.  They can increase prices now to reflect reduced supply and they’ll increase prices later just because they can.

How can you siphon from the school tax fund to build a sports arena?

Because it’s Detroit, politicians are liars, and voters are stupid.  Whenever anyone suggests cutting a dime of spending from anywhere people scream to high heaven about how many teachers, firemen and cops will have to be furloughed as a result.  Not the third undersecretary of first floor maintenance.  I guarantee you the cries that 15 million bucks every year being taken directly out of the education coffers won’t generate nearly as much agita.

The city is negotiating bankruptcy, essentially.  I don’t know how this happens.

From their perspective this is the best time to do this, really.  Hell, they should spend a billion dollars on it.  They’re going to just default on all of those payments anyway.

Posted by HockeyinHD on 06/19/13 at 04:01 PM ET

HockeytownOverhaul's avatar

lmao, we’ll hang onto players YEARS after they’re useful, but, in the state suffering longest and hardest from economic decline, Jimmy D has no problems extorting the fans which have paid for glorious career, grinding out 14 hour days.

I’ve been to ONE Wings game.  It’s only 3 hours, and I’d make the drive if I could get deals like Cbus gives, but when my GF spent 50.00 a ticket to watch them play the jackets, she didn’t realize it was a ticket to stand next to a wall.  And JD wants to INCREASE prices? 

The reason people pay NFL prices is because they play under 20 games a year.

I’ll continue watching the Wings visit arena’s instead of going to the Joe or wherever else they end up.

Posted by HockeytownOverhaul on 06/19/13 at 04:35 PM ET

Primis's avatar

I’ve been to ONE Wings game.  It’s only 3 hours, and I’d make the drive if I could get deals like Cbus gives, but when my GF spent 50.00 a ticket to watch them play the jackets, she didn’t realize it was a ticket to stand next to a wall.  And JD wants to INCREASE prices?

Yup.

We went to the CBS playoff game a few years ago with the really stupid-low rate in the upper sections.  That was great.  And as a surprise my wife splurged on WCF tickets on the red line in lower bowl in… 2007 was it against the Ducks?  The third game we “recently” saw, a reg. season NAS game, were free tickets she won at work.

We can’t afford tickets to the Joe right now, and we certainly never will at the new arena now, at this rate.  We’ve been totally priced out.  They have “rush” cheap tickets you can get in the box office on gamedays sometimes, but I live halfway across Michigan so that does us no good.

Truth?  We have a tough time affording Griffins or K-Wings tickets anymore even.  ECHL tickets have gone up quite a bit even from a few years ago (and parking at Wings Stadium in Kzoo is no longer free even, which completely blows considering the parking lot sucks, and now you can’t call the box office to buy tickets you have to buy online which means more fees through Ticketmaster).

Live hockey has pretty much priced itself out of my range now.  It’s a very rare splurge, nothing more, even the minor pro level.  As a huge fan who devotes a huge amount of my attention and time to hockey in general… it’s sad.

Posted by Primis on 06/19/13 at 04:56 PM ET

OlderThanChelios's avatar

An 18,000-seat arena will place the new venue 22nd among all arenas, right below Denver at 18,007. That alone makes this a joke. But to so openly and so crassly state that they’re doing it in order to jack up the per-seat prices, well, that’s just disgusting.

In that one single decision, Mr. I and the Wings’ organ-$-zation has lost a lot of good will with Wings fans.

Posted by OlderThanChelios from Grand Rapids, MI on 06/19/13 at 05:33 PM ET

SYF's avatar

Man, Jimmy D has completely overestimated the Detroit market for sports and entertainment.  What were the going prices for general admission at Ford Field and Comerica Park?

Posted by SYF from The Revenge of Johnny E on 06/19/13 at 05:52 PM ET

Avatar

In that one single decision, Mr. I and the Wings’ organ-$-zation has lost a lot of good will with Wings fans.

Uh-huh.  Like all the goodwill that the NHL lost from the lockout?  Like all the goodwill the Wings lost from Jimmy D shooting his mouth off during it?

Detroit’s average ticket price is actually below the league average ticket price.  Hell, Detroit’s average ticket is cheaper than Nashville’s average ticket.  Or Florida’s.

Relatively speaking, Detroit’s been a bargain to see for years.  That said, people who spend a bunch of money and time to go see live games anymore are suckers, IMO.

Posted by HockeyinHD on 06/19/13 at 07:44 PM ET

SnLO's avatar

You are acting like it’s an either or kind of thing.

Uh.. Yes. Because it is. Variables involved in price increases aside, yes they can raise prices whenever they like, but they will not earn the money they would have earned due decrease seating / ticket sales.

According to Forbes (November 2012 valuation) DRW average ticket price is $64. So, provided a sell-out, the average per game revenue from ticket sales is $1.28 M from a 20k seat arena. To go to a 18k seat arena, DRW must raise average ticket prices by $7.35 a ticket to maintain the same revenue. If the consumer is willing to pay an average $7.35 increase the DRW lost out an average potential revenue of $147k per game due to having 2k fewer seats at an average of $71.35. 

Detroit’s average ticket price is actually below the league average ticket price.  Hell, Detroit’s average ticket is cheaper than Nashville’s average ticket.  Or Florida’s.

I’m curious your source because Forbes last team valuation lists Nashville avg price at $51 for a 17,113 capacity stadium; Florida at $48, 17,040 stadium. The league average is $60 per game. Detroit is ranked at 9th most expensive with a stadium that is ranked 2nd in capacity.

Seems to me JD (or some other brain trust) is not so smart by limiting the supply in spite of the demand.

Posted by SnLO from beyond the M-1 on 06/20/13 at 10:58 AM ET

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The Malik Report is a destination for all things Red Wings-related. I offer biased, perhaps unprofessional-at-times and verbose coverage of my favorite team, their prospects and developmental affiliates. I've joined the Kukla's Korner family with five years of blogging under my belt, and I hope you'll find almost everything you need to follow your Red Wings at a place where all opinions are created equal and we're all friends, talking about hockey and the team we love to follow.