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Johnny Mac

Wings/Pistons shared downtown arena?

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The idea that the Pistons would vacate a state of the art, paid for, (free and clear, no debt owed) arena is amazingly laughable. only the incompetent Chris McCosky could write something so grounded in insanity.

The Pistons don't own the facility so the fact that it's paid for may have no bearing on the future if Karen Davidson is looking to sell some of these things.

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Interesting article. I don't see anyway possible that the Wings leave downtown under Illitch, maybe during a new build, but not long term. I think what also needs to be considered is the fact that Illitch as a whole will still make WAY more money overall by having a partially full downtown arena where folks are having pregame drinks at his bars, eating at his restaurants, parking in his lots and gambling at his casino (is it still his wifes?) than a 100% sold out Palace. The guy owns a revenue machine and has built his business from the core of Detroit, to move a venture to the burbs wouldn't make much sense in the grand scheme.

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The Pistons don't own the facility so the fact that it's paid for may have no bearing on the future if Karen Davidson is looking to sell some of these things.

PSE owns controlling interest in the Palace.....which is owned by Karen. My guess is, nobody is buying the Pistons without the Palace being included, unless they plan to move the team which would be unlikely.

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The Pistons don't own the facility so the fact that it's paid for may have no bearing on the future if Karen Davidson is looking to sell some of these things.

Karen Davidson owns the entitiy that owns the facility..

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Karen Davidson owns the entitiy that owns the facility..

His point is that she could sell the Pistons and either keep the Palace or PSE or sell that to someone else. In that situation then the Pistons are only tenants and not partners so conceivably they could play anywhere because the fact that the Palace is paid for is irrelevant.

But I share the concerns on how attractive the Pistons would be without the Palace and the rest of the empire. But I guess people a lot smarter than I am and with access to the information can make that guess.

Does the Forbes figure of 400+ million take into account the Palace? As I think about it I"m not so sure it would. The Pistons are just one piece of the PSE empire, as is the Palace. So why would the economic situation of the Palace matter to the value of the Pistons any more than the value of Pine Knob or even Meadowbrook.

Alternatively, does the Palace have much value if the Pistons are not tenants?

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His point is that she could sell the Pistons and either keep the Palace or PSE or sell that to someone else. In that situation then the Pistons are only tenants and not partners so conceivably they could play anywhere because the fact that the Palace is paid for is irrelevant.

But I share the concerns on how attractive the Pistons would be without the Palace and the rest of the empire. But I guess people a lot smarter than I am and with access to the information can make that guess.

Does the Forbes figure of 400+ million take into account the Palace? As I think about it I"m not so sure it would. The Pistons are just one piece of the PSE empire, as is the Palace. So why would the economic situation of the Palace matter to the value of the Pistons any more than the value of Pine Knob or even Meadowbrook.

Alternatively, does the Palace have much value if the Pistons are not tenants?

Ob..can you imagine people worth 4BB allowing the sale of an entitiy without locking up the tennant to a lease for the facility?? cmon..lets not play businessman at the 5th grade level..its not happening..ever..

Think about it..I'm going to sell the Pistons and not obligate the buyer to the Palace..so that I have no primary tennant for my arena that I intentionally maitained ownership of..

Like I said..people worth 4BB are not this foolish..

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Ob..can you imagine people worth 4BB allowing the sale of an entitiy without locking up the tennant to a lease for the facility?? cmon..lets not play businessman at the 5th grade level..its not happening..ever..

Think about it..I'm going to sell the Pistons and not obligate the buyer to the Palace..so that I have no primary tennant for my arena that I intentionally maitained ownership of..

Like I said..people worth 4BB are not this foolish..

well unless you can show me your MBA and extensive experience in the sale entertainment conglomerates then your opinion is just as valid as mine, fifth grade or not.

It all depends on how bad they want to sell the Pistons and how valuable the Palace would be without the Pistons as a tenant (A concern I brought up twice). And frankly those are answers you and I do not know, we can only speculate.

Everything's negotiable. If the value is 400 million and someone offers them 500 million with a 2 year lease at the Palace so they can pursue other arena options, then that's something they might consider. And considering the state of the NBA they may be hard pressed to find a buyer who wouldn't also own the arena and may have to offer concessions to get them off the books.

Davidson is no longer alive. I assume his widow didn't play a big part in the building of the empire. The trustees and heirs may not have the emotional attachment to it all that the founder naturally has to what he built. They may be ready to just move on and be done with it. We really don't know.

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The palace by itself is an asset. The pistons, by themselves, are assets. While you can certainly make an argument that they both can go together, it's just as reasonable to think they can be sold separately.

I don't think it would be out of the realm of possibility that someone that wanted to purchase the Pistons would also want them downtown, thus making the palace a liability in terms of their desire.

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The Wings will never play in Auburn Hills for an extended period of time, I could see it temporarily while a new stadium is built, but they would be too far away from their core fan base (as the article states). I think the likely outcome is Wings get a new stadium downtown and play in the Palace temporarily until its built. I think the days in JLA are numbered.

So you consider the Wings core fan base is comprised mostly of Detroiters? Id say Oakland County and Livingston County is where the core fan base is mostly located.

Edit: Im sick I forgot about Windsor and Canadian fans. Excuse my lapse.

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So you consider the Wings core fan base is comprised mostly of Detroiters? Id say Oakland County and Livingston County is where the core fan base is mostly located.

Edit: Im sick I forgot about Windsor and Canadian fans. Excuse my lapse.

Not Detroit, per se, but Metro Detroit. I really doubt that there are more fans in Oakland County than in Wayne County. I mean even the article mentions that

Still, to move the Red Wings to North Oakland County could be risky. The core fan base is still Metro Detroit and Downriver. The Wings would rope in more corporate money by moving to The Palace, but would lose the Hockeytown atmosphere.

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I would love to see the Pistons play a few games downtown, but the Palace still looks new. It would seem like an awfully big waste to vacate it now or in the near future.

Yea, but people like me would no longer go to the games, too much hassle to get to the city.

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The palace by itself is an asset. The pistons, by themselves, are assets. While you can certainly make an argument that they both can go together, it's just as reasonable to think they can be sold separately.

I don't think it would be out of the realm of possibility that someone that wanted to purchase the Pistons would also want them downtown, thus making the palace a liability in terms of their desire.

Let me repeat this..no matter how you want to phrase the idea..it's not happening..the Palace without a team is a near worthless venue..McCosky's idea has zero credibilty..he knows better..the DRW approached palace entertainment about using their venue last summer, it's not a big secret, except to McCosky..

It's a business 101 equation.

Wealthy billionaire's do not become wealthy billionaire's doing foolish things..

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Let me repeat this..no matter how you want to phrase the idea..it's not happening..the Palace without a team is a near worthless venue..McCosky's idea has zero credibilty..he knows better..the DRW approached palace entertainment about using their venue last summer, it's not a big secret, except to McCosky..

It's a business 101 equation.

Wealthy billionaire's do not become wealthy billionaire's doing foolish things..

Is there a mortgage on the Palace? If not, then it's hardly worthless. There's 365 days in the year and the Pistosn occupied about 1/3 of that. Yes it's a big chunk but to the owners of the Davidson estate it's free money. Obviously a buyer with the Pistons as a tenant would probably pay more than one without the Pistons as an tenant. So are you saying that if they offered you'd the Palace for $100,000 but the Pistons wouldn't be there, you wouldn't take it? What if the price was $30 million? Everything's negotiable.

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Is there a mortgage on the Palace? If not, then it's hardly worthless. There's 365 days in the year and the Pistosn occupied about 1/3 of that. Yes it's a big chunk but to the owners of the Davidson estate it's free money. Obviously a buyer with the Pistons as a tenant would probably pay more than one without the Pistons as an tenant. So are you saying that if they offered you'd the Palace for $100,000 but the Pistons wouldn't be there, you wouldn't take it? What if the price was $30 million? Everything's negotiable.

Ob..no mortage..it's the point of the posts..been mentioned numerous times..

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Yea, but people like me would no longer go to the games, too much hassle to get to the city.

But for someone like me it's a big hassle to go all the way to Auburn Hills.

I would love to see when the Pistons are sold, (and they will be - and the Illitch family will not be the ones buying them), I would love to see the teams work out an arragnement where maybe the Wings play five games a year at the Palace and the Pistons play five games a year in the new hockey arena. Why not?

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But for someone like me it's a big hassle to go all the way to Auburn Hills.

I would love to see when the Pistons are sold, (and they will be - and the Illitch family will not be the ones buying them), I would love to see the teams work out an arragnement where maybe the Wings play five games a year at the Palace and the Pistons play five games a year in the new hockey arena. Why not?

Because it's a business and the revenues from ancellary streams like concessions, parking and suites are not linear..

Big business..when large sums of money are involved noble expereiments are rarely considered.

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Let me repeat this..no matter how you want to phrase the idea..it's not happening..

Anything can happen

the Palace without a team is still one of the best entertainment stadiums in the country

fixed that portion for you

Wealthy billionaire's do not become wealthy billionaire's doing foolish things..

...and billionaires don't stay billionaires by doing foolish things. Someone with a ton of money is going to be needed to buy Davidson's assets. How many people around Michigan with an interest in sports teams are there? The obvious ones are the current owners of other sports teams with ties to this area, Bill Ford, Mike Illitch, Peter Karmanos, and Dave Gilbert.

One of those couldn't buy the Pistons (without selling his current team), but out of all of them, how many of them would want their team to play outside of the city of Detroit? Would they mind the Palace to be thrown in the deal so they could have a place while they transition....of course, but remember your motto, "wealthy billionaire's do not become wealthy billionaire's doing foolish things".

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Ob..no mortage..it's the point of the posts..been mentioned numerous times..

It was a slightly rhetorical question as I assume it is paid for but cannot say for certain. Maybe there's some financial wizardry involved where a mortgage does exist for tax reasons that's fully backed by cash. I don't know. I"m not a lawyer or CPA. I've always heard he paid for it "out of his own pocket" but that can mean many things. Ther's also been numerous renovations over the years.

Where has it been mentioned by anybody with an informed opinion? Also, can you make one post that's not condescending?

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It was a slightly rhetorical question as I assume it is paid for but cannot say for certain. Maybe there's some financial wizardry involved where a mortgage does exist for tax reasons that's fully backed by cash. I don't know. I"m not a lawyer or CPA. I've always heard he paid for it "out of his own pocket" but that can mean many things. Ther's also been numerous renovations over the years.

Where has it been mentioned by anybody with an informed opinion? Also, can you make one post that's not condescending?

Still no..well known fact since about 1994. No funny business, when your worth 4BB, there is no need for funny business..we all appeciate the mistrust.

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Anything can happen

no it can't..and not in this instance..because the most financially berift county in the USA isn't going to provide sizable subsidies to build a hockey arena..especially when a state of the art facility sits 40 miles north, ready and waiting. Now if Illitch wants to build one out of his own pocket..great..The Pistons under no scenario are vacating the Palace, not for at least 20 years..

...and billionaires don't stay billionaires by doing foolish things. Someone with a ton of money is going to be needed to buy Davidson's assets. How many people around Michigan with an interest in sports teams are there? The obvious ones are the current owners of other sports teams with ties to this area, Bill Ford, Mike Illitch, Peter Karmanos, and Dave Gilbert.

One of those couldn't buy the Pistons (without selling his current team), but out of all of them, how many of them would want their team to play outside of the city of Detroit? Would they mind the Palace to be thrown in the deal so they could have a place while they transition....of course, but remember your motto, "wealthy billionaire's do not become wealthy billionaire's doing foolish things".

They all would want the Palace to be thrown in, unless the Davidson family wanted to retain the entertainment business and cut them an incentive laden lease deal. Gilbert, Karmanos and Illitch live in the Franklin, Bloomfield Hills, West Bloomfield area..and who in their right mind cares anything about what Bill Ford would do..

Davidsons assets have already been divied up, the business and foundation is separate from the Sports and Entertaiment empire..

Once again..billionaires take care of these issues before they die..it's why they became billionaires.

Edited by sportz4life

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To the person who noted that getting to downtown is just as hard for them as an oakland county resident as it is for people living south of auburn hills to get to the palace, you're nuts. Most games are at night during the week. Do you happen to notice which way traffic moves in the evenings on i-75 in the evenings? Getting south is a breeze, because, you know, no one goes downtown at night. The palace is a nightmare to get to for everyone who doesn't live in Clarkston because, you know, tons of people who work in detroit live in Oakland county. Hell, I know people in northern troy who can't get to the palace from their homes in less than 25 mins on game days because of the traffic. So that is a complete misstatement.

Let me tell you what this is- This is all one big "plant" of somebody's "pipe dream" in the press to make the city come to the table and give Mr. I some concessions. Nothing more. He knew that once it was in the papers, wonderful super sleuth reporters like Bernie Smilovitz would do their 'crack' reporting and virutally read it on the air (which he did, verbatim, today). So there you have it...an idea that makes no sense at all (even short term) sounds really really plausible to the common man.....right, now on to the next "scoop".

Edited by bob2009

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The Pistons have played in northern Oakland County for 32 years. The fan base largely is based in the northern tier of the metro area.

The Red Wings have played downtown for 80 years, their fan base is downriver, out to the west along I-94 and even up into Macomb.

For either team to move to the other location would cause a major dislocation of its fan base. It might work if the moving team had a great year and contended for the title, but if they had a bad year (as both are having now), it could be really disastrous. Instead of 5-8,000 empty seats at games, they could have 15,000.

The assertion there is any incentive whatsoever for the Pistons to move out of the Palace is simply crazy.

The Palace has been more or less continuously renovated every single year since its opening, with several major upgrades (the glassed-in entrances, improved luxury boxes), and for all intents and purposes it is still the state-of-the-art arena in the NBA.

The Palace has never been shut down for any significant length of time for renovations, and there's never been any huge announcement about a "$200 million renovation project" -- basically the Pistons have been spending $10 or $20 million every year to keep the place up to snuff (or better).

The Pistons would never ever abandon the Palace unless attendance at Pistons games and concerts took a HUGE dive at the Auburn Hills location, and also if the real estate market in the area skyrocketed so they could make a huge amount of money off the sale of the land. Neither condition is even remotely close to reality.

Even if the Palace gave the Wings a sweetheart deal, it would be nowhere near as sweet as having their own arena downtown, enjoying all the concert revenue, etc etc.

The Palace can't stop them from building a competing arena -- only local financing hurdles will do that. If a new arena is not built, then the land Olympia Entertainment has bought up downtown adjacent to the Fox, is worthless. It's not like there are any other proposed projects clamoring to get their hands on the land. If no new arena is built, the land will sit vacant for 50 years.

Ultimately the Ilitches want a new arena built downtown in the Foxtown district. The "New Olympia" plan posted a couple pages back is very much how the completed arena will look (and in the right location). It will be an "old-style hockey arena" which will look externally much like the original Olympia and Chicago Stadium, just like Conseco Fieldhouse in Indy looks like all the old basketball fieldhouses of the 40s and 50s, but still has all the modern suites and concessions and spacious restrooms, etc etc etc. That's what "New Olympia" will look like.

The only question is how are the Wings going to get public money to get it built.

Edited by TJ

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Look, there are guys on this thread who clearly know much about the details of the Pistons and the Davidson's business empire. I respect that knowledge and value that insight. Frankly, I know next to nothing about how about they operate. But, and I'll sound like a snot by saying so, I do have an MBA and I'm an investment banker who does M&A for a living, so yeah, I passed "Business 101" 20 years and 75 or so deals ago. No one is a moron for bringing up the question and envisioning a scenario of the Pistons being downtown. I do not profess to know much about the economics of Auburn Hills as a hockey venue or Detroit as a basketball venue - there are people who are paid to analyse that. My wish that the Wings remain downtown is just that, a wish based on my personal preferences as a hockey fan. Not a business recommendation.

But I have been around long enough to know that it is not unprecedented for an organization to sell a operating company without selling the real estate along with it or without even securing a lease for the real estate. If a potential purchaser, who does not want to commit to a lease, for some reason is willing to pay 20% higher for the operating business than someone who would commit to a lease post-closing, the vendor may calculate that this 20% premium is greater than the loss of lease income (which isn't necessarily the loss of a full slate of 45 dates, if you can replace to a certain extent some of those lost dates). And there are venues across Canada and the U.S. that are viable without either a NBA or NHL franchise, including venues that used to have NBA or NHL tenants who have since left (the Pacific Coliseum in Vancouver, for example). Given the state of the Michigan economy, the number of arenas/stadiums in the area, various factors that lessen Detroit's appeal as a convention destination, and the knowledge about the Davidsons that is being shared here, I do agree that it sounds highly unlikely that the Pistons would move downtown. But geesh, the good information, without the attitude, would have been fine.

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Look, there are guys on this thread who clearly know much about the details of the Pistons and the Davidson's business empire. I respect that knowledge and value that insight. Frankly, I know next to nothing about how about they operate. But, and I'll sound like a snot by saying so, I do have an MBA and I'm an investment banker who does M&A for a living, so yeah, I passed "Business 101" 20 years and 75 or so deals ago. No one is a moron for bringing up the question and envisioning a scenario of the Pistons being downtown. I do not profess to know much about the economics of Auburn Hills as a hockey venue or Detroit as a basketball venue - there are people who are paid to analyse that. My wish that the Wings remain downtown is just that, a wish based on my personal preferences as a hockey fan. Not a business recommendation.

But I have been around long enough to know that it is not unprecedented for an organization to sell a operating company without selling the real estate along with it or without even securing a lease for the real estate. If a potential purchaser, who does not want to commit to a lease, for some reason is willing to pay 20% higher for the operating business than someone who would commit to a lease post-closing, the vendor may calculate that this 20% premium is greater than the loss of lease income (which isn't necessarily the loss of a full slate of 45 dates, if you can replace to a certain extent some of those lost dates). And there are venues across Canada and the U.S. that are viable without either a NBA or NHL franchise, including venues that used to have NBA or NHL tenants who have since left (the Pacific Coliseum in Vancouver, for example). Given the state of the Michigan economy, the number of arenas/stadiums in the area, various factors that lessen Detroit's appeal as a convention destination, and the knowledge about the Davidsons that is being shared here, I do agree that it sounds highly unlikely that the Pistons would move downtown. But geesh, the good information, without the attitude, would have been fine.

To separate the Pistons franchise and the Palace organization as a business enterprise would be nuts from both perspectives.

The whole premise is bizarro-world fantasy designed (apparently) to create some artificial urgency to build the downtown arena.

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