DETROIT — The Detroit Red Wings are hoping to play in a new arena soon, not far from where the Tigers are defending their American League title and the Lions will soon start another football season.
All this in a city that is filing for bankruptcy, a decision that follows years of decline. Detroit owes billions to creditors and its revenues, like its population, drop each year.
Yet it’s been largely business as usual on the ice and the playing field. The bankruptcy filing Thursday left the region a bit shaken, but the professional sports teams might be spared any dramatic impact.
“We remain confident in the city of Detroit and in its future,” the Lions said in a statement Friday. “We do not anticipate that yesterday’s announcement will have any impact on Lions home games or our many other events at Ford Field.”
Spokesmen for the Red Wings and Tigers both declined comment, not wanting to speculate in the immediate aftermath of the largest bankruptcy protection request in U.S. history.
But a $650 million arena planned for the Red Wings? That can still become a reality, according to Brian Holdwick, an executive vice president for the Detroit Economic Growth Corp.
Plans for an 18,000-seat arena were announced by the team’s owners and local economic development officials in June, although the new proposal still needed to be approved by the City Council and a handful of state and local agencies. The Red Wings said there will be $367 million in private investment and $283 million in public funds in the complex, which would also include residential, retail and office space.
Spending that kind of money on an arena – in a city where bankruptcy could mean laying off employees and scaling back basic services – could draw some public resistance. Holdwick said funding for the project would come from tax increment dollars that can’t be used by the city’s general fund anyway, so it’s not necessarily a zero-sum game between building an arena and easing Detroit’s financial pain.
Holdwick says money for the arena would go back to the state if not used for development downtown.
“I think there’s a lot of reasons why the city should be supportive,” Holdwick said. “I can’t, obviously, predict what they’ll vote.”
Even while playing in aging Joe Louis Arena, the Red Wings have been a model franchise. “Hockeytown” has been in the playoffs every season for more than two decades and the team has won four Stanley Cup championships since 1997.
The Tigers and Lions have become pretty stable, too. They began playing in downtown stadiums across the street from each other in 2000 and 2002.
Downtown Detroit’s trio of teams – as well as the NBA’s Pistons, who play in suburban Auburn Hills – have had no trouble drawing fans when they’ve been winning.
The Tigers, who are trying for their third consecutive AL Central title, ranked eighth in baseball in average attendance at this year’s All-Star break, according to STATS.
That’s in a city where the financial challenges have piled up for years. Detroit lost a quarter-million residents between 2000 and 2010. Today, the population struggles to stay above 700,000.
If the area’s teams have been able to survive that exodus – even thrive in it – they might not be affected much by the bankruptcy filing, said Andrew Zimbalist, a sports economist at Smith College.
“They have strong ownership groups. It seems to me that they’re going to be OK,” Zimbalist said. “The extent to which they’re not OK – that would have been revealed already.”
Tigers owner Mike Ilitch has been willing to inflate the team’s payroll recently, presenting Detroit fans with a roster full of some of the game’s brightest stars, like Justin Verlander and Miguel Cabrera. Ilitch also owns the Red Wings.
The Lions have been considerably less successful on the field, stumbling to the NFL’s first 0-16 record only a few years ago. But as Zimbalist pointed out, revenue sharing in the deep-pocketed NFL – which signed a nine-year, $27 billion TV rights deal with the networks in 2011 – can help teams overcome challenges their local markets present.
And like so many NFL teams, the Lions still draw big crowds for their eight home games. Last August, Forbes valued the team at $855 million. That put the Lions near the bottom of their league, but they were still assigned a higher value than the Tigers, who at $643 million ranked 13th in baseball before the start of this season.
Gov. Rick Snyder has said the bankruptcy process would offer a more certain path for creditors, who don’t know how much or whether they will be paid. Holdwick said the city does not make ongoing contributions to debt service on Ford Field and Comerica Park. The Downtown Development Authority pays $350,000 a year to Comerica Park for maintenance and capital improvement.
There’s concern that a bankrupt Detroit could cause businesses large and small to reconsider their operations in the city, but General Motors said it does not anticipate any impact to its daily operations. The Lions sought to sound the same refrain Friday.
“Our top priority remains providing all Lions fans and Ford Field patrons with a safe and optimum experience,” they said.
While the city tries to figure out a path forward, the games will go on.