SBD/December 27, 2012/Franchises

Report: Detroit Has Failed To Collect Cable TV Rights Fee From Red Wings Since '80

City of Detroit has not collected TV rights fees from Red Wings since '80
A little-known provision in Olympia Entertainment's lease of Detroit's city-owned Joe Louis Arena and Cobo Arena "promises" the city a 25% share of cable TV rights for live events, but the city "hasn't been able to collect a dime" from the owners of the Red Wings though that has been the deal since '80, according to documents cited by Christine MacDonald in a front-page piece for the DETROIT NEWS. Rough estimates last year showed the city is "owed $70 million, but a national sports economist cautioned it's likely much lower." The revelation comes as Olympia "wants to use up to $12.8 million a year in tax dollars to help fund a new downtown arena." City documents indicated that since its lease expired in '10, Olympia "hasn't paid millions of dollars for items such as rent, concessions and other revenue and property taxes." According to one document, officials in '11 "claimed the unpaid debt was $6 million that year." Negotiations on the Joe Louis Arena lease "continue," even as Olympia Development pursues a $650M mixed-use project at an undisclosed downtown location. Detroit Mayor Dave Bing last week "announced an aggressive plan to collect $50 million in delinquent taxes owed to the financially strapped city." Bing said, "If you owe money, we expect you to pay the money." City officials, who would not answer specifics about the cable revenue sharing payments, said that negotiations "are ongoing." MacDonald noted in a deal "long considered one of the best" in the NHL, Olympia pays $450,000 per year to rent the arenas, "but is expected to pay the taxes." The city has "provided free police protection, landscaping and snow removal." Although the lease expired, the Red Wings have "remained and are considered a 'holdover tenant' bound by its terms." City documents showed that the outstanding debt "is a subject of negotiations for a new lease" (DETROIT NEWS, 12/26).
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NHL, Detroit Red Wings, Franchises

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