It’s arguably the worst arena in the NHL, both in terms of generating revenues and satisfying fans. The Detroit Red Wings, though, are stuck with Joe Louis Arena for now — but there are other scenarios for the future of the team’s home.
The Red Wings are expected to sign a new multiyear lease for Joe Louis Arena sometime in the next few weeks; it’s a foregone conclusion will be playing downtown for at least two years, if not three. Mike Ilitch’s other sports-business enterprises are centered in downtown, and he’s made an admirable commitment to the city, despite the Tigers’ abandonment of Tiger Stadium.
But it’s also clear the writing is on the wall regarding the future of Joe Louis Arena, clearly on its last legs as as economically functional NHL arena. True, it’s old school, but not old school in a good way. The concourses are cramped, access is limited, suites are nonexistent, and amenties are few. It was designed during a time when hockey fans were expected to stay in their seats and head to the concourse for a beer between periods.
The truism in arena economics is that very few major metro areas can financially support two major arenas; cities smaller (Minneapolis-St. Paul) and larger (Boston, Chicago) prove this point regularly. The greater Detroit area has two major arenas — the Palace of Auburn Hills and Joe Louis — as well as a minor one in Cobo Hall.
And it’s not entirely sure the Detroit area could handle a brand-new, state-of-the-art arena to compete with the Palace, which tends to get larger tours by default. But that’s not the biggest issue facing Red Wings management: Coming up with some sort of funding place for a new $400-million arena. The city is past broke, the state is struggling, and it’s highly unlikely Ilitch would pony up all the money on his own. That’s why the Red Wings are committing to the Joe for the next several years.
Beyond that, there are a few options.
Move to the Palace at Auburn Hills as a way to push government toward a new downtown arena. There, the team would be a secondary tenant to the Detroit Pistons. We’re not sure there’s a large enough pie to satisfy everyone. Still, as a short-term move while a new arena is being built, this makes sense if you’re talking about real threats.
Buy the Pistons and the Palace at Auburn Hills. Ilitch has shown an affinity for downtown Detroit, but the better business move may be to buy the Pistons and the Palace and combine operations. That means the team moves to the suburbs.
Buy the Pistons and move them to a new downtown arena. We’re not sure the Palace at Auburn Hills is worth a whole lot apart from the Pistons, but there’s talk that the team may be on the market on its own. Moving the Pistons back into town would surely excite Mayor Dave Bing and give some needed momentum toward a new arena.
Stay at the Joe. Forever? Maybe.
None of these options are inexpensive. Buying the Pistons and the Palace makes some sense if you can squeeze some operating efficiencies out of the arrangement, and it gives Ilitch de facto control of the Detroit sporting market. But something needs to happen, and it needs to happen soon.
