Open the Books: Detroit Sports Franchises Eye Big Bank from Betting
When you look at the ownership of Detroit’s four major sports franchises, it’s easy to see how the budding Michigan sports betting industry intersects with the billion-dollar business of Detroit sports.
Estimates say Michigan sports betting could generate anywhere up to to $1 billion in revenue annually all by itself.
Considering most of that will come from bets on Detroit’s four major sports franchises, the Detroit Lions, Detroit Pistons, Detroit Tigers, and Detroit Red Wings, each team’s billionaire owner is going to want a piece of that pie.
The question is: How they are going to get it?
Detroit Red Wings estimated value
Forbes Estimated Value
Last purchase price: $8.5 million in 1982
Gate receipts: $63 million
Salaries/Operating expenses: $110 million
Annual revenue: $183 million
Gaming partners: MGM Grand
Arena: Little Caesars Arena
Tigers, Red Wings hit $2 billion combined value
Any discussion of Detroit sports franchise ownership, or Michigan gambling for that matter, must begin with mention of the Ilitch family.
Any discussion of Detroit sports franchise ownership, or In case you know nothing about Detroit and its sports scene, the Ilitch family, including Marian, her late husband Mike, and their seven children now led by current Ilitch Holdings CEO and President Chris Ilitch, are the founders of Little Caesars Pizza.
They turned a small Garden City pizza joint that Marian and Mike founded in 1959 into the third-largest pizza chain in the country, behind only Pizza Hut and Dominos. Little Caesars still boasts more than $3 billion in annual revenue.
Along the way, the family purchased the Detroit Red Wings at the bargain-basement price of $8.5 million in 1982. They then turned it into one of the NHL’s most successful franchises. It’s now valued at over $800 million.
Forbes also estimates the Red Wings generate approximately $183 million in annual revenue on gate receipts of $68 million. Players’ salaries and operating expenses of less than $110 million keep the hockey team in the black as well.
Related Reading:
Detroit Tigers estimated value
Forbes Estimated Value
Last purchase price: $82 million in 1992
Gate receipts: $46 million
Salaries/Operating expenses: $170 million
Annual revenue: $276 million
Gaming partners: PointsBet
Stadium: Comerica Park
The llitch family also bought one of Major League Baseball’s most storied franchises, the Detroit Tigers.
Mike Ilitch purchased the Tigers for $82 million in 1992. He then helped move the team to a modern home at Downtown Detroit’s Comerica Park in 2000, replacing historic Tiger Stadium.
While success on the field hasn’t followed, profitability has. The Tigers are now worth $1.25 billion.
Forbes estimates the Tigers generate approximately $276 million in annual revenue on gate receipts of $46 million.
However, player salaries and operating expenses of less than $170 million keep the team quite profitable.
Related Reading:
Stadium ownership part of package; Sports betting next
Like they did with Comerica Park, the Ilitch family also entered into a public-private partnership to help build Little Caesars Arena as a new home for the Red Wings in 2017. It replaced the famed Joe Louis Arena. Little Caesars Arena also brought the NBA’s Detroit Pistons out of the suburbs from The Palace At Auburn Hills.
The Ilitch connection to the new Michigan sports betting industry is a direct one. In fact, the family also founded the MotorCity Casino Hotel in Detroit in 1999.
FanDuel Group partnered with MotorCity to launch one of Michigan’s first retail sportsbooks at the casino on March 12, 2020. The two-story sportsbook features six live betting windows and 54 IGT-powered self-service sports betting kiosks that take bets on almost everything.
Because FanDuel handles all the core services affecting betting, the sportsbook can offer action on the Ilitch-owned Tigers and Red Wings and there is not a conflict of interest.
Tigers + PointsBet; MGM+ Red Wings
The Michigan sports betting industry should grow into a powerful marketing partner for both Ilitch-owned sports franchises as well. The Tigers are already the first MLB franchise to enter into a multi-year marketing partnership with a sportsbook.
The team inked a deal with PointsBet in July 2020. The Australian-based online sports betting operator, which now has PointsBet online sportsbook in a small handful of US states, is now the team’s official gaming partner.
The team That apparently means increased fan engagement once fans are allowed back at MLB ballparks and a variety of experiences, content, and cross-promotions, including branding at Comerica Park and advertising on the Detroit Tigers Radio Network.
PointsBet is also poised to enter into the Michigan online sportsbook market when it launches. In January 2020, Pointsbet signed an exclusive agreement with the Lac Vieux Desert Band of Lake Superior Chippewa Indians to provide online sports betting, a Michigan sports betting app, and online casino gaming services to the tribe in Michigan.
The tribe owns and runs the Northern Waters Casino Resort on reservation land in Watersmeet, Michigan, and is reportedly in continued exclusive negotiations with PointsBet regarding the operation of a retail sportsbook on the property there. In fact, the Northern Waters Sports Bar on the property could soon be converted into a sportsbook as it already features 15 HDTVs for game viewing.
MGM Resorts is also an official gaming partner of the NHL and holds a specific Club Sponsorship with the Detroit Red Wings.
Detroit Lions estimated value
Forbes Estimated Value
Last purchase price: $4.5 million in 1963
Annual revenue: $411 million
Gate receipts: $56 million
Salaries/Operating expenses: $270 million
Gaming partners: MGM Grand
Stadium: Ford Field
$2.1 Billion Lions = One of least valuable in NFL
The name Ford is obviously an institution in Michigan business. It’s also an institution in Michigan sports.
Henry Ford founded the Ford Motor Company in 1903 and pioneered US assembly line car manufacturing in the Great Lakes State. More than five decades later, with the family entrenched as Michigan millionaires, his Grandchild, William Clay Ford, bought the Detroit Lions for the paltry sum of $4.5 million.
Henry Ford founded the Ford Motor Company in 1903 and pioneered US assembly line car manufacturing in the Great Lakes State. More than five decades later, with the family entrenched as Michigan millionaires, his Grandchild, William Clay Ford, bought the Detroit Lions for the paltry sum of $4.5 million.These days, the Lions are owned by the late William Clay Ford’s wife Martha Parke Firestone Ford. The franchise is widely considered one of the least valuable franchise in the NFL. However, being one of the least valuable teams in the most valuable sports has its perks. The team is still worth about $2.1 billion – more or less lockstep with the Bills and Bengals.
The Ford family entered into a public-private partnership to help build Ford Field in downtown Detroit in 2002 as a new home stadium for the Lions. The Ford Motor Company still holds the naming rights to the stadium for the next 20 years and the Ford family holds a controlling interest in the company that runs it.
The Lions have done more than their fair share of losing at Ford Field over the 18 years football has been played there, but the franchise remains profitable.
The team’s share of the NFL’s $5 billion-a-year TV deal is a big reason why. Plus, Forbes estimates the Lions generate approximately $411 million in annual revenue on gate receipts of $56 million. Player salaries and operating expenses of less than $270 million keep the team among the most profitable pro sports franchises in Michigan.
MGM Grand Detroit and the Lions
Over that same time, the MGM Grand Detroit casino has become a valued partner of the franchise. They built the MGM Grand Detroit Tunnel Club at Ford Field in 2015 providing a premium experience for fans right outside the Detroit Lions locker room.
It includes field-level seats in west end zone lower bowl, unlimited food, beverages, and corner lounge access three hours before kickoff. The Lions also offer special ticket prices to MGM MLive Rewards members for select home games.
MGM Grand Detroit launched the new Moneyline Sports Lounge in October 2019 with a plan to convert it into a sportsbook when Michigan legalized retail sports betting. The conversion became official with the launch of BetMGM Sportsbook in Michigan on March 11, 2020.
BetMGM may have lagged behind industry leaders DraftKings and FanDuel in the states where all three offer sports betting. However, BetMGM has big plans; it’s clearly spending big money on sports betting in Michigan and it is expanding to other states rapidly in an effort to compete. There’s no telling what’s next in Detroit, but a continued partnership between MGM and the Lions is expected, at the very least.
Detroit Pistons estimated value
Forbes Estimated Value
Last purchase price: $325 million in 2011
Annual revenue: $255 million
Gate receipts: $47 million
Salaries/Operating expenses: $200 million
Gaming partners: None
Arena: Little Caesars Arena
Pistons worth $1.45 Billion; Roster not so much
Tom Gores grew up in Genesee, Michigan. He became a billionaire buying unprofitable divisions of larger companies and turning them around.
After Detroit Pistons owner Bill Davidson died in 2009 the Ilitch family was approached to purchase the NBA franchise, but they were unable to get a deal done with Davidson’s widow.
Gores and his company Platinum Equity stepped in back in 2011 and bought the team for just $325 million. Gores retained a 51% interest in the team, but in September 2015, he bought Platinum Equity’s 49% stake to become the Pistons’ sole owner.
With a loyal fan base and a decent TV deal, the team is now worth more than four times what Gores and Platinum Equity paid for it at $1.45 billion. Plus, the Pistons have become a part of the modern renaissance of Downtown Detroit built around sports and casinos after moving into Little Caesars Arena in 2017.
The Pistons haven’t done much winning in the Gores era, but they are profitable and headed into a new TV deal that should make them even more so going forward, despite NBA experts like Bill Simmons recently suggesting they have the worst roster in the NBA.
Forbes estimates the Pistons generate approximately $255 million in annual revenue on gate receipts of $47 million. Player salaries and operating expenses of less than $200 million keep the team in the black.
Betting partnerships next?
The team hasn’t done much in the way of casino sponsorship since a five-year Palace of Auburn Hills supporters club naming rights agreement with Casino Windsor across the bridge in Canada back in 2007.
However, with MGM Resorts becoming the official gaming partner of the NBA, and FanDuel, DraftKings, PointsBet, and William Hill all becoming Authorized Sports Betting Operators of the NBA, Gores and the Pistons should have their choice of lucrative marketing and sponsorship opportunities going forward.
Related Articles
