In these recovering-but-still-rough economic times, few American cities have been hit harder than Detroit, and the Red Wings are no exception when it comes to financial peril.
When Olympia Entertainment, which managed the Red Wings, negotiated the team’s lease with Joe Louis Arena, which is owned by the city, part of the deal was that the city would receive 25 percent of the team’s cable television revenue. That agreement has been in place since 1980, but the city has collected none of that money owed, according to The Detroit News. The total amount of that cable revenue could be as much as $70 million.
This becomes an issue for at least two reasons. The first is that Detroit mayor Dave Bing has pledged to come down hard on the city’s debtors, which obviously includes the Red Wings. The other issue is that, while all this is going on, the team is trying to secure public funds for a brand-new arena.
Worse yet, it appears that Olympia Entertainment has become negligent on other bills, as well. The company has reportedly not paid things like rent and concessions since 2010 and owes the city $6 million for 2011 alone. Although the company’s lease with the city has since expired, they are known as a “holdover tenant.”
Photo via Wikimedia Commons/Joe Louis Arena
