Monday, August 9, 2010

Assessing the Pizza Man

Reports indicate that Mike Ilitch, owner of the Detroit Red Wings and Detroit Tigers (and founder of the Little Caesar's empire), may be interested in buying the Detroit Pistons from the Davidson family. As an ex-Detroiter, I am not sure how to take this. On one hand, Ilitch has a reputation as a "good" sports owner, one who treats his players and fans well and invests in the team. As we discussed last year, many owners take profits as the only input to their objective function, but Ilitch recognizes the role that major sports teams play in a community.

On the other hand, will it be healthy if Ilitch controls nearly all live entertainment in Detroit? Ilitch already owns two sports teams, MotorCity Casino, Cobo Arena, City Theatre, and the Fox Theater. Ilitch also operates the Joe Louis Arena and Comerica Park. If Ilitch grabs the Davidson holdings as well, he will control the Detroit Pistons, Palace of Auburn Hills, DTE Energy Music Theater, and Meadow Brook Music Festival (where my high school held its annual graduations). As all these entities and venues are potentially in mutual competition for entertainment seekers, the unification thereof under one umbrella cannot be good for consumers. It's bad enough that Live Nation and Ticketmaster want to merge.

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