In bankrupt Detroit, the games will go on

Associated Press photo by CAROLS OSORIO -- Storm clouds approach the city of Detroit on Tuesday, two days before it became the largest city in U.S. history to file for bankruptcy.
Associated Press photo by CAROLS OSORIO -- Storm clouds approach the city of Detroit on Tuesday, two days before it became the largest city in U.S. history to file for bankruptcy.

DETROIT — The Detroit Red Wings are hoping to play in a new arena soon, not far from where the Tigers are defending their American League title and the Lions soon will start another football season.

All this in a city that is filing for bankruptcy, a decision that follows years of decline. Detroit owes billions to creditors, and its revenues, like its population, drop each year.

Yet it has been largely business as usual on the playing field. The bankruptcy filing Thursday left the region a bit shaken, but the professional sports teams may be spared any dramatic impact.

“We remain confident in the city of Detroit and in its future,” the Lions said in a statement Friday. “We do not anticipate that yesterday’s announcement will have any impact on Lions home games or our many other events at Ford Field.”

Spokesmen for the Red Wings and Tigers declined comment, not wanting to speculate in the aftermath of the largest bankruptcy protection request in U.S. history. But that $650 million arena planned for the Red Wings? That can still become a reality, said Brian Holdwick, an executive vice president for the Detroit Economic Growth Corp.

Plans for an 18,000-seat arena were announced by the team’s owners and local economic development officials last month, although the new proposal still needed to be approved by the City Council and a handful of state and local agencies.

The Red Wings said there will be $367 million in private investment and $283 million in public funds in the complex, which would also include residential, retail and office space.

Spending that kind of money on an arena — in a city where bankruptcy could mean laying off employees and scaling back basic services — could draw public resistance. Holdwick said funding would come from tax increment dollars that can’t be used by the city’s general fund, so it’s not necessarily a zero-sum game between building an arena and easing Detroit’s financial pain.

Holdwick said money for the arena would go back to the state if not used for development downtown.

“I think there’s a lot of reasons why the city should be supportive,” Holdwick said. “I can’t, obviously, predict what they’ll vote.”

Even while playing in aging Joe Louis Arena, the Red Wings have been a model franchise. “Hockeytown” has been in the playoffs every season for more than two decades, and the team has won four Stanley Cup titles since 1997.

The Tigers and Lions have become stable, too. They began playing in downtown stadiums across the street from each other in 2000 and ’02.

Downtown Detroit’s trio of teams — as well as the NBA’s Pistons, who play in suburban Auburn Hills — have no trouble drawing fans when they’re winning. The Tigers, trying for their third straight AL Central title, ranked eighth in baseball in average attendance at the All-Star break.

That’s in a city where financial challenges have been piling up for years. Detroit lost a quarter-million residents between 2000 and 2010. Today, the population struggles to stay above 700,000.

If the area’s teams have been able to survive that exodus — even thrive in it — they may not be affected much by the bankruptcy filing, said Andrew Zimbalist, a sports economist at Smith College.

“They have strong ownership groups. It seems to me that they’re going to be OK,” he said. “The extent to which they’re not OK — that would have been revealed already.”

Tigers owner Mike Ilitch has been willing to inflate the team’s payroll, presenting Detroit fans with a roster full of some of the game’s brightest stars. Ilitch also owns the Red Wings.

The Lions have been less successful, stumbling to the NFL’s first 0-16 record only a few years ago. But as Zimbalist pointed out, revenue sharing in the NFL — which signed a nine-year, $27 billion TV rights deal in 2011 — can help teams overcome challenges their local market’s struggles.

And like so many NFL teams, the Lions still draw big crowds for their eight home games. Last August, Forbes valued the team at $855 million. That put the Lions near the bottom of their league, but they were still assigned a higher value than the Tigers, who at $643 million ranked 13th in baseball before the start of this season.

There’s concern that a bankrupt Detroit could cause businesses large and small to reconsider their operations in the city, but General Motors said it does not anticipate any impact to its daily operations. The Lions sought to sound the same refrain Friday.

“Our top priority,” they said, “remains providing all Lions fans and Ford Field patrons with a safe and optimum experience.”