Mike Ilitch: “Is he, or isn’t he” a billionaire casino mogul, people want to know
Ok, so as is the case with many folks who make it onto the back half of Forbes’ annual list of the "400 Richest Americans," you come and you go ... and you come, and you go.
Mike Ilitch, of Little Caesars pizza fame, is one such character. Over the last decade he has made the list five times and including a return to the 2006 list following a one year hiatus at #242 (sharing the spot with Oprah Winfrey). With the return he breaks into the top 300 for the first time and represents he is joining the “Billionaires Club.”
Forbes estimates Ilitch’s 2006 net worth to be $1.5 billion, twice that reported by Forbes in 2004 , the last time he was on the list. And twice that reported by Forbes a year earlier as part of its 2005 rankings of (Valuation) Major League Baseball franchises.
Sure, Ilitch’s Stanley Cup champion Red Wings hockey team returned to the ice during his Forbes hiatus.
And sure, his beloved Detroit Tigers baseball team unexpectedly made the 2006 play-offs for the first time in nearly 20 years, won the American League Championship and advanced to the World Series, but on a venture that Forbes estimates has a 73% debt-to-value ratio and annual operating income of approximately $3.5 million, this recent blip of success certainly can not account for Forbes’ doubling its estimate of Ilitch’s net worth estimate. After all, Forbes says of the Tigers, it is “hardly a stellar investment" and indicates the team in 2006 is worth little more than it was in 2000.
The only signific
ant change at Ilitch Holdings, Inc. since 2004 was the acquisition of Mandalay Resort Group’s 53% ownership interest in Detroit’s MotorCity Casino, and advances with other casino ventures. Previously it was understood Marian Ilitch held 25% interest in the MotorCity Casino.
But here’s the kicker … Michael Ilitch swears he has no financial interest in any gambling ventures or casinos; after all, it would be a violation of MLB prohibitions. Ilitch publicists and attorneys have vehemently denied any representations to the contrary and have been quick to set the record straight.
Certainly the editors of Forbes’ annual list are aware of Major League Baseball’s gaming prohibitions and the controversies that first beset Ilitch when it became public ten-years ago that his wife Marian had a financial stake in MotorCity Casino.
The editors must know it is not Mike but rather Marian Ilitch who "independently" (without direction from, or benefit to Mike) has made significant investments in gaming and casino ventures (Global Gaming, a leading industry publication, ranked Marian Ilitch #1 on its list of the "Most Powerful People to Watch" in 2006); and while Marian does have an interest in the Red Wings hockey franchise, she has sworn absolutely no financial stake or interest in the Tigers baseball franchise -- except, of course, that she owns and manages all the concessions and parking at Comerica Park.
One has to wonder if the Ilitch attorneys and publicists are demanding a correction from Forbes with the same aggressive posture and passion they’ve taken previously to explaining and defending their client's situation. Allowing ambiguity on this topic in the Ilitch organization can only ensure controversy will prevail and questions will continue.
Either Forbes misrepresents that Mike Ilitch – not Mike & Marian Ilitch; the Ilitch Family, etc. – is among the "400 Richest Americans" and a member of the “Billionaire’s Club;” or Mike Ilitch hasn’t been truthful in representations denying any financial interest in MotorCity Casino or any of other gambling ventures that have attracted his wife Marian.
Is Mike Ilitch a billionaire or not? It's not so much the answer people want to know as it is the implications of the answer.
By their own “black & white” representations, both Marian and Mike Ilitch are millionaires -- and by Forbes' estimates it looks like Marian Ilitch might actually be the wealthier of the two. If they want to eliminate or even limit ongoing controversy surrounding Ilitch ownership of a MLB franchise concurrent with ownership of one of the largest commercial casinos in the U.S., they should demand Forbes make a correction and remove Mike Ilitch from its 2006 list of the "400 Richest Americans. "
Either he is, or he isn’t, one of the "400 Richest Americans" – there should be little room for grey; and certainly responsibility for that starts with Mike and Marian Ilitch.
originally posted 12/4/06
Ok, so as is the case with many folks who make it onto the back half of Forbes’ annual list of the "400 Richest Americans," you come and you go ... and you come, and you go.
Mike Ilitch, of Little Caesars pizza fame, is one such character. Over the last decade he has made the list five times and including a return to the 2006 list following a one year hiatus at #242 (sharing the spot with Oprah Winfrey). With the return he breaks into the top 300 for the first time and represents he is joining the “Billionaires Club.”
Forbes estimates Ilitch’s 2006 net worth to be $1.5 billion, twice that reported by Forbes in 2004 , the last time he was on the list. And twice that reported by Forbes a year earlier as part of its 2005 rankings of (Valuation) Major League Baseball franchises.
Sure, Ilitch’s Stanley Cup champion Red Wings hockey team returned to the ice during his Forbes hiatus.
And sure, his beloved Detroit Tigers baseball team unexpectedly made the 2006 play-offs for the first time in nearly 20 years, won the American League Championship and advanced to the World Series, but on a venture that Forbes estimates has a 73% debt-to-value ratio and annual operating income of approximately $3.5 million, this recent blip of success certainly can not account for Forbes’ doubling its estimate of Ilitch’s net worth estimate. After all, Forbes says of the Tigers, it is “hardly a stellar investment" and indicates the team in 2006 is worth little more than it was in 2000.
The only signific
ant change at Ilitch Holdings, Inc. since 2004 was the acquisition of Mandalay Resort Group’s 53% ownership interest in Detroit’s MotorCity Casino, and advances with other casino ventures. Previously it was understood Marian Ilitch held 25% interest in the MotorCity Casino.10.09.06
Forbes
. . . Now he's rolling the dice on casinos. Grand River Avenue is certainly not the Strip. Still, there's life in Detroit's three gambling palaces, which raked in $1.2 billion in revenue last year and have been growing at 4% compounded annually, compared with 12% year-over-year for Vegas, reports Moody's Investors Service.
Michiganders, who once flocked to nearby Canadian slots, are now, apparently, staying home.
The Ilitches placed their first bets a decade ago by backing a referendum to legalize gaming. (It passed.) To give form, if not substance, to a Major League Baseball rule banning joint ownership of baseball and gambling, Marian, who owned none of the Tigers, bought a 25% stake in MotorCity and held it separately from the other Ilitch businesses.
Mandalay Resort Group ran the casino and was the majority partner. But last year Mandalay needed out because it was merging with MGM Mirage (mgm: NYSE - news - people ), which had to trim its casino assets in Detroit.
To acquire 100% of MotorCity, Marian, long considered the family's financial brains, borrowed $950 million: $300 million in junk bonds, yielding 8%, and $650 million in fixed- and variable-rate bank debt.
There is little room for error.
Last year MotorCity pulled in $125 million Ebitda on revenue of $432 million. Annual debt service totals $70 million or so. Moreover, the casino is undergoing a $275 million expansion, $225 million of that in bank debt and bonds, to blow out the existing 75,000 square feet of tables and slots and add 400 hotel rooms, a restaurant, a spa and additional parking. MotorCity's bottom line will be helped by 2008, when the casino's state and city gaming tax declines to 21% from 26%, part of a deal Marian struck last year.
Analysts believe the casino's Ebitda could hit $180 million a year within two years. But that probably requires getting more slots players from outside Detroit--and spending more on marketing.
Whatever the long odds, Marian has already shelled out around $10 million to buy up land and explore management contracts for proposed Indian casinos in Barstow, Calif. and on New York's Long Island. Those iffy projects are still years off.
http://www.forbes.com/forbes/2006/1009/068.html
But here’s the kicker … Michael Ilitch swears he has no financial interest in any gambling ventures or casinos; after all, it would be a violation of MLB prohibitions. Ilitch publicists and attorneys have vehemently denied any representations to the contrary and have been quick to set the record straight.
Certainly the editors of Forbes’ annual list are aware of Major League Baseball’s gaming prohibitions and the controversies that first beset Ilitch when it became public ten-years ago that his wife Marian had a financial stake in MotorCity Casino.
The editors must know it is not Mike but rather Marian Ilitch who "independently" (without direction from, or benefit to Mike) has made significant investments in gaming and casino ventures (Global Gaming, a leading industry publication, ranked Marian Ilitch #1 on its list of the "Most Powerful People to Watch" in 2006); and while Marian does have an interest in the Red Wings hockey franchise, she has sworn absolutely no financial stake or interest in the Tigers baseball franchise -- except, of course, that she owns and manages all the concessions and parking at Comerica Park.
One has to wonder if the Ilitch attorneys and publicists are demanding a correction from Forbes with the same aggressive posture and passion they’ve taken previously to explaining and defending their client's situation. Allowing ambiguity on this topic in the Ilitch organization can only ensure controversy will prevail and questions will continue.
Either Forbes misrepresents that Mike Ilitch – not Mike & Marian Ilitch; the Ilitch Family, etc. – is among the "400 Richest Americans" and a member of the “Billionaire’s Club;” or Mike Ilitch hasn’t been truthful in representations denying any financial interest in MotorCity Casino or any of other gambling ventures that have attracted his wife Marian.
Is Mike Ilitch a billionaire or not? It's not so much the answer people want to know as it is the implications of the answer.
By their own “black & white” representations, both Marian and Mike Ilitch are millionaires -- and by Forbes' estimates it looks like Marian Ilitch might actually be the wealthier of the two. If they want to eliminate or even limit ongoing controversy surrounding Ilitch ownership of a MLB franchise concurrent with ownership of one of the largest commercial casinos in the U.S., they should demand Forbes make a correction and remove Mike Ilitch from its 2006 list of the "400 Richest Americans. "
Either he is, or he isn’t, one of the "400 Richest Americans" – there should be little room for grey; and certainly responsibility for that starts with Mike and Marian Ilitch.
originally posted 12/4/06
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