I mentioned in a recent comment that the Tigers were leveraged by Mike Ilitch, and that his passing probably caused the banks to put the heat on Chris Ilitch to get the payroll under control and probably pay down the debt that Mike had accumulated. I indicated I would try and post links to the sources of information that led me to that conclusion.

Here is what I can find in the public record. I do not have access to the local Detroit papers or Crain's Detroit, so if anyone can fill in or correct any details in the comments section I would appreciate it. Some of the things that have been reported by various sources are not entirely consistent in all details but they are in terms of the big picture.

Stadium Lease and Financing.

From what I can tell, the original stadium lease was signed in 1998. It provided that 38% ($115 million) of the cost of the stadium, which I take it included the cost of acquiring the property plus the cost of construction, was to be paid by the Detroit-Wayne County Stadium Authority (DDA), to be paid by a car rental and hotel tax plus some "Indian casino revenue." The remaining 62% was to be paid by Mike Ilitch. If my math is correct, the Ilitch share would have been roughly $188 million.

The lease only required a nominal $1 per year rent for the initial 35-year term, but did require the Tigers, in addition to ongoing maintenance and the like, to pay $300k per year into a "Major Repair and Replacement Fund." The DDA was also required to contribute $250k per year into that fund. I am fairly certain that fund is what has paid for the recent improvements to the stadium (scoreboard upgrade, outfield reconfiguration, etc.).

https://law.marquette.edu/assets/sports-law/pdf/ls-mlb-detroit.pdf

Some time around 1999, either Mike of the Tigers borrowed $145 million from Sumitumo Mitsui Bank to pay for part of the Ilitch share of the construction costs. That would mean that either the team or Mike himself came up with the remaining $43 mil. from other sources. Knowing how banks work, it is likely Mike personally guaranteed the loan (maybe his wife Marian as well), and it is even possible they had to pledge other assets as collateral for the loan.

In 2005, after several failed attempts, the stadium loan was refinanced for $140 mil., with a consortium of ten additional banks, including Comerica Bank, joining in as co-lenders. At the time, it was reported that the loan had been paid down by about $30 mil. (or $5 mil. per year), so apparently Mike was able to recoup $25 mil. to "help defray the extra money he put into Comerica Park when it opened and cover historical operating losses." Tigers CFO denied that any money was being drawn from the proceeds of the new loan but did not explain the discrepancy in the amounts.

At the time, it was also reported that the Tigers were carrying $73 mil. in debt from MLB's own credit facility (essentially an operating line of credit). I was not aware that MLB actually helped teams fund operating expenses, but in any event that number probably went up as the payroll increased.

https://www.sportsbusinessjournal.com/Journal/Issues/2005/09/05/Other-News/Tigers-Connect-On-Third-Try-At-Refinancing-Comerica-Park-Debt.aspx

In 1998, Comerica Bank had agreed to pay $66 mil. for the naming rights for the stadium over a 30-year term. In 2018, Comerica exercised an option to extend that contract for an additional five years, presumably at the same annual rate although I cannot find anything to verify the rate. Presumably that money has gone toward helping cover operating expenses as it does not appear to have been paid in a lump sum.

https://ballparkdigest.com/2018/01/29/comerica-park-naming-rights-extended/

There was, evidently, a second (or possibly third) refinancing of the stadium loan in 2014 or 2015. The specifics of that refinancing have not been reported that I can tell but apparently a report from Crain's Detroit Business described it as part of "a complex series of financial moves" related to the financing of the construction of Little Caesar's Arena.

https://ilitchbusiness.wayne.edu/news/comerica-park-refinancing-highlights-ilitch-financial-maneuvers-18316

Subsequent Events.

As we all know, Mike Ilitch passed away in February of 2017, and his second youngest son, Chris, assumed primary control of the various Ilitch ventures. In particular, he became the CEO of Ilitch Holdings and CEO of the Tigers and Red Wings. Ownership of the Tigers is consistently listed as simply "the Ilitch Family." Presumably, that consists, at least, of Mike's widow, Marian, Chris, and his two surviving brothers and three sisters.

During the years prior to Mike's death, the Tigers' payroll crept steadily up until, in 2016 and 2017, it exceeded the Luxury Tax threshold. Immediately after Mike's passing, then GM Al Avila began actively cutting payroll. From 2017 to 2018 the payroll was slashed from $207 mil. to $135 mil. and since then has dropped to as low as $93 mi. in 2021 before bouncing back up to $143 mil. in 2022. I know some people refuse to believe this but no matter whether you think Forbes' numbers are roughly accurate or not, by all appearances the team never has made enough money itself to support a $200 mil. payroll. The upper limit is somewhere well short of that.

So what does this suggest?

Well, first of all, Mike Ilitch was heavily leveraged at least since 1999. The increase in value of the team as well as possibly his other business interests allowed him to generate funds for team-related expenses, but he e does not appear at any point to have been able to tap into a substantial amount of liquid funds a la Steve Cohen to pay for the any shortfalls the team may have incurred, nor to pay off the loans he incurred. It was always a bit of a juggling act.

If the refinanced stadium loan had continued to be paid down at a rate of $5 mil. per year as the original loan was, at the time of Mike's passing, the amount owing would still have been at least $80 mil., depending on what happened with the "financial moves" that occurred around 2014 or 2015. Given that in the first round of refinancing the Tigers apparently borrowed an extra $25 mil. over what was owing at the time to recoup money Mike had put into the team at the time of the original loan or accrued operating expenses, it is likely that that happened again in that subsequent refinancing. So there could easily have been something north of $100 mil. left owing on that loan when it was refinanced a second time.

Mike's passing was likely an event that would allow the banks to call the stadium loan due, requiring the team to adopt austerity measures (read slash payroll) until the loans could be paid down to a satisfactory level, or even possibly paid off entirely. No one knows for sure, but the events leading up to and following Mike's death sure point in that direction. Some time around 2021-2022, things seemed to change and the team was allowed to increase its payroll back to levels more consistent with the team's likely revenue-earning capacity.

I remember the press conference at which the extension of Victor Martinez was announced. Mike Ilitch was personally present. Apparently he actually negotiated the deal himself. And he joked that he was being told he could not be spending that kind of money and pulled a $20 out of his pocket and said something like "I still have some of these." At the time, I had thought it might be Marian or Chris who was trying to rein him in, but in retrospect it sure seems as if it was his bankers that were putting pressure on him to get the payroll under control.