They sold out. Not we sold out. They sold out.
Writers have always harped on how sports fans tend to refer to teams in the first person plural tense, complaining that the fans aren’t really part of the team. Today, the Red Wings proved those miserable old bastards right.
This year, there will be no Detroit Red Wings. There will, however, be the Detroit Red Wings presented by Amway.
The Red Wings have signed a contract with Amway, the Ada, Mich. based pyramid scheme, to let this company become the Red Wings’ “presenting sponsor”. That includes having Amway plastered all over every possible surface, right down to (in the words of the official team press release) “the Amway logo seen almost as prominently as the Winged Wheel in all team advertising, branding and marketing materials.”
Truly disgusting. In every sense of the word, this is a shot at the Red Wings’ fanbase. If you’re reading this, and care about the Red Wings, you should be outraged. If you don’t care about the Red Wings but still root for another team, you too should be outraged. Or if you merely care about morality in business, and where to draw the proverbial line, you must care about this story.
Allowing Amway, a pyramid scheme that preys upon the downtrodden and desperate, to graft themselves onto the Detroit Red Wings is astoundingly irresponsible.
The Detroit Red Wings are a Detroit institution. I don’t need to explain that much to you. The amount of goodwill generated by the Red Wings’ brand and logo is immeasurable. The Winged Wheel is one of the most recognizable icons of Detroit, right alongside the automobile and Motown music.
Amway has long been thought of as a scam. For decades, the company has operated by having low-level suppliers attempt to sell products at a high mark-up, then having other suppliers supply them, and so on, and so forth. That is a pyramid scheme. Furthermore, the Amway culture typically relies upon these bottom-level sellers consuming hundreds of dollars worth of motivational materials, designed to get them even more caught up in the cult of Amway. Needless to say, since the Amway scheme has generated so much criticism over the years, the company tried to rebrand itself with the name “Quixtar” in 1999, ultimately reverting back to the original Amway name in 2007.
The Red Wings referred to this as a partnership. This is not a partnership. This is one truly great entity siding with a truly despicable entity, and in the process, bringing one side down to the other’s level.
In short, here are the basic facts about this whole thing, from the Red Wings themselves. After each blockquote, my thoughts on the afore-mentioned quote.
The new agreement will involve substantial in-arena branding initiatives, as well as an eclectic mix of innovative and interactive components designed to enhance the overall fan experience at Joe Louis Arena and in the community. Some key components of the announcement today were: that the Wings Red & White preseason scrimmage will return to Van Andel Arena in Grand Rapids on Sept. 29; and Nutrilite, Amway’s sports nutrition products, will be the official vitamin and supplement of the Red Wings.
None of this enhances the overall fan experience at the Joe, unless enhancing actually means smearing a ton of Amway logos everywhere. In-arena branding isn’t an enhancement.
“The 50 year history and global success of Amway along with the elite status of the Red Wings organization are a considerable source of pride for Michiganders,” says Steve Lieberman, Vice President and Managing Director for Amway North America.
To put it bluntly, no. Amway, you are not a considerable source of pride for Michiganders. You are actually a pretty big source of shame. The world knows Michigan for cars, timber, music, furniture, and thanks to you guys in Ada, cult-like pyramid schemes.
The Red Wings, though, are a considerable source of pride for Michiganders.
In the vein of Mr. Lieberman’s quote, I’d like to congratulate myself and Justin Verlander, for our combined 20 wins pitching for the Tigers this season, and we’d like to thank you all for the support. The two of us couldn’t have done it without you.
“The logo is attached to ours when we do print advertising or if we do a television spot when they say, ‘Detroit Red Wings hockey presented by Amway’,” (Olympia Entertainment president Tom) Wilson said. “We will be joined very, very closely. It won’t impact anything other than to bring the two brands closer together. … We expect to be together for a long, long time.”
This won’t impact anything, except for that thing that everyone doesn’t want to have happen.
“What you find when you do a presenting sponsor is if you have the same type of company that has the same goals and objectives as you have, you can kind of bounce ideas off of each other, particularly when it comes to doing things out in the community,” said Tom Wilson, president of Olympia Entertainment.
Given what we know about Amway, (along with what you will read later on), how terrible is it that the president of Olympia Entertainment thinks that the Red Wings and Amway have “the same goals and objectives”? If one company is a predatory scam, and other shares the same goals and objectives, doesn’t that make the second…also a predatory scam?
“For fans it will be a season-long, sort of, unveiling of things,” Wilson said. “…So it will impact everything that we do.”
That’s later on in the article. For those keeping track, the Red Wings “partnering” with Amway means:
- Nothing will be impacted besides bringing Amway closer to the Red Wings.
- Everything that the Red Wings do will be impacted.
- Everything that the Red Wings do will be designed towards bringing Amway closer to the Red Wings.
Everything about this agreement is superficially shady. There is no real economic reason for this move, as the NHL’s financial situation has resolved itself somewhat, and there has never been any known financial difficulty for the Red Wings. Something like this has never been asked for whatsoever, and the move can only produce a backlash. And, sadly, any money coming from Amway is essentially dirty money.
First off, as mentioned earlier on, this whole thing is entirely a sellout move. There’s never been any reason to suspect that the Red Wings are in any financial trouble.
For money coming in, here are a variety of things that help the team, revenue-wise.
- The Red Wings have a well-known sweetheart lease on the Joe Louis Arena from the city of Detroit, reducing arena costs by a huge amount. Unlike many other teams, who are paying off their rink or leasing from a city, the Red Wings have been paying little to nothing for years. Sure, some revenue goes back to Detroit, but at they aren’t paying off arena debts.
- Despite all of the snide remarks over the years about the Red Wings’ attendance, our attendance in Hockeytown was third in the entire NHL last year, at a overall rate of 98.9 percent capacity. Only Chicago and Pittsburgh had a higher percentage of capacity, and both of those teams play in newer buildings.
Last season, the 2010-11 Red Wings had 28 sellouts in the regular season, including 23 straight to end the season. Overall, the Red Wings actually made attendance gains from the year before, as they averaged 19,680 fans per game (98.1% overall) instead of the 19,546 fans per game (97.4% overall) in 2009-10.
For the most part, the Red Wings have been the consistent leader in NHL attendance, year in and year out. Since 1989-90, no team has had the attendance levels of the Red Wings.
Even during the one season where the Wings were most hurt by low attendance, 2007-08, the team began rallying fans around the mid-season mark and still sold 94% of the overall tickets for the year. Also, that season ended with a Stanley Cup championship, which I’m sure helped the bottom line.
Meanwhile, over the same time, the Pistons went from 100% attendance in 2007-08, to 99.1% in 2008-09, to 84.9% in 2009-10, to 75.5% in 2010-11. And if anyone wants to complain that not everyone has shown up at the Joe, I’d invite them to check out the Palace last season.
- Last year, the NHL was getting $75 million combined from NBC and Versus, with all of that coming from Versus. NBC paid nothing, due to a revenue sharing agreement. Works out to $2.5 million per team.
Now, with a $2 billion, ten-year deal, the NHL is receiving $200 million per year. That works out to around $6.6 million per team, per year. In short, the Red Wings just got a bonus $4 million for this season.
For money going out, here is the one thing that is most obvious to fans:
- Salary-wise, the Red Wings are paying significantly less for players than before the lockout. Before player salaries were tied to revenue, here are the Red Wings’ salaries from 1997-98 to today:
1997-98 – $58,997,000
1998-99 – $47,084,000
1999-00 – $49,295,849
2000-01 – $55,207,500
2001-02 – $65,983,750
2002-03 – $72,285,506
2003-04 – $78,881,286
2005-06 – $39,400,000
2006-07 – $45,200,000
2007-08 – $44,633,000
2008-09 – $55,653,599
2009-10 – $58,827,920
2010-11 – $59,497,095
2011-12 – $58,454,545
There’s two things to take from this data. First off, with little new revenue coming in, the Red Wings cut their payroll in half after the lockout. Secondly, since the current salary cap is tied to revenue coming in, the Red Wings are still paying less than their peak of 2001-04, by almost 25%…and that total is only going up because they are making more money overall. Either way, the Red Wings are not paying as much for players, proportionally, as they did before.
In conclusion, let’s just say that the Red Wings are making money. The team isn’t hurting, financially, as they were in past years. In fact, the team is actually doing better than ever. Nothing crazy is necessary.
Now, onto this ‘presenting sponsor’ crap.
It’s stupid. So stupid. The Detroit Red Wings exist to be the Detroit Red Wings brand, not merely a subsidary for some corporation. It’s visually and creatively offensive. Every time that Red Wings fans see Amway, the team brand only goes down as a result. Ultimately, the Red Wings and the image of Hockeytown is getting mortgaged off to a very bad future.
One might look at this and think that this soon-to-be fiasco and assume that it’s a one-off mistake. I think it’s really the opposite, tracing back to a pattern from new Olympia president Tom Wilson, and coming back to the classic point of how hockey fans are not necessarily like those of other sports. Let me explain.
Tom Wilson came over to the Red Wings/Olympia last year, after 31 seasons at the Pistons. For most of that time, the Pistons did great business…when the team was winning. For some of the 1980′s, when the Pistons were not that good, business wasn’t great with the team. The Bad Boys era came up, and suddenly the team was on fire. Then, that squad evaporated, and the Pistons went back down.
At this point, we have to take a closer look. Palace management, which at some point must include Wilson, approved of every then-trendy thing to do at the time, one shortsighted patch after another. Most prominently, the team switched from its longtime red, white and blue jerseys to the 1990′s color scheme of teal, burgundy, gold and black. The logo was changed too, from a minimalist basketball to a flaming horse head. On the court, the team struggled despite superstar Grant Hill, moving through coaches quickly and constantly signing free-agents that came with big names and little talent. (The jersey was described by some as “marketing run amok” andon Yahoo’s list of the worst NBA jerseys of the last decade.) It goes without saying that the team did not make that much money. Just check out the photographed crowd in that link.
In 2001-02, the Pistons changed back to their old colors, and were in the process of rebuilding through team icon Joe Dumars. Slowly but surely, the Pistons won the 2004 NBA championship, and were selling out every night. Over that time, team management hopped on every random source of sponsorship money available. The Pistons got a “presenting sponsor”. The Palace got another atrium, this time coming covered in corporate logos. Along with the shameless money grabs, the fanbase changed too. Things simply got too corporate, too contrived. Despite the team slogan of “goin’ to work”, the fanbase seemed to now consist entirely of families on a super cheap night out, and trend-hopping teenagers already dressed and ready to leave for some trendy club in Royal Oak or something. The actual game was treated as completely irrelevant in the orgy of corporate sponsorship.
(For one introductory college class on sports and culture, the class was taken across the state to a Pistons game, and given the assignment of counting the excessive number of sponsorships. Not only did it take the majority of the game, it also hindered me from another important task, that of finding out the score of that night’s Red Wings/Dallas game, which I cared far more about than what was going on within the building. Although I was unsuccessful in getting a Red Wings game on TV at the Palace, I was able to commemorate that cross-state sports journey by spending as many weekends possible, by almost whatever means necessary, to get home to my church and the Joe Louis Arena.
Also, the Red Wings won that game 2-1, on two third-period goals by Kris Draper and Mathieu Schneider, both of which came after I was able to listen in on the radio. The game was sold out.)
In the last couple years though, the Detroit Pistons have fallen off the map locally. The team suddenly wasn’t ‘hot’ any more, and all those trendy kids went away. The Pistons’ roster, devoid of national superstars but always winning, was symbolically gutted when team captain Chauncey Billups was traded for malcontent star Allen Iverson in November of 2008. The Pistons went straight into the toilet since, and have not recovered; just check out those attendance numbers above. The team owner, Bill Davidson, passed away, and his wife sold the team off as soon as she could. Now, the NBA is in a lockout, as so many teams are losing money.
Look, I’m sure that there are many reasons as to why the Pistons went downhill. There’s lots of blame to go around. But at the end of the day, the team went from the business of winning basketball to the business of shilling for a sponsor. Unfortunately, no sports fan is coming to games for the sponsorships, and when the core product of sport was lost track off, everything fell apart.
That’s why Tom Wilson’s quote above has to be troubling. If Amway is there to impact everything that the Red Wings do, the constant drumbeat for Amway can only distract from the pursuit of the Stanley Cup. When the outside marketing becomes the focus of the product instead of the actual thing, the product dies. It happened with the Pistons, from the “Teal Era” and Grant Hill, to the recent downfall with Allen Iverson. The cycle has come around twice for the Pistons, and we’ll see if it ever goes back up again.
Meanwhile, the Red Wings are the most consistent sports franchise of the last 20 years. The team doesn’t market on sizzle, it markets on the steak of winning hockey. And of that ever changes, that consistency goes away in a flash, never to completely return.
There’s some among us that think of sponsorship as ‘progress’. ‘It’s where we’re going after all!’, they say. ‘The Pistons do it. There’s sponsors on jerseys in soccer. What’s wrong with the Red Wings doing it?’
On the initial level, just because everyone is doing something idiotic, that doesn’t mean you have to.
But on a deeper level, even if you assume that this kind of thing is alright, there’s an additional level of scum with this one. The Red Wings are partnering with Amway, a company that is shady to say the least.
Amway is a direct-selling, multi-level marketer. What that means is Amway sells products through many levels of individuals, directly to each one. Instead of buying a product at a store, you have to buy Amway products through one of these distributors at the bottom level or so. There’s also levels of distributors, with one level supporting the weaker level below it, and so forth, stretching down from the top of the company.
In short, it’s a pyramid scheme.Here’s a Federal Trade Commission testimony on them, which does mention Amway in great detail. And according tosources, such a thing is borderline illegal and always immoral.
Product-wise, Amway distributors make very little money. On average, 98% of Amway products are sold only to other Amway members, and according to1991 article from Paul Klebniov of Forbes Magazine, every Amway member makes about $700 for every $1000 they spend on Amway products on top of whatever costs they accumulate while trying to push product. The great majority of the money goes to those only at the very top, about the top 2%. Everyone else either breaks even, or more commonly, loses money.
Now, where does the real money come from? According to Klebniov, the real money comes from low level members buying hundreds or thousands of dollars worth of motivational material, or going to motivational conferences around the country. Those are all very expensive, and promise the world – a mansion! a sports car! a yacht! – if you just work hard enough with Amway.
This is where the fundamental problem, ethically, comes into play. It’s not just that Amway is a company designed to fleece money via a pyramid scheme. It’s also that, after setting up a system designed to get people to lose, Amway has them spending more than ever before under the guise of business secrets but instead is simply convincing them that it’s not the system’s fault, it’s their own. From a very old website,on how harmful Amway can be to the psyche.
Amway, in short, is a scheme designed to get people thinking that they can make great money by just doing one simple thing, but when that thing doesn’t work out, it’s only their fault. They are the failures, and not the company that spat them out.
Here’s where the Red Wings are truly being irresponsible. Detroit is hurting right now. Everyone can see that. The Red Wings’ slight attendance hit in 2007-08, as mentioned above, was largely blamed on a struggling economy where so few have jobs. 24% of the workforce has left Michigan in the last decade, and the umployment rate went from 3.3% in March of 2000 to 14.1% in August of 2009.It’s now at 10.9%. There are lots of desperate, hurting people out there. And that demographic is absolutely perfect for Amway to chew up.
By putting Amway in such a prominent position on the Red Wings, the team is putting its own fanbase in harm’s way. And that is truly the most terrible thing of all.
This whole thing, in some part, is just marketing run amok.
The thing is, it wasn’t always this way for the Red Wings. Back in 1997, the Red Wings were looking to come up with some slogan that would encapsulate the excitement around the team and the city. Wings World? Too narrow. Hockey Heaven? Still no Stanley Cup. Hockeytown? Just right. It wasn’t just that the Red Wings were about to win Detroit’s first Cup in 42 years…it was the University of Michigan defending the NCAA title, it was the Detroit Vipers going for the IHL’s Turner Cup. It was lakes full of kids and adults playing hockey all winter, it was the newly built local arenas all around the city. Sure, the Red Wings were the center and the catalyst, but it wasn’t all at the Joe.
Hockeytown is us, fellow Red Wings fans. The Red Wings are us. Without the fans, there is no team. Without everyone supporting the team, the Red Wings go nowhere.
It goes without saying that I include myself in that count. If anyone has somehow been attached to the Red Wings, it’s me. I’m named after a Red Wing, for crying out loud. Yes, that Gordon is after the great Gordie Howe. When I was born, the birth announcement read “We are proud to announce the arrival of our little hockey player!” That announcement is signed by Gordie Howe (“Love the name, best wishes, Gordon Howe), and framed with a picture of a newborn me in the hospital crib, mini Red Wings stick in hand.
When it’s my birthday, my dad and I go to the Joe, for 23 years and counting (including the game for my 9th birthday LINK HERE). I’ve been to four Stanley Cup parades, too many games to mention, and spent even more time than that invested in this team. For that matter, I spent my night writing this up, when I assuredly had more pressing matters, because I love the Detroit Red Wings.
And I am considerably less interested in the Red Wings now than I was twelve hours ago.
What does that say for the rest of the Red Wings’ fanbase? If I feel disenchanted by this move, what about everyone else? Never in my life have I ever had a moral problem with the Detroit Red Wings, not until tonight. For me, that might mean less time going to games, and less energy invested in the team overall. For a more casual fan, the Red Wings might go from a passion to simply another thing to do. And for the extremely casual fan, well, how about those Lions? And those Tigers? When your fanbase is alienated, they don’t come back easily. And when they do, it’s never as intense as it was before.
Where is Mike Ilitch? Why was he not there for this terrible, terrible day in team history? How can a team sour itself in the eyes of so many, so quickly, without someone speaking up?
Do the right thing, Red Wings. Drop this ‘presenting sponsor’ business. You guys have no benefit whatsoever, in the long-term. All this does is drive away your loyal customers for a cheap buck, a dirty buck no less. Do the right thing. And deep down, somewhere in the hearts of someone at the Joe Louis Arena, you guys know what that right thing is.
About the Author: Gordon is currently looking to enter the world of journalism, while spending his free time at either the University of Michigan or the Joe Louis Arena.