Marian Ilitch, high roller - Saturday 12th of March 2005

After years of financial savvy behind the scenes, she moves out front with MotorCity Casino

 

If Detroit businesswoman Marian Ilitch succeeds, as appears likely, in winning a controlling share in the MotorCity Casino, she will cap a drive to power and success that began in the most unlikely way more than 45 years ago.

 

Her husband, Mike, has told the story numerous times. It was 1959, and he and Marian had just opened their first pizza restaurant in Garden City outside Detroit. Mike was so giddy that he gave away the first meal. Then he handed out the second order for nothing. Mike was about to give away yet another freebie when Marian stepped in, ordered Mike back into the kitchen, and collected the cash from the customer.

It's been that way ever since. If Mike is the more famous of the pair, it's Marian's tough-minded financial discipline that by all accounts built their first store into a billion-dollar pizza, sports and entertainment empire. That empire now includes Little Caesars, the Detroit Tigers and Detroit Red Wings, and the Fox Theatre, among many enterprises and venues.

 

Assuming the Michigan Gaming Control Board approves her application to buy a controlling interest in MotorCity Casino -- a property valued at roughly $1 billion that produced $436 million in revenue in 2004 -- Marian Ilitch, who turns 72 this year, will come more out of the shadows and cements her role as one of the wealthiest and most powerful women in Detroit's business history.

 

But with wealth has come controversy. A spokesman dismissed requests for interview time with her for this article. Minority partners in MotorCity Casino sued Ilitch over her buyout deal, claiming she betrayed their interests.

 

Lawsuits over the years with Little Caesars franchisees have marred the company's success. A succession feud split the Ilitch family last year, forcing Marian and Mike, who is 75, to choose between two of their children to run the company.

 

By many accounts, Marian Ilitch's temper can be formidable. One prominent Detroiter describes a meeting in which her tone was "clipped, very abrupt, very curt, just sort of screaming."

 

A former employee of the Ilitch organization recalls how top management would confiscate copies of local news publications from the mailroom and even employees' desks if they carried stories unfavorable to the Ilitches or their companies.

 

"It's standard practice," confirmed a current employee. "It's as if the news doesn't exist, because it's not in the building anymore."

 

Even the Ilitches' most notable civic accomplishment, their dedication to rebuilding Detroit's downtown theater district, has not been free of criticism. Development insiders charge the Ilitches drag their feet on efforts such as fixing up eyesore buildings they own.

 

Some complain about the Ilitches not even returning phone calls from developers hoping to buy and redevelop the dilapidated Madison-Lenox Hotel, which the Ilitches want to demolish for a parking lot.

 

"There's flawed greatness," said the prominent Detroiter, who knows and admires the Ilitches. "There's just a discomfort in moving outside the family to accomplish things, in expanding the circle too far. At some point, you've go to let go and build alliances that are lasting with others to accomplish things. There could have been much more of that."

 

This individual, asking not to be named because of ongoing relationships with the family, added, "They will go to extreme lengths to support people they consider one of their own. It's just that that's a pretty small circle."

 

No one would have pegged Marian Ilitch for financial stardom. She never went to college. She met her future husband on a blind date in 1954 when she was working as a reservations clerk for Delta Air Lines. A few years later, Mike Ilitch, a one-time minor league baseball player and an ex-door-to-door salesman, decided to put their $10,000 savings into a new fad -- pizza. She agreed.

 

They had a knack for the business. They parlayed hands-on management and an eye for details into a spreading franchise network. Over a period of 30 years, the Little Caesars brand came to include more than 4,000 outlets. Thousands of locations were added during an explosion of growth in the 1980s and early '90s.

 

In the early years, Marian Ilitch also bore seven children, four of whom eventually worked in the family business. She didn't let childrearing stop her involvement in the company, in which she has long carried the catch-all title of secretary-treasurer.

 

People who known the Ilitches credit Marian with an essential role in building the empire.

 

"He was the visionary," said George Goulson, a food service executive who worked for the Ilitches from the mid-80s through the mid-90s. "One of his strengths, to this day, he knows what's coming. He was always good at that. But once he decided to move forward, he left the details to her. She was excellent at that. There's no question about that. She protected the family's interests."

 

As their daughter Denise told an interviewer in 1992, "He brings the sales in the door, she tries to hang on to some of it."

 

Marian Ilitch's financial skills were self-taught, learned by poring over each and every financial statement. At business meetings she would show up with green ledger paper and take notes on the finances. She asked multiple questions, not stopping until she was satisfied.

 

As the tech age approached, she urged new franchisees to keep their books by hand at least for the first year, telling them, "You don't feel the business as well" with a computer, according to a 1992 New York Times article.

 

The atmosphere around the headquarters was informal, up to a point.

 

"They called him M.I. and she was Marian, unless you were afraid of them, and then you called them Mr. and Mrs. Ilitch," Goulson said.

 

But everyone agrees Marian was at least an equal partner with Mike, if not the controlling figure.

 

"She's absolutely the driving force behind Ilitch Holdings," said the former employee. "She works when she's not there. She works from home. She works from Boca Raton. She has energy that belies her 70 years."

 

Most telling of all, control of the spreading Ilitch empire never really went beyond the family itself.

 

"They used to joke they had their board meeting every Sunday around the breakfast table, and that's probably the truth," Goulson said.

 

For a long time, it all worked. Mike had a flair for new ideas, like the conveyor oven that cooked multiple pizzas more easily than a conventional oven. Most famously, they created the "Pizza! Pizza!" two-for-one promotion. Mike's vision and Marian's financial skills built Little Caesars into the industry's third-largest pizza concern, behind Pizza Hut and Domino's.

 

They branched out. Mike and Marian bought the Detroit Red Wings in 1982 and the Detroit Tigers in 1992 (buying the Tigers was Mike's idea, but Marian negotiated the details).

 

At their children's urging, they bought Detroit's once-proud Fox Theatre, and poured millions of dollars into a restoration.

 

Marian and Mike became heroes of Detroit's redevelopment. In the late '80s, they had already broken ground in Farmington Hills on a new corporate headquarters, holding a ceremony in which an Eastern Orthodox priest blessed the ground and Red Wings players chatted with visitors under a big tent. But they scrapped those plans and moved their headquarters instead into the Fox Theatre building -- the first major suburban firm to move downtown.

 

A string of Stanley Cup victories for the Red Wings seemed to cap it all.

 

But the empire was prone to missteps. To save money Little Caesars stopped national advertising. The Ilitches decided to switch to frozen dough and a cheaper type of cheese, lowering the quality. Sales fell off. A group of franchisees sued in the early '90s. The upstart Papa John's chain passed Little Caesars for third place in the industry.

 

As the troubles mounted, the Ilitches closed hundreds of stores and reorganized the company.

 

Today, Jeremy White, executive editor of the trade journal Pizza Today, estimates Little Caesars has about 3,700 stores, mostly franchises, and about $1.5 billion a year in sales. But it's hard to say for sure because of the intense secrecy maintained by the family-owned business.

 

Attempts at opening up the business to outsiders often failed miserably. In 1999, the Ilitches hired two top outside executives to come in and manage the family ventures. Less than six months later, the Ilitches issued a curt statement saying they had severed their relationship with the pair. There was no further explanation.

 

Nor is Little Caesars likely to move back up into third place anytime soon.

 

"I don't see anything to suggest that they're going to pick up spectacular growth and overtake Papa John's," White said.

 

In the late '90s, as Detroit moved toward its controversial, long-awaited debut of three casinos, Marian Ilitch moved to become a player there, too. She bought a 25-percent share in the new MotorCity Casino.

 

Her part-ownership immediately raised questions about how Major League Baseball would react. Baseball frowns on cross-ownership of teams and casinos. The Ilitches' explanation -- that Mike by himself owned the Tigers and Marian by herself owned the casino share -- struck many as a convenient fiction.

 

For one thing, even after she owned a share of MotorCity, Marian Ilitch's entry in the Who's Who reference guide continued to include among her affiliations "owner of the Detroit Tigers." Nonetheless, baseball never did challenge the arrangement.

 

Now, as this intensely private woman moves to assume ownership control of MotorCity, her multiple roles are likely to put her ever increasingly in the unwanted glare of publicity.

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