News Article: Lemieux, Burkle exploring possible sale of Penguins

[Ziggyjoe21]

this also raises the interesting hypothetical scenario that if lemieux were to cease being involved with the penguins and if the penguins were to continue to trend downward as seems likely, will guys like malkin and moreso crosby continue to feel the same allegiance to the penguins?

putting it another way, if lemieux leaves does that make crosby more likely to leave also, particularly when the team stinks?

No. Mario will remain as an owner and part of the organization.

Mario is a hockey person and is willing to spend to the cap to win, so my biggest worry is that the potential controlling owner(s) will pull a Bob Nutting and spend like the small market team that we are.

Regardless, I believe that the Pens will be able to maintain their high end cap spending for as long as Sid and Geno are here. After that all the revenue, big fan attendance, and national exposure will be gone because there are no more elite superstars to drool over.

 

[SwordofStMichael]

Yes that is the fear, legitimately.
Now with Lemieux and the hockey faction minimized how will the Burkle business faction handle the team?
It is possible that the Morehouse faction solidifies their position.
I can actually see that possibility happening, consider if Burkle remains on as majority owner who will be there to hold Morehouse back from now making the hockey decisions?

Looking ahead it is possible this franchise has roughly until the year 2020 or just after to get things done.
At any point after that time the clock starts ticking, Lemieux, Crosby and Malkin could all be out. With them gone (especially Lemieux & Crosby) goes all respect and esteem with league office, major sponsors and national hockey media.

 

[Til the End of Time]

i think people really took the past ~10 years for granted.

team was fortunate in so many regards during that time, with a confluence of numerous factors allowing the team to be among the league's best and brightest. ideal new cba, wealth of talented young players including two generational stars, fresh management, new arena deal, and owners willing to spend.

the stars aligned perfectly for the pens, yet they managed to waste a significant portion of that with cronyism and incompetence.

now some of those advantages are diminishing, and i think a new less enjoyable era of penguins hockey is about to begin.

 

[xTang]

There are issues here that do not necessarily deal with a new owner that could affect this team in the long run. A lot of the corporate sponsorship deals are expiring in the next year or two and from what is being discussed, most of these sponsors either want out or want to contribute at a lower rate. So revenue streams are going to be cut in the near future. Add in the fact that the team's yearly financial plans were set up that in order to "break even" they needed to make the second round every year.

Even if ownership doesn't really change, the team may end up having a self imposed cap just so they don't lose money.

 

[Bennett Brauer]

I just hope the new owner has hockey knowledge, I'm kinda excited to be honest, it's been a slow off-season. Now we can follow a WBS coaching search, potential new co-owner of the Pens, draft is in 3 weeks.

Like I said though, please let our new owner know hockey

 

[Winger for Hire]

I just hope the new owner has hockey knowledge, I'm kinda excited to be honest, it's been a slow off-season. Now we can follow a WBS coaching search, potential new co-owner of the Pens, draft is in 3 weeks.

Like I said though, please let our new owner know hockey

It'd be nice to start with a President and GM that have (current) hockey knowledge. Really doesn't matter if the owner has knowledge of the sport, unless they plan on being a Jerry Jones type owner. If a new owner comes in and wants to be that type of owner, then we have a whole new slew of problems. With or without hockey knowledge.

 

[plaidchuck]

. A lot of the corporate sponsorship deals are expiring in the next year or two and from what is being discussed, most of these sponsors either want out or want to contribute at a lower rate.

Source?

 

[edog37]

i think people really took the past ~10 years for granted.

team was fortunate in so many regards during that time, with a confluence of numerous factors allowing the team to be among the league's best and brightest. ideal new cba, wealth of talented young players including two generational stars, fresh management, new arena deal, and owners willing to spend.

the stars aligned perfectly for the pens, yet they managed to waste a significant portion of that with cronyism and incompetence.

now some of those advantages are diminishing, and i think a new less enjoyable era of penguins hockey is about to begin.

there is truth to this, but that happens in every league with every good team. There is a down cycle & we are starting to enter it. While I am disappointed they didn't win more than one Cup, they still went to the Final twice & won it once. Most other teams in the league would love to have that level of success.

 

[gordie]

Las Vegas Penguins here we come.

 

[plaidchuck]

If anything the organization took the last few years for granted. This year showed even with malkin and Crosby the playsoffs aren't a sure thing. Plus with the pirates being relevant again this pushes the team down the totem pole as far as popularity in the city goes.

I honestly don't think much will change with the team philosophically or financially, but I don't think it's a coincidence that lemieux is selling now.

 

[Shwag33]

If anything the organization took the last few years for granted. This year showed even with malkin and Crosby the playsoffs aren't a sure thing. Plus with the pirates being relevant again this pushes the team down the totem pole as far as popularity in the city goes.

I honestly don't think much will change with the team philosophically or financially, but I don't think it's a coincidence that lemieux is selling now.

I still hate the pirates. If bob nutting bought the pens I might cry. Cap floor forever!

 

[djt153]

If anything the organization took the last few years for granted. This year showed even with malkin and Crosby the playsoffs aren't a sure thing. Plus with the pirates being relevant again this pushes the team down the totem pole as far as popularity in the city goes.

I honestly don't think much will change with the team philosophically or financially, but I don't think it's a coincidence that lemieux is selling now.

i mean, morgan stanley just got $1 billion for the buffalo bills. interest rates are likely to be higher in the next 6-12 months than they are now, deflating asset prices. burkle has a few billion dollars, whereas the bulk of marios wealth is likely tied up in this one investment. selling at a top in that position is more common sense than any kind of reflection of the on ice product.

 

[billybudd]

There are issues here that do not necessarily deal with a new owner that could affect this team in the long run. A lot of the corporate sponsorship deals are expiring in the next year or two and from what is being discussed, most of these sponsors either want out or want to contribute at a lower rate. So revenue streams are going to be cut in the near future. Add in the fact that the team's yearly financial plans were set up that in order to "break even" they needed to make the second round every year.

Even if ownership doesn't really change, the team may end up having a self imposed cap just so they don't lose money.

Don't know about the "corporate sponsorship" thing (seems plausible given how aggressive their pricing strategy for tickets has been, but it's not something I know for a fact), but Forbes has the Penguins operating income at north of $20 million. Considering it's in business' interests to show low profits and considering that figure doesn't included non-hockey arena revenue, it's safe to say that Lemieux Group is drowning in black ink, not red.

i mean, morgan stanley just got $1 billion for the buffalo bills. interest rates are likely to be higher in the next 6-12 months than they are now, deflating asset prices. burkle has a few billion dollars, whereas the bulk of marios wealth is likely tied up in this one investment. selling at a top in that position is more common sense than any kind of reflection of the on ice product.

Aptly put. Lemieux would need to wait years to get as good of a price for his shares as he could right now for purely economic reasons. That the team's struggling a bit probably has nothing to do with it.

 

[IcedCapp]

just to continue down djt's point:

most sports team owners are guys with enough money to make owning a team a hobby. That's not Mario. I mean clearly the guy has a few bucks in his pocket, but $500MM or whatever he'd get from his portion of the sale, is ... significant. While it's like 2% of Burkle's net worth, it's close to 100% of Mario's.

He's done everything he set out to do: stabilized the team, got a good, young core, a long long long-term lease, a new building....

Say what you want about him, but I very much doubt that he'd sell the team without some assurance that they remain the Pittsburgh Penguins.

 

[Ugene Magic]

His intentions were very clear to me and what he did on top of that, fighting for a new arena, he did not have to do. So call me one of those "yinzers" and I will gladly thank him as he moves on from something he probably really didn't want in the first place.

Exactly.

Walk away losing money owed, or rebuild and recoup what he was owed, which he got back many years ago and he could have just walked then, but Malkin and Sid changed those plans. He did it right, and he deserves every penny.

You can't thank him enough.

The only question is can the new majority owner keep pace with what they started?

 

[Extra Texture]

There is one possible huge downside to consider and that is if ONLY Mario sells off his stake.

In that case the FoM (Friends of Mario) faction, the "win at hockey" guys, fade away and the Burkle-Morehouse faction, the "win at business" guys, gain complete control.

By all accounts B-M focus is on developing the old arena land, securing more corporate partnership revenue and entrenching themselves in the local political community. You don't think DM wants to be mayor one day? As long as the team makes it through a playoff round or two each year B-M make money.

This assumes that the two factions are somehow at war for control of the franchise's soul. But are we sure we have the sides right?

Mario is politically connected. Not saying he is responsible for anyone coming in, just that he is no stranger to that world and its operators.

Likewise, if the "hockey over business" guys are making the call on bringing in characters like JR and Tocchet then I think that strategy has failed completely based on who they've chosen.

They hockey-based decision making has been suspect for a long time now. Shero and DB being given an extra 2 years of futility were proof positive of that. If anything, the departure of the "hockey knowledge" side of the franchise might make the business side realize how little it knows about the game, and hopefully inspires some blank slate thinking about personnel

 

[IcedCapp]

everything we've heard suggests that Burkle wanted to clean house post-Boston (or earlier, not sure). It was Mario who wanted to keep Bylsma (and Shero). I'm not sure I hate a universe where Burkle wins that fight.

 

[Pete Gas]

It's obvious they are selling because the Blackhawks are so good and gonna win the cup every year from now on.

 

[plaidchuck]

DM wants to be mayor now? Never change with your compete unfounded speculation, hf.

But yeah, I think mario has a bit too much baggage with the league, time to take a step back imo. Again I'm not a yinzer that worships the ground he walks on either. Like how he didnt have to keep the team in Pittsburgh. Like the team was going to be successful in Kansas, lol.

 

[WayneSid9987]

I'm kinda hoping Burkle sells it all off(Bye bye DM) and I'm pretty sure Mario wants to sell all of his 25-30% and just wants a simple title in the organization.

Whether the next owners are good or bad, it'll atleast set Sid/Geno up for better success, the second half of their careers, whether they stay on with a good owner or peace out with a bad one.

 

[Beauner]

If Mario and Burkle both sell at least a majority of the team, I wonder how much loyalty Sid and Geno will still feel to the organization. I mean the only people remaining in the front office that have been with them for a while are Botterill and I guess Guerin. And that other *********.

Not saying they'll immediately demand a trade, but maybe a few more years of playoff failures and they might view it as a legitimate option. Or maybe I'm just a pessimist.

 

[Jacob]

DM wants to be mayor now? Never change with your compete unfounded speculation, hf.

But yeah, I think mario has a bit too much baggage with the league, time to take a step back imo. Again I'm not a yinzer that worships the ground he walks on either. Like how he didnt have to keep the team in Pittsburgh. Like the team was going to be successful in Kansas, lol.

All Lemieux had to do, if he wanted to recoup his losses, was sell the team to someone who *would* move them somewhere. It wouldn't matter to his pocket book whether it was Kansas City or Sheboygan.

Lemieux's primary motivation might have been financial, but there's no question he went above and beyond to not only keep the team here, but ensure they were financially viable for at least a generation.

 

[Waffle Fries]

If Mario and Burkle both sell at least a majority of the team, I wonder how much loyalty Sid and Geno will still feel to the organization. I mean the only people remaining in the front office that have been with them for a while are Botterill and I guess Guerin. And that other *********.

Not saying they'll immediately demand a trade, but maybe a few more years of playoff failures and they might view it as a legitimate option. Or maybe I'm just a pessimist.

Mario isn't cutting off all his ties to the organization. The idea that Sid and Geno will no longer feel committed to the organization because Mario is making a business decision is a major leap in logic

 

[Ogrezilla]

everything we've heard suggests that Burkle wanted to clean house post-Boston (or earlier, not sure). It was Mario who wanted to keep Bylsma (and Shero). I'm not sure I hate a universe where Burkle wins that fight.

Indeed. Burkle will run it like a business. In that case, that meant he would have cleaned house after several consecutive failures. Mario knew how to play hockey, but it doesn't mean he knows how to run a hockey team. I honestly don't want the owners making many hockey decisions. I want them hiring people to do that for them.

 

[Ogrezilla]

If Mario and Burkle both sell at least a majority of the team, I wonder how much loyalty Sid and Geno will still feel to the organization. I mean the only people remaining in the front office that have been with them for a while are Botterill and I guess Guerin. And that other *********.

Not saying they'll immediately demand a trade, but maybe a few more years of playoff failures and they might view it as a legitimate option. Or maybe I'm just a pessimist.

If Mario and Burkle come into the locker room day 1 of camp and shoot Dupuis in the knees to force him onto LTIR, I wonder how much loyalty Sid and Geno will still feel to the organization.