Uncertainty has arrived over and over again during the 48-year roller coaster existence of the Pittsburgh Penguins, as a general rule once per decade.
This time, however, it has arrived in a different form.
In the mid-1970s, the team went into bankruptcy and there were threats it might move. Pretty much the same thing happened in the early 1980s when the team was averaging less than 7,000 fans per game before Mario Lemieux was drafted and changed the landscape.
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By 1998, despite the glory years of the early part of the decade, the team was in bankruptcy again, and this time it was Lemieux who helped save it by becoming the first player-owner in NHL history.
By 2004, however, the team was once more in serious financial trouble and averaging less than 12,000 customers per game, and this time it appeared the franchise might be relocated to Kansas City. Again, another saviour arrived, this time in the form of superstar Sidney Crosby, and the Penguins not only thrived again, they moved into a brand new arena and out of the ancient Civic Arena, the only rink the team had ever known.
Today, the team is basically as healthy as it’s ever been, has made the playoffs nine straight seasons and has sold out all its home games for the past eight years. It’s become one of the biggest draws on U.S. network television because of stars like Crosby, Evgeni Malkin and others, has those stars under long-term contracts and has a rock solid lease with 29 years to run.
So all’s just peachy. Except now the team’s for sale.
Uncertainty this time has arrived with a smiley face, in other words.
Although this may be just semantics. Pittsburgh’s owners, Lemieux and Ron Burkle, insist they have hired investment firm Morgan Stanley simpy to “review their options.”
That sounds a lot like the phraseology that began Mike Babcock’s exit from Detroit.
Anything is possible with this franchise, but the fact a firm has been hired to pursue possible sale options means these two men, or one of them, think this is the right time to get out of the hockey business for either personal or business reasons, or the right time to cash in.
This is anything but surprising.
As the past season, a difficult one, wore on, it became clear that not only were there issues with the team’s roster and salary cap situation, but there were also rumblings of an ownership rift between Lemieux and Burkle stretching back as far as last summer when the decisions were made to fire general manager Ray Shero and head coach Dan Bylsma. The two have co-owned the team since buying it out of bankruptcy in 1999 for $107 million.
Forbes Magazines valued the Penguins last November as the 10th most valuable NHL franchise worth an estimated $565 million. That’s more than the league average ($490 million) as estimated by Forbes, but less than half of the value of the No. 1 ranked Toronto Maple Leaf ($1.3 billion).
This is a particularly interesting time for NHL franchise values, meanwhile, with the league widely expected to award an expansion franchise in the near future to Las Vegas. NHL commissioner Gary Bettman has said the rumoured $500 million price tag isn’t out of the question.
The Penguins have been an unusual franchise over the decades because, despite all their financial valleys, they’ve also employed some of the biggest stars in NHL history and have won three Stanley Cups over the past 25 years. For the past decade, they’ve been seen as one of the NHL’s marquee teams.
It’s been boom or bust since ‘67, and now, it would appear, an extended period of stability has dawned.
Which means it might not be a bad time to sell, Lemieux and Burke seem to be saying.
So this isn’t a team in financial trouble again, and the lease means there won’t be any threats to relocate the team this time around. Lemieux says he wants to retain a piece of the team, which undoubtedly means a lot to the city and it’s hockey fans.
But a change in ownership can mean many things, and has for NHL teams like Dallas, St. Louis, New Jersey, Florida, Edmonton and Tampa Bay.
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It’s unlikely somebody would buy the Penguins and drive them in a completely different direction. Then again, if the rumours are true, Lemieux and Burkle didn’t always see eye-to-eye, and a new owner may have strong new views very different to those two men.
So again, there’s uncertainty about the Penguins, but a very different kind of uncertainty than other years when bankruptcy reared its ugly head and it seemed almost sure the club was headed out of Pittsburgh.
Then, it was about finding somebody who wanted to own a distressed asset.
Now, it’s about finding somebody with a half-billion dollars burning a hole in their pocket.