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When word leaked that the Pittsburgh Penguins were for sale, the timing was just fantastic: It dropped moments before Gary Bettman began his latest “everything is awesome!” press conference at the Stanley Cup Final, undercutting that message with news that one of the NHL’s most popular (and presumably profitable) teams was on the block.
He was not pleased.
Mario Lemieux and Ron Burkle? They’ll be quite pleased with the numbers being tossed around regarding their for-sale shares of the team.
Patty Tascarella of Pittsburgh Business Journal reports that an anonymous group of investors is expected to make an offer on the Penguins within the week and that “some who have done deals in the National Hockey League said the team could sell anywhere from $700 million to $850 million,” or roughly what Sidney Crosby, Evgeni Malkin and Phil Kessel are owed until their current contracts end.
Why so high? Well, consider what many teams in the NHL that sell look like: Stuck in a struggling market, bleeding money, with little prestige. The Penguins are pretty much the antithesis of the kind of team you’d expect to be on the selling block, which makes them a heck of an investment (as much as owning a pro sports team can be a heck of an investment).
So it’s a good buy, and that means the current owners are going to get P-A-I-D. Which is why Burkle’s selling now, according to the Pittsburgh Tribune-Review:
Burkle, a former grocery magnate whose private equity firm claims it manages $11 billion, and Penguins majority co-owner Mario Lemieux are exploring sales opportunities for a franchise that Vanderbilt University sports economist John Vrooman predicts could sell for $800 million.
“Ron knows when to hold 'em and when to fold 'em,” said Lloyd Greif, a Los Angeles investment banker who has known Burkle for decades.
Burkle, 62, recently sold or shopped other high-profile properties. He pocketed $67 million for his stake in Manhattan's members-only club Soho House, the New York Post reported; he listed his Broadway penthouse for $37 million, according to Forbes; and A&P, a supermarket chain partly owned by Burkle's Yucaipa Cos., is looking to sell nearly half of its 301 stores, the Post reported.
Forbes pins Burkle's wealth at $2.6 billion, down from its valuation of $3.5 billion in 2007.
Oh man, only $2.6 billion?
Mr. Burkle, you have our sympathy. Now please excuse us as we dive into our change cup and see if we have enough nickels to buy a 4-piece McNuggets for lunch.
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