Are the Pittsburgh Penguins for sale?
If so, that would initially appear to be a somewhat startling occurrence for a team that seems to have everything going for it, at least externally – from a fancy new building, to fan and city support.
Via Bob McKenzie of TSN with the bombshell:
Pittsburgh Penguin owners Ron Burkle and Mario Lemieux have hired Morgan Stanley to explore the possibility of selling some or all of the NHL franchise.
It doesn't mean Burkle and Lemieux are necessarily getting out but they are looking at various options. It's believed Lemieux, perhaps more than Burkle, may have an interest in getting his equity share out of the franchise.
That would be something considering the fact that the Penguins are seen as one of the league’s success stories – a group that was publicly uplifted out of bankruptcy by Lemieux and now is one of the NHL’s top destination spots for players.
Back in April, Mike Colligan of The Hockey Writers explored what a sale of the Penguins could mean for both Lemieux and Burkle.
For Burkle, who invested $20 million in the Penguins in 1999:
By my calculations, Lemieux and Burkle have already cashed out their initial stakes in the franchise through refinancing and restructuring. That means the combined majority stake the pair still possess — in a team most recently valued by Forbes at $565 million — is effectively ‘house money’.
Will Burkle simply let his investment ride or cash out at the top like he did with his grocery chains in the late-90’s?
I’m tempted to think the latter.
And for Lemieux, who may be tiring of being a public franchise savior again:
I’ve always wondered how much Lemieux really embraces his role as owner and public face of a hockey team. His involvement in purchasing the Penguins out of bankruptcy was necessary to have a chance at recovering deferred salary owed to him from his playing days.
The fairytale legend grew as he came out of the press box and returned to the ice in 2000 — again, improving the financial situation of the team and by extension his chances of recovering the millions he was owed.
His final act was securing a new arena for the team in Pittsburgh, which paved the way for him to quietly exit with reputation and bank account intact.
Looking at it this way, a sale seems to make more sense. Regardless of emotions involved with sports, it is a business. Plus, this isn’t really a situation where a new owner will move a team to Hamilton, Ontario.
“We conduct periodic reviews of our business and, because we have received several inquiries about the franchise in recent years, we decided to engage Morgan Stanley for their insight and counsel,” Lemieux and Burkle said in a joint statement. “After buying the team out of bankruptcy, ensuring its long-term future in Pittsburgh and creating a strong foundation for continued success, we believe it is time to explore our options.”
If both owners indeed believe they have maxed out their investments, it could be time to move on. That’s business, that's money. Don't you ever watch "Shark Tank" on television? As for what that means for the Penguins in the short and long term – and if they indeed try to go forward with a sale … stay tuned.
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