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Fenway Sports Group Nearing Deal to Buy NHL’s Pittsburgh Penguins

scott soshnick and eben novy-williams
·3 min read
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Fenway Sports Group is nearing an agreement to purchase a controlling stake in the Pittsburgh Penguins, according to people familiar with the deal, its latest acquisition in an expanding portfolio of sports and entertainment assets. The FSG board will vote to approve the deal on Thursday, according to the people. The company declined to comment on the matter.

The group, backed by billionaire John Henry, is acquiring the team from current owners Mario Lemieux and Ron Burkle, according to the people, who were granted anonymity because the details are private. The deal is still subject to NHL approval.

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It’s unclear how much Fenway is paying for the team or how many limited partners are staying on. Lemieux, a Hall of Famer who spent his entire career in Pittsburgh, could keep a small portion of his equity, the people said. The Penguins were valued at $845 million in Sportico’s most recent valuations, ranking 15th in the NHL.

The Penguins would join a Fenway portfolio that includes the Boston Red Sox, Fenway Park, English soccer club Liverpool FC and racing team Roush Fenway Racing. The entire entity was valued at more than $7 billion earlier this year, when RedBird Capital acquired a 10% minority stake. Other investors include LeBron James and record executive Jimmy Iovine.

Red Sox CEO Sam Kennedy told the Sporticast podcast last month that it was a “very exciting time” for the company and its growth ambitions.

“We look at FSG very much as a platform for sports, entertainment, real estate, content, media, and the like,” he said. “We are very interested in growing our company and acquiring new businesses in those lines of business. So teams, venues content, media, real estate is where we’re looking and we’ve got a lot going on right now.”

The Penguins have been one of the more successful NHL teams over the past two decades, bolstered by All-Stars Sidney Crosby and Evgeni Malkin. The team won the Stanley Cup in 2009, 2016 and 2017, and has made the playoffs in each of the past 15 seasons. The next longest streak is seven years.

That success has translated on the business side. Last season the team had the highest local ratings share of any NHL team (not the largest audience, but the highest percentage of local viewers). An average of 7.8% of Pittsburgh TV homes tuned in for Penguins games on their AT&T-owned RSN; the next closest were the Vegas Golden Knights, at 5.1%. The Penguins recently had a 633-game sellout streak that spanned 14 years.

League-wide, NHL team are valued at an average revenue multiple of 5x, according to Sportico‘s numbers, the lowest of the five major U.S. leagues (NFL teams are 6.3x, MLB teams are 6.4x, NBA teams are 7.8x and MLS a whopping 12.2x). And while the Penguins have been on the market for a while, it’s rare for a team with this recent success to be available for purchase. Recent controlling NHL sales are concentrated at the bottom of the league—including the Arizona Coyotes, Carolina Hurricanes and Florida Panthers. Even the New York Islanders, which were sold in 2014, hit the market at a time of franchise disarray, with questions about where the team would play moving forward.

Lemieux and Burkle teamed up to purchase the team out of bankruptcy in 1999. Lemieux later said that without Burkle as a top investor, the Penguins likely would have left Pittsburgh.

Burkle recently backed out of a group that was planning to bring an MLS expansion team to Sacramento, citing issues “related to COVID-19.” The plan fell apart without its primary backer, and he was sued by two companies claiming they’re owed millions.

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