It’s been known since early June that Pittsburgh Penguins co-owners Mario Lemieux and Ron Burkle were exploring a potential sale of the team. Now we have a better idea of how much they want for it.
According to a report from TSN’s Rick Westhead, the Pens owners have set the price at $750 million. That would be a record for the sale of a U.S.-based NHL team.
A $750-million transaction price would mark a record for a U.S.-based NHL team, said Drew Dorweiler, a Montreal economist who has been hired by the owners of the Toronto Maple Leafs, Vancouver Canucks, Manchester United and other sports teams to estimate their franchise values.
“It does seem a bit steep with the economy and for that market,” Dorweiler said. “Pittsburgh is certainly not one of the largest cities in the U.S.”
Forbes magazine reported last year that the Penguins were the 10th-most valuable NHL team, worth an estimated $565 million. Sources in the banking industry said the preliminary bids for the Penguins were due last week.
Considering that the league is reportedly commanding at least $500 million for potential expansion teams, it's not terribly surprising Pens investors are aiming high on this one. They're a turnkey operation with a devoted fan base, high local TV ratings and some of the best players in the league already on the roster.
While the Pens owners might not get $750 million, this franchise has come a long way since its current ownership group took over 16 years ago. Burkle, Lemieux and many minority owners bought the club for a reported $107 million out of bankruptcy in 1999.
Around that time, the Penguins were looking like a relocation candidate, with Kansas City waiting with open arms. The club stayed through some pretty lean years that were bad enough to end up netting them high draft picks including Marc-Andre Fleury, Evgeni Malkin and Sidney Crosby. Their arrival helped turn the franchise around and made the Penguins one of the league’s most popular teams.
The local fan base has grown exponentially, the seats are always full, youth hockey experienced a major boom locally and the Pens even were able to move into a new building, the CONSOL Energy Center in 2010.
The turnaround of this franchise has been a dramatic one and the Pens have a lot of talent locked up with long-term deals. Malkin, Kris Letang and newly-acquired winger Phil Kessel are under contract through the 2021-22 season. Crosby is locked up through 2024-25. Fleury has a reasonable four-year deal in place and big things are expected from young defensemen Olli Maatta and Derrick Pouliot.
It’s pretty amazing how far the franchise has come in the last decade-plus. They’d probably like to have more than the one Stanley Cup they’ve won in that span, but it’s hard to deny the Penguins’ status as one of the league’s elite American franchises. Now it looks like we'll find out how much being one is actually worth.
