08 January 2007

THE FUTURE OF THE PENGUINS

Hey pens fans,
This is an article I found at http://www.hockeybuzz.com/blog.php?post_id=4704. I only hope that things work out like this, but it makes a lot of sense. So here is a little moral boost for Penguin Fans hopin to keep the team in the city they love.
THE FUTURE OF THE PENGUINS: In Pittsburgh and Owned by Jim Balsillie
Today @ 2:55 PM ET Comments (32)
One day when the CBC miniseries comes out about all this, we're all going to be trying to remember how it all got so complicated - why there were casino deals, last minute clauses causing agreements to fall apart, trips to Kansas City, Plan B's...whew...it's enough to give you a huge headache.But in the end it will all be worth it, and here's what we have to look forward to:* A dazzling new arena in downtown Pittsburgh* "Mario Lemieux Night" and the beautiful statue in his honour* Sid the Kid and Evgeni Malkin skating around with the Cup - on multiple occasions* Jim Balsillie helping to further build and grow the game that we all love so much* The Kansas City Scouts (or whatever they are going to be called) and another expansion team (maybe the Winnipeg Jets) coming into the league within the next few years
***Here's why it's going to happen:THE PEOPLE OF PITTSBURGH, PENNSYLVIA * The City of Pittsburgh needs the Penguins. The fans love this team. They've been there through thick and thin. This team has brought families closer together and brought joy to a city where times have often been tough. The league cannot take this team away from them. NATIONAL HOCKEY LEAGUE * The National Hockey League needs the city of Pittsburgh. They have invested 40 years in this market and cannot afford to lose a loyal and passionate market. We need more markets like Pittsburgh - not less.JIM BALSILLIE * The National Hockey League and the City of Pittsburgh needs a guy like Jim Balsillie. He's smart, innovative, determined and passionate - everything this league needs desperately. This is a guy who lists Gordie Howe as the greatest influence in his life, plays rec. hockey twice a week and when the original deal was agreed upon, said, "This is great, I feel like a kid again, quite frankly. I'm going to get my name on the [Stanley Cup] one way or another. What Canadian boy wouldn't do it [buy an NHL team] if he could?"So why did the original deal fall apart? Well there was a front-page article in the National Post on December 20th that gives some great insight . In fact, the headline was "How the $175M deal to buy the Penguins died". (unfortunately the article is not archived on their site for some reason but if anyone is interested I can e-mail you a pdf).The article states:1. Mr. Balsillie balked at a "side deal" that would have required him to agree, among other things, to allow the NHL to take over the hockey team if it was unhappy with arena negotiations, or if it became disenchanted with his ownership.2. The league also wanted to restrict the new owner from contemplating a move out of Pittsburgh under any circumstances until 2013 at the earliest - the key words there being "under any circumstances".As far back as August, Mr. Balsillie sought assurances from the league that he would be able to move the hockey club if the arena funding did not materialize and all other viable options were exhausted and Mr. Bettman's response, according to the article was "I'll be the first to help you pack your bags". 3. These were just two of the two-dozen additional conditions that had to be met that were outlined in a new document that was attached to the league's consent agreement.Those new conditions were presented "without warning or discussion" on December 8, a week before the deal was supposed to close - and two full months after the $175 million offer was formally announced.4. Mr. Balsillie requested a 30-day extension to sort through the new requirements, which was denied by Mr. Lemieux. To quote the article again, Balsillie "felt he was in an untenable position: he desperately wanted to close the deal but refused to accept the limits being imposed on his ownership". They quoted a source saying "It was like the NHL was saying, 'write your cheque and be screwed' and the sellers were saying, 'hurry up and concede on everything or we'll cancel the deal'.In the end, he couldn't agree to all the new demands, especially given the imposed time constraints, and the deal fell through. However, at the time he did say, "All it takes is a five-minute call between three motivated parties to restart this." He stressed his intentions once again in a statement to the Post Gazette on Wednesday:"As I stated in my letter to Mario, Pittsburgh is clearly where the team belongs. It's a great hockey market with a great hockey tradition. All it needs is a new arena. Plan B promises a new arena. Certainly, I would still look at this, as would any hockey fan. This team simply has too much promise." http://www.post-gazette.com/pg/07004/751161-61.stmMARIO LEMIEUX * Mario Lemieux does not want to move the team out of Pittsburgh. He has been a part of this franchise...heck he's pretty much been the franchise for over 22 years. He's fought this battle off the ice for over seven years. The guy does not lose. Remember the '87 Canada Cup? Remember Salt Lake? How he overcame Hodgkin's and his back problems? I know I wouldn't bet against him. COUNTY, CITY & STATE COME TOGETHER * The County, City and State officials are all working together to keep the team in Pittsburgh. I know that there will be many who question why they have taken so long, but many major deals often don't come to fruition until the last minute. In fact I seem to remember a whole season of hockey being cancelled once, because the two sides couldn't reach a deal in time to save the season. At least here they still have the chance to get the deal done before it's too late. The original "Plan B" that Allegheny County Chief Executive Dan Onorato, Mayor Luke Ravenstahl and Governor Ed Rendell were offering was already close to the deal the Pirates got for their stadium (the team would be responsible for 21% of the arena costs). Even with the no money down, no interest, no rent, no long distance charges offer from Kansas City, Onorato still said that their deal would be a "very competitive deal".As a starting point, $8.5 million up front and $4 million a year (including $1.1 million a year from naming rights) does not seem so outlandish, especially considering that Onorato has stressed the terms are negotiable. Of course it's not as good as free but you also have an established market here and likely the potential for higher revenues. COMMISSIONER BETTMAN * NHL Bylaw #36 makes it extremely tough to move a team when there is an option that is financially viable in the current city. According to a Post-Gazette article from July:There are 24 areas of consideration that are to be used in determining whether to allow a team to move, including "whether there is a reasonable prospect ... that it could become financially viable" and whether the club received a "publicly financed arena, special tax treatment, or any other form of public financial support."http://www.post-gazette.com/pg/06200/706788-61.stmAlso in that article they mention that local fan support and whether a move would harm the league's image are also considered with any possible relocation.If Plan B were a viable and fair option for the team (and from reading the articles, it's sounding very much like it is) it would be difficult, if not impossible for them to bolt just to take a better offer from KC. That would set a precedent that would make many other teams possible relocation targets down the road if another city (say, Las Vegas) decides to build an arena and pursue an existing franchise by offering free rent, 50% of revenues, etc.KANSAS CITY, MISSOURI * Kansas City has a beautiful arena built, an owner (Boots Del Biaggio) waiting with his wallet open, and a management group (Anschutz Entertainment Group, including Luc Robitaille) raring to fill their building. It's quite possible that the league has even promised Del Biaggio/AEG that they would get the next team (either through expansion or relocation). In my opinion there's no way that arena gets built without some kind of assurances - especially with AEG already being involved in the league as owners of the Kings. Assuming the Pens stay in Pittsburgh, like it or not, expansion is probably coming. The idea of realignment was already brought up recently and not surprisingly their new plan leaves the league two teams short of 4 eight-team divisions. To appease the Canadians and other hockey purists, the league could put the second team in Winnipeg. Yes their arena is a little small (15,015) but it does have 48 suites and the league will realize that it's better to sellout in a smaller arena than have a ton of empty seats in a larger arena in Houston, Las Vegas or Oklahoma City. While many (including myself) believe that there are already too many teams, the lure of $300 million+ split 30 ways will be too good to pass-up - especially with the arenas already built. The league can also add a third Saturday game to the Hockey Night in Canada package, to increase revenues further if a Winnipeg team is added. The team stays in Pittsburgh, they get a great owner and a new building, Mario gets his statue and KC gets a team (plus Winnipeg too). It all sounds simple enough, doesn't it?***However, at this point, this is all far from a done deal. There is a lot that still needs to happen in the coming weeks:* Mr. Bettman needs to arrange a meeting with Mr. Balsillie and Mr. Lemieux to see if they can set the groundwork for an agreement to be reached in principle. Assuming that it can (which isn't a stretch because it has been done before - and that was when there were more unknowns surrounding the situation than there are now), then Mr. Balsillie should be allowed to enter into the Plan B talks.After thinking about it a lot I finally realized why Mr. Lemieux is negotiating Plan B before selling the team, instead of selling the team and letting the new owners deal with it:I believe that Mr. Lemieux and the league would like to stay in Pittsburgh, if at all possible. However, I think that if they can't stay in Pittsburgh, the league and Lemieux want to move to Kansas City. They knew there was a chance the IOC bid wouldn't be accepted and they probably did not have a lot of confidence in Plan B - after all it had been seven years of talking and no action.Mr. Lemieux can't sell the team to Mr. Del Biaggio and let him lead the negotiation, because he's only interested in the team if they move to Kansas City. At the same time, they can't sell the team Mr. Balsillie (or another group) and let them negotiate the deal, because if Plan B falls through then they (Lemieux and Bettman) want/need to put the team in KC.Thus, Mario is negotiating Plan B - if he's successful he'll be the hero of all heroes and can then sell the team and go off into the sunset. * Looking at the original offer and listening to both parties after last week's meeting, I'd say the chances of Pittsburgh staying are extremely high. Assuming that Mario is relatively confident that Plan B will get done, it's time to bring the new owner (Mr. Balsillie) into the talks. I think it's absolutely important that the new owner is allowed to negotiate terms that are most favorable to their interests. * Once the deal is complete (including negotiating the additional time to stay at the Mellon Arena while the new arena is being built and the sale of the St. Francis Central Hospital which was purchased by the team for $8 mil), the sale can be completed and Mr. Balsillie can assume ownership of the team once the deal closes. * Finally, construction can begin on the new arena, ticket packages can go on sale, and somebody can start working on the mould for that Lemieux statue.Let's hope that the Penguins and the NHL consider this to not only be the best option for the long-term success of this team, but the ONLY option. It’s in the best interest of the team, the city and the league that they keep the team in Pittsburgh and sell the team to Mr. Balsillie.

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