Canadian poised to buy Penguins

Hockey team expected to close deal soon with executive from BlackBerry firm
Thursday, October 05, 2006
By Shelly Anderson, Pittsburgh Post-Gazette

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Jim Balsillie, the Canadian businessman who emerged last month as the front-runner to buy the Penguins, is expected to be named as the team's new owner today.

Negotiations between Mr. Balsillie, 45, and the National Hockey League team apparently have progressed in recent days to the point where a deal was close yesterday, several sources close to the process said. Mr. Balsillie is expected to be here for the Penguins' season opener tonight at Mellon Arena against the Philadelphia Flyers and the announcement of the sale would coincide with that.

Mr. Balsillie, chairman and co-chief executive officer of Research in Motion, the Ontario-based company that makes the popular BlackBerry handheld wireless communications devices, did not return a phone message left at his home. Penguins spokesman Tom McMillan said the team had no comment.

Mr. Balsillie intends to attempt to keep the Penguins in Pittsburgh, contingent on a workable deal for a new facility to replace Mellon Arena. That represents a change from mid-July, when he was close to working out a deal with the Penguins but backed out when it became clear he might have problems moving them to Hamilton, Ontario, near RIM's headquarters in Waterloo.
Mr. Balsillie's earlier offer was in the range of $175 million to $180 million. The amount of his latest offer is unknown.

The Penguins, owned in part by retired Hall of Fame player Mario Lemieux, have been for sale since early this year. Mr. Lemieux helped bring the team out of bankruptcy in 1999.

The team's lease at Mellon Arena expires in June, and club officials have been adamant that they need a new building to remain viable in Pittsburgh. Mellon Arena is the oldest facility in the NHL.

The Penguins have a contract with gaming company Isle of Capri, which will donate $290 million toward a new arena if it is awarded the city's slot machines license in December.

State and local officials have a Plan B for arena funding if one of the other two finalists, Forest City/Harrah's or PTIG Gaming, get the slots license.

That plan calls for the Penguins to contribute $8.5 million up front plus another $2.9 million annually over 30 years as well as another $1.1 million annually for 30 years in forgone arena naming rights. The winning slots bidder would contribute $7.5 million a year for 30 years, and another $7 million a year for 30 years would come from the state through a slots-backed development fund.

The state has freed $26.5 million for site acquisition and preparation. A lease at the facility will need to be negotiated, as will who pays for cost overruns.

NHL commissioner Gary Bettman said Tuesday that he expects the Penguins to remain here as long as there is a new arena.

(Shelly Anderson can be reached at shanderson@post-gazette.com or 412-263-1721. The Toronto Globe and Mail contributed to this report. )