Owner says he'll retain team, discuss Plan B, but consider other cities; Balsillie makes new purchase overture
Friday, December 22, 2006
By Dave Molinari, Pittsburgh Post-Gazette
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Mario Lemieux says the Penguins aren't for sale anymore, but he isn't done shopping them around.
Mr. Lemieux said yesterday that he and his partners plan to retain control of the franchise, but will entertain offers from any city interested in serving as its home.
He added that the team is willing to discuss any "Plan B" proposal state and local elected officials formulate to finance an arena, with the intent of keeping the franchise here.
Meanwhile, after withdrawing his bid to buy the Penguins last Friday, Canadian billionaire Jim Balsillie yesterday reached out to the team in an attempt to get the sale back on track.
In a letter sent to Mr. Lemieux and CEO Ken Sawyer, with copies to Allegheny County Chief Executive Dan Onorato and Pittsburgh Mayor Luke Ravenstahl, Mr. Balsillie apologized for any offense he might have caused and said he has "a team ready to immediately start negotiating Plan B" to get funding for a new arena.
Mr. Balsillie praised Mr. Lemieux as "a hero to the people of Pittsburgh" and said selling the team to an out-of-town interest would be "a tragedy."
Mr. Lemieux's announcement came a day after the state Gaming Control Board rejected a slots-license bid from Isle of Capri, which had pledged $290 million for a new arena if it was awarded that license.
"Recent developments, including yesterday's decision by the PGCB, and the recent termination of the purchase agreement by Jim Balsillie, have convinced us that it is time to take control of our own destiny," Mr. Lemieux said in a statement.
"Accordingly, starting today, the team is off the market, and we will begin to explore relocation options in cities outside Pennsylvania. After seven years of trying to work out a new arena deal exclusively in Pittsburgh, we need to take into consideration the long-term viability of the team and begin discussions with other cities that may be interested in NHL teams.
"As soon as we are no longer restricted by our agreement with Isle of Capri from negotiating an arena deal here, in the next few weeks, we will also begin discussions with local leaders about a viable Pittsburgh arena plan."
The Penguins' relationship with Isle of Capri extends through the 30-day period during which the Gaming Control Board's slots-license decisions can be appealed.
There is no indication Isle of Capri is considering an appeal of the decision that awarded the license to PTIG Gaming.
Mr. Onorato said he found no "new news" in Lemieux's statement, noting that relocation always has been a threat because the team's lease at Mellon Arena will expire at the end of June.
Mr. Ravenstahl echoed that sentiment, saying that Lemieux's statement "restates the obvious: That the Penguins do have the option to leave after this year."
Mr. Onorato suggested he actually was heartened by the Penguins' statement, because Mr. Lemieux said the team plans to begin discussions with local officials in the next few weeks. He added that he is confident the city, county and team can cut a deal once they begin talking.
"I believe we can get to a deal that is as competitive as any other city and keep the Penguins here. It's just a matter of getting everyone in the room and working out the details."
Mr. Onorato believes there is "wiggle room" in Plan B, which calls for the Penguins to contribute $8.5 million upfront and $4 million a year for 30 years toward construction of an arena.
He, Mr. Ravenstahl and slots-license winner Don Barden are expected to talk by phone today to discuss Plan B.
"I know and believe that we as a city government, state government and county government can put a viable plan together for a new arena," Mr. Ravenstahl said.
After winning the casino license Wednesday, Mr. Barden reaffirmed his Plan B commitment of $7.5 million a year for 30 years. His spokesman, Bob Oltmanns, said Mr. Barden is "fully prepared to do everything reasonably possible to get Plan B finalized as soon as possible."
Mr. Onorato and Mr. Ravenstahl also talked by phone yesterday with National Hockey League Commissioner Gary Bettman, who said after Isle of Capri lost the license competition that the team's future in Pittsburgh was "uncertain" and that the Penguins would have to explore all other options.
Mr. Bettman did not back off those statements yesterday, Mr. Onorato said. He added that Mr. Bettman said his preference was to keep the team here, "but that depends on having a new arena and a viable financial" arrangement for the team in that facility.
Penguins officials declined to elaborate on Mr. Lemieux's statement, although it left several questions unanswered. It is not clear, for example, when he plans to begin entertaining offers from other cities, or whether he plans to aggressively seek those proposals or wait for interested parties to approach him.
NHL officials would not discuss Mr. Lemieux's announcement, which reflected the frustration that has been building since he got the franchise out of bankruptcy and was assured by elected officials that they would investigate methods of financing a new arena.
"I just hope that Mario doesn't hold his frustration of the past seven years against myself, Dan Onorato and the Penguins fans," Mr. Ravenstahl said.
Several cities have expressed varying degrees of interest in securing an NHL franchise.
Kansas City, where the Sprint Center is scheduled to open in October, heads the group, but Las Vegas, Nev.; Oklahoma City; Portland, Ore.; Winnipeg, Manitoba, Canada; and Houston also are on the list.
Whether Mr. Lemieux actually will have time to engage in serious discussions with all, or even most, of those places is conjecture, because settling on a base of operations for the team is not an open-ended process. Although no formal deadline is in place, several factors dictate that a decision be reached by late winter or early spring.
The NHL, for example, must know where the team will be based so it can put together its schedule for the 2007-08 season, and the front office needs time to develop and implement things like marketing plans, as well as to sell season tickets and arrange corporate sponsorships.
Even after Mr. Lemieux announced that the team was off the market, Mr. Balsillie, who called off an agreement to buy the team last week after Mr. Bettman imposed some 11th-hour conditions -- including one that would have compelled him to keep the team in Pittsburgh, regardless of the circumstances -- reiterated his interest in buying it.
"We've fully studied the situation and are prepared to complete the purchase and immediately commence good faith 'Plan B' negotiations with the government officials to keep the team in Pittsburgh," he said in an e-mail yesterday. "This is an urgent situation, and we support an urgent plan of action."
In his letter, Mr. Balsillie referred to NHL consent agreement and asked Mr. Lemieux to "go arm and arm with me to the commissioner [Mr. Bettman of the NHL] and make one last effort to get our deal done."
Mr. Balsillie, of Waterloo, Ontario, is chairman and co-CEO of Research in Motion, which makes the popular wireless BlackBerry devices. He signed a purchase agreement in October to buy the Penguins for about $175 million.
In a statement released Monday in conjunction with a news conference held by Mr. Lemieux, the team owner said the Penguins were "shocked and offended" by Mr. Balsillie's late withdrawal.
(Mark Belko, Rich Lord and Shelly Anderson contributed to this story. Dave Molinari can be reached at DWMolinari@Yahoo.com. )
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