Report: Bid to buy Penguins could be $700M
The Penguins are on the market and could fetch a large offer. (USATSI)
Back in early June, Pittsburgh Penguins owners Mario Lemieux and Ron Burkle confirmed that they had engaged Morgan Stanley to explore options for the future of the team, including possibly selling the Penguins. It appears that the ownership group is expecting the first offer to purchase the team by the end of the week.
More from Pittsburgh Business Times:
A group of investors expects to make an offer to buy the Pittsburgh Penguins within the week, sources told the Business Times. Their identities of the bidders and size of the bid were not disclosed, although some who have done deals in the National Hockey League said the team could sell anywhere from $700 million to $850 million.
Last fall, Forbes priced the Pens at $565 million, a price many believe is low given its equity in the real estate development at the former Civic Arena site.
Given the short supply of NHL teams that are on the block and as financially stable as the Penguins franchise, “This is unusual and it’s not like there are five teams for sale,” said a professional sports investor who asked not to be identified.
That $700 to $850 million estimate is a wide range and massive sum of money, but not all that surprising. Considering the NHL plans to charge $500 million just for an expansion fee for ownership groups to gain admittance into the league, one of the NHL’s most popular teams with big stars already in place is sure to fetch much more.
Penguins fans need not fear about an ownership group trying to move the team, either. The lease with the new CONSOL Energy Center lasts until 2037 according to the Business Times.
It’s really amazing how far the Penguins have come in the last decade. They seemed dangerously close to moving to Kansas City at one point early in Lemieux and Burkle’s ownership, as they explored selling the team then.
It is believed that Lemieux in particular is ready to step away from the day-to-day operations of owning the team having helped bring the organization back to respectability, into a new building and in relatively good health financially.
In his statement announcing the exploration of selling the team, Lemieux said this:
“Our goal all along was to solidify the franchise both on and off the ice,” Lemieux said. “Our star players are signed to long-term contracts, they’ve got a deep and passionate base to support them, and I believe the Penguins are well-positioned for the future. Regardless of what happens, I plan on staying involved with the team in some capacity, and Ron and I plan to retain an ownership stake.”
With Sidney Crosby, Evgeni Malkin, Kris Letang and now Phil Kessel in the mix on long-term deals, Lemieux and Burkle will be leaving the team a lot better off than they found it and it looks like they’ll also earn a nice little profit as well. If they end up selling, that is.
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