Penguins "to KC/staying in Pitt/not sold/whatever" thread

[Jaded-Fan]

I guess I'm just surprised that the politicians have actually stepped up for once.

Either way, just get this thing done and lets end this rollercoaster.

To be fair to the politicians, who actually deserve a heap load of crap thrown their way for the handling of this until now, they did not have access to the bulk of the cash for this until now. Not until the slots license went one way or another. On the other hand, if they had said right off the bat that Plan B = a free arena we would not be talking now. Bettman would have pushed through the deal. Or am I wrong?

 

[Jaded-Fan]

OK, the Pens now have their free arena from Pittsburgh. I think. The only thing not mentioned was that giving up of the $1.1 mil in naming rights but I doubt that was held back giving the cave on everything else:


In Thursday's meeting, Rendell said the state would no longer expect the Pens to put up $8.5 million or the $2.9 million as far as debt services are concerned for the new arena.

http://www.thepittsburghchannel.com/sports/10661881/detail.html

How could the NHL possible approve a move when they set the standards as a new arena and the State/local government now came up with a free one? The State met the test by any concievable notion. If this is true the Pens are going nowhere.

Just a reminder of what you said NHL. Said less than 3 weeks ago:

"Our preference is for the club to stay in Pittsburgh," deputy NHL commissioner Bill Daly said Wednesday after the gaming board's decision. "The commissioner (Gary Bettman) has been very clear from the start that the team needs a new arena, and if it wasn't going to get a new arena on terms that made economic sense to the Penguins, the team should move.

"But we wanted to make sure that Pittsburgh was given every opportunity to step to the plate and make a viable arena deal."

http://www.kansas.com/mld/kansas/sports/16294734.htm

Don't you dare change the God Damn deal now.

 

[DaveMatthew]

I'd just like to throw this into the mix.

The Sprint Center being built is only a small part of a large development project undertaken by AEG. In addition to the 276 million dollar arena, AEG is also involved in the development of the 850 million dollar Power and Light Entertainment District adjacent to the building.

In terms of the arena, tax payers paid for 226 million dollars of it. AEG had to invest 50 million. So, they went out and got themselves a partner, none other than Mario Lemieux's partner and the money man behind the Pens, Ron Burkle. He put up the 50million necessary through his investment firm, and is now a partner of AEG in both the arena project as well as the entertainment district.

So, in order for him to get maximum return on his investment, he needs to get an pro sports team into his arena so that his entertainment district can thrive. Anybody think that he's going to be very strongly pushing for a move into KC?

Also, Tim Leiweke, President of AEG, is also the chairman of the NHL Relocation and Expansion committee.

It seems as if a lot of people involved in the Pens and NHL are already involved in Kansas City, and it just reaks of an upcoming move.

 

[Jaded-Fan]

Deal possible next week to keep Pens in the burgh!

Lemieux 'optimistic' after talks; arena deal may come next week

By Andrew Conte and Rob Rossi
TRIBUNE-REVIEW
Friday, January 5, 2007

Penguins owner Mario Lemieux emerged optimistic Thursday from a long-anticipated meeting with top public officials who want to keep the National Hockey League franchise in Pittsburgh.
"I'm optimistic with the meeting we had today with the politicians here in town that were willing to step up and talk about some issues that were a big concern of (ours) going back seven years," Lemieux said after the 75-minute session at the State Office Building, Downtown.

"I can say that it was a very positive meeting."

Talks between the Penguins owners, Lemieux and billionaire investor Ron Burkle, and Gov. Ed Rendell, county Chief Executive Dan Onorato and Mayor Luke Ravenstahl went so well there could be a deal as soon as next week, sources said.

http://www.pittsburghlive.com/x/pittsburghtrib/news/rss/s_487121.html

 

[hockeydadx2*]

It seems as if a lot of people involved in the Pens and NHL are already involved in Kansas City, and it just reaks of an upcoming move.

There's a ton of incest here, and it was all a grand charade to put pressure on the Pittsburgh politicians. All of these guys know each other, and they put on a good show. The governor and county executive essentially buckled and gave Lemieux's group what they wanted, evidently, because they were all filmed giving each other High Fives in the hallways after their meetings.

It reeks of a move, perhaps, but not one involving the Pens. KC's payback in this whole thing will be the Preds or an expansion team.

 

[MojoJojo]

Thank you for the genuine and obviously so heartfelt sympathy Rags and Caps fans.

As a Flyers fan that has gotten into it with Pens fans over the years, let me say I am extremely sorry to see the franchise moved, especially since they have so much promise heading into the future with their young stars. I'm sorry for the city, their fans, and for the league which loses a solid chunk of its history.

 

[Jaded-Fan]

As a Flyers fan that has gotten into it with Pens fans over the years, let me say I am extremely sorry to see the franchise moved, especially since they have so much promise heading into the future with their young stars. I'm sorry for the city, their fans, and for the league which loses a solid chunk of its history.

Thank you. I mean that it is appreciated. And despite my feelings for the Flyers I would be right there with you if in the very very unlikely event something beyond on the ice stuff, like this, happened to you. I mean that too. I actually love to hate you guys. I was very upset at the proposed realignments that would stop the rivalry because you guys are so damn much fun to hate. But that stops on the ice. Things like this are an entirely different kettle of fish and I would be in your corner one hundred thousand percent.

As for the rumored demise of the Pens in Pittsburgh, it is seeming more and more to be highly exaggerated. The Pens are getting their free arena, Mario was high fiving and smiling coming out of his meeting with Ridge, Onorato and Ravenstahl last night, and issued a statement saying that he never wanted to leave Pittsburgh. As linked above sources said that the meeting went so well a deal could be signed next week. The sides were never that far apart. That this would be settled was fairly obvious. Actually everyone in PA should be happy. Mellon arena is on its last legs. Eventually it would have to be replaced. Mario and the Pens go and Barden is off the hook to the tune of a quarter of a billion dollars that he would pocket. Then an arena gets built eventually with tax dollars. Kind of stupid for the PA taxpayer even if he is not from Pittsburgh, isn't it?

 

[MacDaddy TLC*]

What a joke the governor of Pennsylvania is stating that KC has failed at hockey. First of all, it 30+ years ago. 2nd of all, Pittsburgh is the only team in history to declare bankruptcy multiple times!

 

[Jaded-Fan]

What a joke the governor of Pennsylvania is stating that KC has failed at hockey. First of all, it 30+ years ago. 2nd of all, Pittsburgh is the only team in history to declare bankruptcy multiple times!

I kind of liked that. Not because of the content but because it showed that he cared enough to get pissed and not say the politically correct thing. It was a precursor to the deal seemingly getting done right after. From a Pens fan, not as a slam on KC but for what it showed, you had to love it.

 

[SidTheKid87]

Also, Tim Leiweke, President of AEG, is also the chairman of the NHL Relocation and Expansion committee.

I know the business of the NHL has no system of checks and balances, but can anyone say conflict of interests?

 

[Jaded-Fan]

Now that the offers are on the table, or at least what was leaked of them, and we have had time to digest them and all the reactions of people involved, factor in the BOG (2/3 vote) and Bettman approving a move, factor in Pittsburgh offering the free arena, factor in KC's offer, and handicap the Pens chances of staying or leaving.

I give it a 95% chance of staying and I almost feel it is even stronger. But will go with 95/5.

 

[hockeydadx2*]

Based on how Mario looked last night during the television interviews, I'd say 95% is almost pessimistic.

I slept well last night after watching all of that stuff.

 

[Impact]

There's a ton of incest here, and it was all a grand charade to put pressure on the Pittsburgh politicians. All of these guys know each other, and they put on a good show. The governor and county executive essentially buckled and gave Lemieux's group what they wanted, evidently, because they were all filmed giving each other High Fives in the hallways after their meetings.

It reeks of a move, perhaps, but not one involving the Pens. KC's payback in this whole thing will be the Preds or an expansion team.

I think you are dead on here! Masterful ruse by all these guys. I wouldn't say the team was NEVER in jeopardy of moving but I do agree that it was a setup.

 

[Big Country]

great negotiation tactics

For the first time in his seven years of negotiation for a building, Mario finally has what negotiators call a strong BATNA (Best Alternative to a Negotiated Agreement). He has another alternative outside of his negotiation with the politicians in Penn. and this alternative is very strong. It is clearly being used as leverage to get the best deal possible out of the politicians.

This, plus the deadlines they've imposed are all that's needed to create a deal in Pittsburgh.

 

[Jaded-Fan]

Interesting article on Burkle and the process

One of the exerpts:

Now Burkle is using his connections to help Lemieux keep his commitment to Pittsburgh. One strategy involves using a new arena in Kansas City as leverage to win a better deal in Pittsburgh.

"Ron is being loyal to Mario, and Mario is being loyal to Pittsburgh," said Frank Quintero, Burkle's spokesman.

For Burkle, it's all about making money and getting a return, said Matthew Miller, an associate editor at Forbes magazine who spent three years working on a Burkle profile.

http://www.pittsburghlive.com/x/pittsburghtrib/news/mostread/s_487856.html

 

[Jaded-Fan]

....... and the possible shape of the deal is emerging

A potential solution to the Penguins' contribution involves the city-county Sports & Exhibition Authority paying $8.5 million to Lemieux's limited partnership for the former St. Francis Hospital property on Centre Avenue. That money could be used as a down payment on the arena.

Lemieux Development paid $7.5 million for the site in 2001. It has been paying taxes and other holding costs since then.

Another goal has been to reduce the team's annual contribution for an arena. Onorato has hinted public officials would seek to eliminate the naming rights requirement.

That would leave the Penguins paying about $2.9 million a year

http://www.pittsburghlive.com/x/pittsburghtrib/sports/penguins/s_487844.html

........ and here dealing with a proposed redevelopment partnership with Barden, which KC obviously could not match being already developed. Key points:

As part of talks with the Penguins, state and local leaders already have offered the team most, if not all, of the revenue generated by a new arena. That could be worth as much as $20 million a year, according to the Allegheny Institute for Public Policy.

Mr. Peduto has said that adding redevelopment profits could be a key element other cities such as Kansas City, which is making an aggressive move for the team, would have trouble matching.

The latest developments come as state and local officials and the Penguins continue to push to complete an agreement to build a new arena after a "very positive" meeting last week.

Sources indicate the basic elements of Plan B -- $7.5 million from Mr. Barden and $7 million a year from a slots-financed state economic development fund -- are still in play. However, negotiators are looking to whittle the team's share from $4 million a year, including $1.16 million annually in naming rights, to $2.9 million, the same the Pirates contributed toward PNC Park.

http://www.post-gazette.com/pg/07010/752505-53.st

 

[Jaded-Fan]

Mark Madden in Pittsburgh (sports broadcaster in Pittsburgh, bit of a bombast in the Rush Limbaugh Howard Stern vein) who had been screming to all that would listen that the Pens were gone, gone, gone, now says that several sources tell him that the Pens will sign a new arena deal as soon as monday.

Which does raise an interesting question if true, though it would be little of my concern then. What are residents of KC going to feel like if this report is true? New arena on the verge of opening and no main tenant anywhere near in sight.

 

[Royalwings]

Jaded, the Sprint Center is good for KC regardless of a ML team. They get the Big 12 tourny back and it will be far more attractive for concerts, conventions, Stars on Ice, NHL pre-season... you name it. The SC is part of a large multi million dollar revitalization project going on downtown.
And keep in mind that the taxes to pay for the SC are coming primarily from visitors. It's a tax on car rentals.
Would a ML team be good? Heck yeah, it would be great for all involved and AEG wants what is good for them, that's for sure. But I don't know that anyone is desperate like you suggested in the other thread.

 

[Jaded-Fan]

Jaded, the Sprint Center is good for KC regardless of a ML team. They get the Big 12 tourny back and it will be far more attractive for concerts, conventions, Stars on Ice, NHL pre-season... you name it. The SC is part of a large multi million dollar revitalization project going on downtown.
And keep in mind that the taxes to pay for the SC are coming primarily from visitors. It's a tax on car rentals.
Would a ML team be good? Heck yeah, it would be great for all involved and AEG wants what is good for them, that's for sure. But I don't know that anyone is desperate like you suggested in the other thread.

Maybe not KC (though I would be a little miffed if I lived there) but AEG certainly. They raised the expectations rather high. I doubt that the WNBA will be recieved well, merely because of those expectations.

 

[Jarnberg]

I'm really glad to see the city of Pittsburgh stepping up to the plate with a possible deal. Even though I don't think the NHL would allow the move, I'd hate to see the Penguins move. I also figured that Lemieux was using KC as a way to get Pittsburgh to step in.

Hopefully we hear a deal soon announcing the Penguins will stay, even if we'll now have to listen to crap about Nashville going to KC..

 

[Jaded-Fan]

Marc Ganis (president of Sportscorp Ltd., a Chicago sports business consulting firm)sees the Penguins remaining in Pittsburgh, assuming they can reach an arena deal with very little capital costs to the team and decent revenue streams.

Despite the much heralded rent-free offer in Kansas City, Mr. Ganis views it as an "above average deal and that's it. The reason for that is it's not a great market.

"As it stands right now, I don't see it as a great relocation opportunity other than a building being under construction right now. But it's a thoroughly mediocre market," he said.

Another factor that could work against Kansas City is that naming rights already have been accounted for and flow to Anschutz Entertainment Group. The Penguins would have the ability to cut their own deal in Pittsburgh, one likely to generate at least $2 million a year for the team.

Prudential announced this week it would pay $105.3 million over 20 years to put its name on the New Jersey Devils' new arena, although no one expects a bid that high for the Pittsburgh rights.

http://www.post-gazette.com/pg/07012/753298-61.stm


............. and the same article says that the sides are working for a deal by the end of next week.

 

[Jaded-Fan]

a Kansas City television station reported Thursday that other professional teams -- possibly NBA's Los Angeles Clippers basketball and two other teams -- are looking at relocating to the Sprint Center, operated by AEG.

"We are not going to count on Pittsburgh to solve our problems here," Tim Leiweke, president of AEG, told KMBC-TV.

http://www.pittsburghlive.com/x/pittsburghtrib/news/today/s_488267.html

 

[Big McLargehuge]

Thanks to Jesse at the Penguins board...Penguins' lease can be rent free next season

Essentially it boils down to this...

• Short-term lease extension allows Penguins to take over as 'Master Tennants' at Mellon Arena, displacing SMG.
  
• Since the Penguins take over the arena they no longer pay rent(currently around $2 million annually) and are now entitled to profits such as parking, concessions, and non-hockey events(estimated worth of about $20 million) that they do not get currently.
  
• There is a $5 million "transfer" fee due to SMG when this happens.
  
• SMG stays in as arena manager for a fee that is unknown.
  
• That still puts the Penguins about $18 million a year further in the black annually as the figure is expected "in the hundreds of thousands of dollars."
  
• The $8.5 million upfront payment from the Penguins for the new arena may be accounted for when the Penguins turn ownership of the old St. Francis Central Hospital over to the Sports & Exhibition Authority. The land is needed to build the arena and the Penguins bought the land for $8 million a few years back.

And an interesting quote...

"[Kansas City has an] above average deal and that's it. The reason for that is it's not a great market. As it stands right now, I don't see it as a great relocation opportunity other than a building being under construction right now. But it's a thoroughly mediocre market."

 

[Pens1566]

Jaded, the Sprint Center is good for KC regardless of a ML team. They get the Big 12 tourny back and it will be far more attractive for concerts, conventions, Stars on Ice, NHL pre-season... you name it. The SC is part of a large multi million dollar revitalization project going on downtown.
And keep in mind that the taxes to pay for the SC are coming primarily from visitors. It's a tax on car rentals.
Would a ML team be good? Heck yeah, it would be great for all involved and AEG wants what is good for them, that's for sure. But I don't know that anyone is desperate like you suggested in the other thread.

Pens in KC, no. Big Bird on ice, check.


Sorry, no offense intended. The image just kind of popped into my head when reading that. Continue.

 

[HansH]

Odd that we haven't seen this mentioned:

Pittsburgh Post-Gazette, 1/20

While the governor touted the proposed Plan B deal as hard to beat, the Penguins apparently felt otherwise during a 90-minute meeting Thursday that broke off without an agreement.

According to sources, team representatives, including co-owner Ron Burkle, were stunned when state and local officials proposed that the Penguins share development rights and parking revenues with Mr. Barden, who was a surprise visitor to the negotiations.

The team saw the proposal as a worse deal than it would get under an extension available next year at Mellon Arena, one that would allow rent-free use of the building and give the franchise control over all building revenues, including parking.

In addition to sharing parking revenues and development rights, the state, city and county also want the team to pay rent at the new arena, in excess of the roughly $2 million a year it pays SMG at Mellon Arena, sources said.

Team officials saw the latest proposal as a setback after a "very positive" Jan. 4 meeting, they said. They were surprised to see Mr. Barden, who was invited by Mr. Rendell, and the proposals for sharing development rights and parking revenues. They also felt the overall plan represented a retreat from the previous session.