How much % does Mario Lemieux

Discussion in 'Fugu's Business of Hockey Forum' started by kahlon66, Mar 4, 2011.

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  1. kahlon66

    kahlon66 Registered User

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    own the Pittsburgh Penguins, i was reading up on it and it differs in different newspaper articles, just wanted to know how much percent he owns of the penguins and for how much he paid for it and how much it might be worth now, thank you kindly
     
  2. edog37

    edog37 Registered User

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    I am not sure of the actual percentages, but I believe Ron Burkle is actually the majority owner. As far as worth is concerned, Forbes estimated the team was worth $235M back in Dec 2010...

    http://www.forbes.com/lists/2010/31/hockey-valuations-10_Pittsburgh-Penguins_317690.html
     
  3. Hoser

    Hoser Registered User

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    It's kind of tricky. From what I know, Lemieux was owed about $32 million in deferred salary (or >1/3 of the Penguins' debts). Lemieux forgave about $7 million of that debt and turned the other $25 million into equity in the team. Burkle stepped in late with about $20 million.

    The overall price of the team in 1999 was about $107 million, so Lemieux's share was about 23% and Burkle's about 19%. The overall make-up of the Lemieux Group Limited Partnership (the legal entity that owns the Penguins) is private, but I've heard estimates of up to 50 other shareholders.

    So, as far as I know, Lemieux is the single largest shareholder, Burkle is not far behind, and then a slew of other people hold 1-3% shares.

    You'd have to ask someone from the Lemieux Group LP if you want an exact breakdown. (good luck with that)
     
  4. Big McLargehuge

    Big McLargehuge Registered User

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    Its not public knowledge, about all we know is that Ron Burkle's stake in the team has increased and it's believed that he is the largest single shareholder of the team, but it is apparently only a 1 or 2 point lead over Mario there.


    How many minor investors there are in the rest of Lemieux Group LP is anyone's guess, the number has fluctuated greatly from the start...I think Burkle started to buy some others out starting about 5 years ago.
     
  5. Fugu

    Fugu Administrator

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    According to this unnamed governor, Mario owns 25% of the Pens, with a currently estimated franchise value of $250m.

    http://www.theglobeandmail.com/spor...ment-have-mario-lemieuxs-back/article1907098/

    In 1999, Mario was owed $32.5m, so the $20m above was converted to equity, $5m was paid out in cash.
     
  6. Jeffrey93

    Jeffrey93 Registered User

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    Very interesting stuff...makes me wonder how anyone thinks the Coyotes are worth $170M.

    But to stay on topic.....I imagine Mario will sell his portion soon.....that shoudl give us an idea of how involved he is. I'd imagine he overpaid though.....
     
  7. iCanada

    iCanada Registered User

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    Keep in mind that this was before Crosby was drafted. The penguins were in a state of disarray, to say the least.
     
  8. EvilPirateZamboni

    EvilPirateZamboni Taco Loco!!!

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    Overpaid? No. The Pens weren't up for sale and Mario was bidding on it, the team was in bankruptcy and Mario took his deal to the court and convinced them it could work. Without this deal, Mario and other creditor were looking at getting cents on the dollar of the $32 million and the Pens would have moved or folded.
     
  9. Hoser

    Hoser Registered User

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    ^Precisely. Mario Lemieux didn't really 'buy' the Penguins.

    A corporation declares bankruptcy when it cannot afford to pay back its creditors: the people and other corporations it owes money to. When they declared bankruptcy the Penguins owed a lot of people a lot of money, supposedly around $90 million all in all. Of that $90M, they owed Mario Lemieux about $32M.

    There are usually two ways a corporation will go about their bankruptcy: reorganization ("Chapter 11") or liquidation ("Chapter 7"). Under the latter option the business is shut down, all of its assets are sold off, and whatever money is raised by the selling off of those assets is given to the creditors. This is usually pennies on the dollar.

    Under "Chapter 11" bankruptcy the creditors can be given ownership of the corporation instead of their debts being paid out. That's what Mario Lemieux did. The money raised by Lemieux, Burkle and the other partners of the Lemieux Group was used to pay off the other creditors who didn't want an ownership stake; they (the other creditors) wanted to be paid out.

    In essence Lemieux got the Penguins for next to nothing, used Burkle et al's money to pay off the other creditors, and now they're sitting on an asset they could probably sell for upwards of $230M. Assuming Lemieux's share of Lemieux Group is about 23% and they sold the team for $230M Lemieux would get about $53M worth of that. He was owed $32M but considering he wouldn't have made much of that back if he let the team liquidate he's basically made himself $50M in 12 years. Not bad, not bad at all. Given how well the team is doing I doubt Lemieux will sell any time soon.


    That's also where the $170M figure for the Coyotes comes from: the debt. It's not that the Coyotes are 'worth' $170M. On the contrary: they're relatively worthless beyond the actual 'stuff' they own like equipment, office supplies, etc. The NHL wants to sell the Coyotes for $170M because that's how much it will take to pay off the team's creditors (including the National Hockey League itself).

    The problem in Phoenix was that there was no group like Lemieux's stepping forward to reorganize the team. Jim Balsillie was willing to assume ownership and pay off debts but his reorganization plan was also contingent on moving the team somewhere else. No one else stepped forward with an offer to pay off the debts and keep the team in Phoenix, so the NHL itself did. The bankruptcy court judge felt the NHL's plan was more likely to result in paying back all the debts and that's how the NHL ended up owning the team. (There's much more to this story of course.)

    Even now no one really wants to pay off the team's debts and keep it in Phoenix. That's why the Coyotes' landlord, the City of Glendale, is offering to front a lot of the money to anyone willing to buy the team and keep it where it is.
     
    Last edited: Mar 6, 2011

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