By filing for Chapter 11 yesterday, the Penguins can
"stay in business," but it raises "the prospect that the
court could dissolve their Civic Arena lease, leaving them
free to move," according to Schmitz & Kovacevic of the
PITTSBURGH POST-GAZETTE. The Penguins are close to "curing
their other financial troubles," after reaching a "partial
agreement" with Mario Lemieux in his $30M contract dispute
and coming "close to an agreement with Fox Sports on a
revised broadcast deal" that would increase team revenue.
But talks with SMG about reducing rent and increasing "its
take of" Civic Arena revenues have "gone nowhere." Marino
said that he considers SMG "the largest remaining obstacle
toward financial viability and the main reason the team
would want to leave." Steve Leeper, Exec Dir of the Public
Auditorium Authority (PAA), which owns the arena, said,
"[We] will take every legal measure and every step available
to make sure the team stays here" (POST-GAZETTE, 10/14).
BAD CREDIT, NO CREDIT? Schmitz & Kovacevic write that
the three entities that own the Penguins -- Pittsburgh
Hockey Associates (assets/liabilities: $50-100M), Pittsburgh
Sports Associates Holding Co. (assets/liabilities: $50-100M)
and HBRM LLC (assets: $1M, liabilities: $50-100M) -- have
300-1,200 creditors between them. Penguins co-Owner Roger
Marino, on the Chapter 11 filing: "Our reason for doing this
was to keep the Penguins viable in Pittsburgh." Schmitz &
Kovacevic report that during the proceedings, players,
coaches and employees will still be paid and games will not
be cancelled (POST-GAZETTE, 10/14). ESPN's Bob Ley noted
that the "only team to ever file for bankruptcy has done it
again ... The last time the Penguins went this route 23
years ago, the IRS padlocked their office doors and the team
was sold to satisfy ... debts" ("SportsCenter," 10/13).
I WOULD GLADLY PAY YOU TUESDAY: The PITTSBURGH POST-
GAZETTE lists the team's biggest creditors, and included are
debts of $28.6M owed to Lemieux; $1.45M owed to the NHL in
league fees; $1.07M owed to Fox Sports Pittsburgh in ad
fees; $1M owed to the city of Pittsburgh; $1.1M owned to
SMG; and $966,011 to go to other creditors, including the
NHL Pension Society and the NHLPA (POST-GAZETTE, 10/14).
WHEN TWO BECOME ONE: Co-Owners Marino and Howard
Baldwin said that "all of the feuding" between them has been
"officially called off." Dejan Kovacevic writes that
Baldwin's attempts "to buy out Marino are over" and Marino
said that he is "no longer worried about being undermined"
by Baldwin. Baldwin: "The truth is that we've never been
that far apart." Kovacevic: "Essentially little will change
from the way the team has been run" (POST-GAZETTE, 10/14).
PITTSBURGH REAX: In Pittsburgh, Bob Smizik writes that
an "owner can't be forced to absorb the kind of losses the
Penguins have taken on recently. ... It's a simple choice.
Lend the Penguins a hand, like the Pirates and Steelers, or
forget about hockey in Pittsburgh" (POST-GAZETTE, 10/14).
