Pittsburgh and Allegheny County officials accused Civic
Arena landlord SMG yesterday of "stonewalling" efforts to
keep the Penguins in the city and threatened to "terminate
their contract with the firm," according to Ann Belser of
the PITTSBURGH POST-GAZETTE. SMG spokesperson Steve
Halvonik said the company was "stunned by comments
indicating that SMG has not been participating in mediation
efforts to keep the Penguins in Pittsburgh." Meanwhile,
city and county officials unveiled a term sheet that
outlined the conditions under which they would "support" the
takeover bid presented by Mario Lemieux's group. Under the
terms, Lemieux would have to put up $20M in equity,
"essentially" waiving the salary the team owes him. He
would also be required to raise $60M from other investors --
$10M "more than what he has proposed." SMG would be asked
to provide $10M in cash for an 11% stake in the team and
give lease concessions worth $3M a year. Fox Sports Net
Pittsburgh would provide a $10M reserve to cover team
losses, but would not receive an equity stake in the team.
Fox would also increase its annual TV rights fee payments by
an amount "similar" to the $3M in SMG givebacks. The city
and county would try to have a new arena plan by 2003 (POST-
GAZETTE, 6/16). In Pittsburgh, Kris Mamula writes that
Lemieux's chances of "winning a controlling stake in the
team improved with the local government's very public split"
with SMG. Until yesterday, SMG "had enjoyed good relations
with city and county officials." NHL Senior VP/Legal
Affairs William Daly: "Anything that changes the dynamics of
these negotiations benefits Mario" (TRIBUNE-REVIEW, 6/16).
LEASE MADE PUBLIC: Also in Pittsburgh, Tom Barnes
writes that for the "first time," the Penguins "publicly
detailed" how their lease "drains badly needed revenue" from
the team. The team's filing in U.S. Bankruptcy Court shows
that SMG was to be paid the following: $3,672,000 in "game
rent" -- which included a number of provisions; $321,000 in
parking revenue; $852,000 in ad revenue; $846,000 in
concession revenue and $133,000 from Igloo Club memberships.
The team also reimbursed SMG $763,000 for game staffing.
These figures combined to equal the $6,587,000 in rent the
team paid in '97-98 (PITTSBURGH POST-GAZETTE, 6/16).
