Mario Lemieux's $50M refinancing plan to "rescue" the
Penguins "calls for millions of dollars in concessions" from
the city and Allegheny County, the Civic Arena's landlord,
SMG, and Fox Sports Pittsburgh, according to Ann Belser of
the PITTSBURGH POST-GAZETTE. Lemieux submitted the plan to
U.S. Bankruptcy Court yesterday, and the NHL acknowledged
that there was "still work to be done" before the plan can
be utilized, but "welcomed it." Lemieux said that if his
group's conditions are met, his investors, whom he has yet
to identify, "were ready" to invest $50M into the team.
Among the conditions are the "cancellation" of the team's
$6-7M per year lease at Civic Arena with SMG. The plan
would call for the city and county "to use eminent domain
powers, if necessary, to assume the arena lease," possibly
resulting in the city and county being "forced" to pay SMG
for the value of the lease, which runs through 2007.
Another condition is renegotiating the team's long-term
contract with Fox Sports Pittsburgh for broadcast rights.
Though Lemieux has kept the identities of his investors
secret, the Post-Gazette reports that one of them is CA
business exec Ronald Burkle, Chair of OR-based supermarket
chain Fred Meyer. But Burkle is also part of a group that
is trying to bring an NFL franchise to L.A., which could
present problems under the NFL's cross-ownership rules.
Lemieux, who is still owed $32M by the Penguins, would
receive $6M when the team is refinanced, convert part of the
debt into his ownership stake and try to recover about $5M
from co-Owner Roger Marino (PITTSBURGH POST-GAZETTE, 3/19).
Of the $50M cash infusion, $25M is coming from one investor
and $25M from 10 others. About $25.5M will go toward
operational expenses, and the rest will help "clean up" the
Penguins' debts (USA TODAY, 3/19).
BOLD PREDICTION: Lemieux "predicted" that the team
would earn a $5M profit next season even though it has lost
$20M in the past year (Pittsburgh TRIBUNE-REVIEW, 3/19).
