The Pittsburgh Penguins late last month hired Wall Street firm Allen & Co. to sell the team, three financial sources said. The move comes as the franchise is in the midst of negotiations with the city and county about building a new arena.
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Penguins owner Mario Lemieux said in January
that he was talking to potential buyers. |
The team has long been struggling financially, so it came as no surprise in January when Penguins owner Mario Lemieux said he was talking to potential buyers. Hiring a bank marks a significant acceleration of the process.
Allen & Co. has arranged the sale of several professional sports teams, including the Milwaukee Brewers and Los Angeles Dodgers, though the firm has never sold an NHL team before. The firm is also currently trying to sell the Atlanta Braves.
Allen & Co. sports banker Steve Greenberg declined to comment, and the Penguins did not return calls seeking comment. One source said Penguins chief executive Ken Sawyer did not want to confirm the news during the negotiations.
Retaining the firm at such a delicate stage of talks with the municipality, however, is viewed by the team’s former owner as a strong message that the club will leave Pittsburgh unless an arena gets built soon.
“I can’t see that this simplifies matters,” said Howard Baldwin, who sold the team to Lemieux in 1998 as it exited bankruptcy. “At the same time, the city is going to get the message that they need to do something to keep the team here. Maybe somebody is going to get the message.”
The Penguins are working with Capri Casinos to build a $290 million arena if it lands a license for a Pittsburgh slot casino.
That effort does not seem to be catching on, however, said Dan Rooney, owner of the Pittsburgh Steelers. “The casino situation is tough,” he said.
If the team is sold, the new owner is likely to want to move the club if there is no new arena. In fact, a large reason why a buyer might be willing to spend money on the ailing franchise is to move it to a place such as Kansas City or Oklahoma City, which have arenas looking for permanent big league teams.
“A lot of what will go into the value is portability,” Baldwin said.
The Penguins are the second club to go on the market since the NHL resolved its seasonlong lockout last year. The St. Louis Blues recently agreed to be sold for $150 million, a price that includes the lease on the Savvis Center. Some media reports also said the price included $20 million of operating losses to be picked up by the sellers.
Either way, the price of an NHL team appears more valuable than before and during the lockout, when the Anaheim Mighty Ducks sold for $75 million.
