Just six months after planting the For Sale sign on the front lawn, the Pittsburgh Penguins are reportedly off the market.
A story in Thursday’s New York Post suggests that minority owners Mario Lemieux and Ron Burkle had widely differing views on the value of the franchise, a dispute that led to the refusal of a bona fide offer that was on the table.
“Mario believes Burkle messed it up,” a source close to the potential buyer told the newspaper.
According to that source, Lemieux was happy with the bid, which was thought to be in the range of $700 million for the club and its real estate holdings. But Burkle believed the $2 billion sale of the NBA’s Los Angeles Clippers back in 2014 suggested the real value of the Pens was considerably higher. With no hope of finding a middle ground, Lemieux chose to put an end to the sale plans.
Burkle, through a spokesperson, denied the story.
In its annual valuation of NHL franchises last November, Forbes magazine estimated the Penguins to be worth $560 million, down from $565 million in 2014. That figure does not include the real estate that would have been involved in a potential sale.
Lemieux was initially said to be looking for $750 million for the package back in September, a price that would have been a record for an American-based NHL franchise. That was seen as an aggressive ask, however. There were concerns about the upside of the market, along with the plummeting Canadian dollar and the impact it would have on the league’s biggest single source of revenue, its 12-year, $5.2-billion TV deal with Rogers Communications.
The Pens' sale was being closely monitored by the league, which reportedly is asking for an expansion fee of $500 million from would-be owners in Las Vegas and Quebec City. Anything lower than $700 for an established club with superstar players like Sidney Crosby and Evgeni Malkin and relatively recent Stanley Cup success would have driven that fee down.