Whose fault is it that the Pittsburgh Penguins are probably going to leave Pittsburgh?

Question

http://sports.espn.go.com/nhl/news/story?id=2788701

Answer 1

I don't know why anyone is surprised by all this, the writing has been on the wall since January! The politicians in PA are to blame if you ask me.

THEY ARE GOING TO KANSAS CITY & HERES WHY

PITTSBURGH PENGUINS FACTS:

Expansion team when the NHL doubled in size for the start of 1967-68 Season

The Penguins almost folded in 1975 when their creditors demanded payment of back debts. A group that included Wren Blair stepped in and prevented the Penguins from folding. Pittsburgh had the league's worst record in both the 1983 and 1984 seasons and it looked as though the Penguins would fold. The reward for such pitiful hockey was the right to draft French Canadian phenomenon Mario Lemieux. Other teams offered substantial trade packages for the draft choice, but the Penguins kept the pick and a legend was born. The Penguins suffered small-market syndrome for most of their existence, and cost cutting prevented another collapse into insolvency. Financially, the team was one of the better-managed NHL franchises between its 1998 bankruptcy and the 2004-05 NHL lockouts. Thanks to significant post-season runs, the Penguins broke even in 2000 and turned a small profit in 2001. Failure to make the playoffs in the next three seasons hurt the team's bottom line, but the shedding of contracts kept the team afloat as other franchises, like the Ottawa Senators, faced significant losses or declared bankruptcy.

BUT KANSAS CITY HAD A NHL TEAM & IT FAILED:

Kansas City was awarded an NHL franchise on June 8, 1972. The Scouts were an expansion team with no star players the NHL wasn't as popular in the 70s as it is today and both the NHL and NBA's attendance in the 70s were hurt by a sluggish economy. They played their home games at Kemper Arena. The team was not a particular success either at the gate or on the ice. Rising oil prices and a falling commodity market made for hard going in the Midwest during the 1970s. After two seasons, with its owners $900,000 in debt, the franchise was sold & relocated to Denver where it became the Colorado Rockies, who in turn became the New Jersey Devils after 1982. The NHL has also failed in ATLANTA & DENVER but both are back in the NHL & the Avalanche is one of the most successful NHL teams in North America.

Thanks to the IHL Kansas City Blades, a team that did well in Kansas City for several years during the 1990's and even won the league Championship, Kansas City now has a well-educated base of hockey fans in the city. Today those fans have wildly embraced the idea of another chance to watch NHL hockey in Kansas City (despite the comments of some others). As evidence of this fact, one needs to look no further than the fact that all the luxury box suites in the new Sprint Center are already sold to local businesses. This is a particularly interesting fact because a recent article in a Sports Business publication indicated that most NHL franchises derive 60% of their revenue from the sales of luxury suites to local corporations. The rest comes from individual ticket sales, parking revenues, merchandise and concessions.

ARENA COSTS:

The Pittsburgh Penguins could play rent-free and be equal managing partners in the new Sprint Center if they move to Kansas City. The Penguins would not have to buy into the management agreement for the $276 million Sprint Center. Additional Options to pay $27 million (THIS COST WILL BE TAKEN OUT OF FUTURE PROFITS NOTHING UP FRONT) to AEG the company who manages Sprint Center and share management and revenue equally with AEG from concerts or other events at the Sprint Center.

COST TO STAY IN PITTSBURGH:

Current Plan B for new arena in Pittsburgh being proposed by local politicians requires $8.5 million be paid upfront by the Lemieux/Burkle ownership group. The Lemieux/Burkle ownership group would also be required to pay $4.5 million annually for 30 years. So, the total out of pocket expense required by Lemieux/Burkle ownership group over 30 years = $135 million.

Also, the Lemieux/Burkle ownership group has agreed to pay cost overruns on the new arena to a certain point. The politicians in Pittsburgh have maintained that the new area won’t cost more than $270 million to build, but others, including the Lemieux/Burkle ownership group have insisted that a more realistic starting point is $290 million. The architectural firm HOK, ironically a Kansas City based company, designed the building with the same basic design features used for the new Sprint Center in Kansas City. According to HOK estimates, if construction of the Sprint Center began today, the final cost on the building would be estimated at $360 million. This fact has given the Lemieux/Burkle ownership group reason for concern because their total cost for the new arena could would look more like this: Pay $4.5 million annually for 30 years, plus an additional $70 million in potential cost overruns. Total out of pocket expense required by the Lemieux/Burkle ownership group over 30 years = $205 million.

IS PITTSBURGH DEAL POSSABLE:

EST. Cost of Construction $225 million
Heinz Field, cost $281 million
PNC Park, cost $216 Million
(YOU DO THE MATH)

ADDITIONAL FACTS TO CONSIDER:

The Penguins ownership group was attempting to sell the team when they thought they had an arena deal in place in Pittsburgh. This was before the Isle of Capri was denied the gaming rights by the Pennsylvania gaming commission. A potential buyer, William “Boots” Del Biaggio, is waiting in the wings in Kansas City. Del Biaggio has already agreed to purchase the controlling interest in any NHL franchise that relocates to Kansas City, thus relieving the current owners of any financial risk associated with moving to an “unknown” market. In other words, the Lemieux/Burkle ownership group could relocate the team to Kansas City without risk of losing any money in the sale or if the team runs into financial problems after the move.

Over the last ten years, Kansas City has become a world leader in BioMedical Research. Places like the Stowers Institute have attracted some of the world’s foremost leaders in cancer and stem cell research. Why is this relevant? A recent comparison of Kansas City and Pittsburgh revealed people in Kansas City have approximately $22,000 more per household in disposable income than the average Pittsburgh household. Why is this significant? Because this means they would have more disposable income to spend on entertainment events such as hockey games.

As for the “loyal hockey fans of Pittsburgh,” they look more like a bunch of fair weather fans to me. Check out the official attendance records for the team. It basically shows that they have only come out in strong support of the team when the team is winning or potentially moving. So, I don’t have much sympathy for them.

ATTENDANCE FIGURES IN PITTSBURGH:

2001-02: 15,649 (Ranked 22nd in NHL)
2002-03: 14,749 (Ranked 25th in NHL)
2003-04: 11,877 (Ranked 30th in NHL)
2004-05: SEASON CANCELLED
2005-06: 15,804 (Ranked 20th in NHL)
2006-07: 15,888 (Ranks 20th in NHL)

Taken alone, none of these additional facts means a great deal. But when one looks at the big picture, the combined impact of all three together, it is easy to see why the Lemieux/Burkle ownership group is considering relocation.

REALIGNMENT:

As for the division alignment, it has been reported that either Detroit or Columbus would take Pittsburgh’s place in the Eastern Conference with the Kansas City franchise taking the vacancy created in the Western Conference. So, in short, the move would impact one other franchise in terms of realignment.

Answer 2

It's a combination of all of the following:

1. The fans are the first to blame for the inconsistent years of attendance when the Pens were terrible. They were bankrupt then, and have yet to get out of the red.

2. The city of Pittsburgh, more specifically, the government and not the citizens. This is because they had an opportunity with the gaming commission that would have saved their team's *** from moving, but lost the vote!!

3. You Pittsburgh fans love your team now, but in 2-3 years when everyone's contracts are up for renewal and the 5 first round draft choices you have on your roster are gonna want big bucks. Which means they are gonna leave if there is a better offer. So in a few years, the stars you have now may not be there, which will more than likely cause attendance to fall once again, and no one will watch the games anymore.

4. Your arena is about to fall apart. Think of all the money it will cost to build a new one, not to mention the hours spent to build it, and the traffic problems it will create. The city of Pittsburgh in general is not exactly doing too well, with all the lay-offs in the recent years.

Answer 3

I don't live in either Pittsburgh or Kansas City, so I don't have a dog in this fight. But I do think its funny to see the Penguins fans blame the owners, the Governor, the city of Pittsburgh, politics, economics and the environment for the fact that their team might be leaving for greener pastures. Then they will turn around and say that the Kansas City area is a terrible market for hockey because they lost their franchise in the early 1970's for many of the same reasons (i.e. bad owners, poor city government, the economy).

The only real difference I can see is that the Penguins are an established franchise with a winning record, where the KC Scouts were a horrible expansion franchise that won very few games in the two years they were in Kansas City.

Mario and Ron Burkle have been trying for about seven or eight years to get a new arena in Pittsburgh and have been largely ignored by the politicians. If they make the decision to move, all of you Pens fans should direct your frustration towards the voting booth, not the team owners or the hockey fans in Kansas City. Its the politicians in Pennsylvania that let you down.

Answer 4

Pittsburgh isnt the booming town it used to be. The economy has been steady yet slow. The population is not growing due mostly to the fact that most college graduates in that area dont stay in that area when they graduate. Pittsburgh lost an NBA franchise due to the same problem years ago. The city/government obviously feels as though there will be enough $$ brought in from the 2 remaining franchises (Pirates & Steelers) both have had new stadiums built recently. I assume that Pittsburgh will regain a hockey franchise eventually, probably even bring back the Penguins from KC or Vegas after they realize those cities have no NHL fanbase. Comes to show why the NHL is struggling. Next thing you know there`ll be a team in Mexico City.

Answer 5

It is definitively the city fault. The city built the Steelers and the Pirates new stadiums. When the penguins requested a new arena at the same time, the city said they did not have the money but if they waited a few years the would build a them a new arena. So the Penguins have been waiting. It seems they finally realized that they will not be given a new arena and have decided to try and find one elsewhere.

It is not the fans fault the Penguins have had 96% attendance this season. There are many in Pittsburgh who are bigger hockey fans than football fans.

Answer 6

Ed Rendell....if the Flyers faced this problem the deal would have been done a long time ago.

Rothrock what are you talking about last year when the Pens were terrible and Mellon sold out to 93% capacity and this year have sold out the rest of the season. They are also one of the biggest TV markets for hockey...at least have some idea of what you are talking about before you comment.

Vinney it is the Pennsylvania Gaming Control Board not Pittsburgh Gaming Control Board, thus the city of Pittsburgh really didn't have very much of a say in where the slots license. I believe that the city did endorse the Isle of Capri deal but they did not have a vote in who actually got the license.

Answer 7

OK, first of all - it is definitely NOT the FANS faults!!! The Pens are filling the Mellon Arena to 97% capacity this season - and many of the games are sold out with standing room only...trust me, I've been there and stood at a railing to watch. The Penguin fans across the country contribute to the highest percentage of games watched on television in the NHL. I live in Phoenix and I order the Center Ice package every season just to watch the Penguins play. So if you think it's the fans...you obviously aren't one and it's a shame.

If anyone is to blame, we should start with Jim Balsillie along with Pittsburgh's government officials. If the Penguins leave, you mark my words...there will be riots from downtown Pittsburgh in the news. The fans will be VERY angry and they'll let everyone know how upset they are.

Answer 8

The league/government officials wanted the Organization to pay $4.1 million per year for the new arena to reach a deal, after discussions, the Penguin ownership agreed to pay $3.6 million per year for the arena plus $400,000 a year in operating expenses (workers salaries and such) totaling $4.0 million per year, which the league rejected.

Plus there was also rumors that Lemieux was not willing to share some of the ownership more than it already is in order to complete the deal (so a good chunk his fault as well if thats true).

Also, with Malkin, Crosby and Staal, the penguins revenue should vastly increase (even more than it already is starting to) because the penguins have been at around 96% capacity every home game this year which I assume should help them cover the extra $100,000 so they can contribute $4.1 million. I have been a Penguins fan since 91-92 when i was only 9 years old and had just started playing hockey, and my favorite player the next year was when the rookie Straka joined the team, i really hope they stay in Pitt. Kansas City is a terrible market for hockey (they had a team in 75-76 that folded because they had NO local support). So is this even a good place for them to go, or just a temporary solution for yet another bankruptcy. KC is a horrible place for them to move.

Answer 9

govenor swindell (rendell). he talks about how much he has done for this state. but what he doesnt mention is that most (85%) of what he does benefits the eastern side of the state.

case in point. isle of capri offered to build the penguins a new arena if granted the pittsburgh slot license, rendell stated on several occasions that this wasnt the best plan. ironically this was the only of the three bidders that didnt make campaign contributions to his gubinorial campaign. and now he is trying to say that don barden should get part of the revenue from the area around where the new arena would be

Answer 10

Look no further then Ed Rendell. Do you think he doesn't control the State Gaming board as far as influence? Do you think he couldn't have made sure that Isle of Capre would get the license, or made sure they didn't? That is the FIRST strike. Then they lowballed the deal and the team even agreed to pay more but nope nothing has gotten done yet. That would be the SECOND strike. Sure Mario was trying to get the best deal he could but that is what an owner does, and also he HAD that FREE Arena lined up. As I said the team offered to pay more. Rendell went to the media and THREATENED to go to the Board of Goveners if the team tried to move, not exactly good faith when negotiating is it? The Rendell wants to raise the State Sales Tax to pay for things like Property tax relief and his huge personal agenda, that just being one of the EASIEST things you could argue taking out since the slots money was for Property Tax relief, yet he can't apply that money to help keep the team? Wait until he sees all the money the State and espically the city will lose once the team moves. We aren't just talking about the players as far as employees.

Answer 11

It's the states fault. The Pa. goverment has been asked for 8 years to give the penguins a new arena. Infact, Lemiuex came before the Pirates for a new phacility. They have jusy kept putting it pff untill recently. Then when they get a chance to put all the screw ups away, they turn down Isle of Capri for the slots license, which whoild have built them a new areana free of charge. Now they will pay the price. They will lose tax revenue off the tickets, food, merchandise sold, rent, and many other things. They screwed up bad and will now have to pay the price.