Pittsburgh Penguins?

Question

What is the chance that the Pens' will move to Kansas City

Answer 1

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 people above). 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.

KANSAS CITY'S POPULATION:

It is a mistake to assume that Kansas City's population is only half a million. The city proper is about a half a million, but the entire Kansas City Metro area is divided in half by the state line of Kansas and Missouri. The Metro area is approximately 1.6 million people and the 22nd largest television market in the country. If you live in Pittsburgh and don't believe that the Kansas City market could support this franchise, you are just kidding yourself. Kansas City IS a great sports town, one need look no further than the 80 thousand screaming Chiefs fans that fill Arrowhead Stadium in the fall to watch what is at best an average NFL team. If the Pens were to relocate and continue to put an above average product on the ice like they do in Pittsburgh, they will succeed in Kansas City with flying colors.

MY TAKE:

I lived in Minnesota when the North Stars moved to Dallas. So, I feel your pain Pens fans. But don't worry Pens fans, there is hope for you yet. It only took us 7 years to get a new expansion franchise. Maybe by then you will have better politicians in Pennsylvania who will care about hockey and the image of your city.

Answer 2

There is a fairly decent chance it will happen at this point.

To break it down in actual dollar terms, The Penguins had originally offered to pay $2.86Million per year to help build a new arena in Pittsburgh.

The offer is now up to $4.5 million a year for the new arena and parking, which is actually as much as was asked for in November and that is still not enough to reach an argeement.

So if they are basically agreeing to pay the full amount, minus an $8 million first year commitment and still don't have a deal, then it stands to reason that the city is barely moving in their attempts to reach an offer.

Again looking at plain numbers, The Isle of Capri deal would have allowed them to stay in the city and pay $0

And the Kansas City deal would allow them to Move to KC and not only pay $0, but have certain rights of administration over the arena itself and Half the building revenue.

There is also some legal and political problems coming to the front.

The Casino that did win the contract is pledging $7.5Million towards an arena, however that funding is being contested in the State Supreme Court, and the State itself agreed to match it at $7.5million
Despite the Pens coming up to the full amount requested the government insists they still need more, but there is a refusal to share with the Penguin's ownership actual financing plans of the Arena.

The Penguins insist that the combined $19million a year plus their $8.5million up front commitment should more than pay for the $290million arena over the 30 year amortization by their calculations, with the government claiming otherwise without providing proof in financial terms.

There is a political rift in that the Governor of the State has yet to sit down in the negotiations, yet he controls the purse when it comes to allowing any additional state funding.

In whole, The Pens have come up approximately $1.8Million a year from their first offer and the government has only raised their side by $0.5Million

I do not at this point see any possible universe in which the Penguins agree to pay More than the $4.5 million/year offered now, which is already higher than what the State asked 1 year ago.

So the possible Outcomes are:

1) More Money is pledged by the city or state to cover Funding.

2) They determine funding is sufficient at currently pledged levels, as the Penguins claim.

3) Penguins agree to pay more

4) A 3rd party agrees through some external arrangement to cover shortfall

5) The Penguins move to Kansas City

6) The Penguins move to a different City.

It is still very much in the realm of possibility that the Governor will intercede and authorize additional funds at the last moment, knowing that if he does not blame is going to rest squarely on his shoulders, Because at this point after all this effort, No one is ever going to Blame Lemieux.

However I believe this is the only action that will actually save the team. At this point the Pens are not moving, they agreed to 100% and then some of the requested amount. The Casino won't move, because, why would they? There's no real time for a 3rd party to enter into it.

So with Pittsburgh on the one hand charging $142.5million over 30 years, and Kansas City actually offering to Pay arena Revenue instead of asking for payment on the other hand.. The business choice is obvious. On top of it all, They'd still have to wait 2 or 3 years for the thing to actually be built, meaning they're missing out on huge revenue during their most spectacular years.

The Only reason Lemieux is even listening to negotiations is because moving it will break his heart. But after the ill-will created by these negotiations, he appears to be left with the feeling that no one cares if they stay.

As for if they go to Kansas City... Well, the City has a population of only Half a million, and it's not really a big hockey area. They've got the arena, but then What? Can they really fill a Hockey arena?

You've got to consider some other contenders, Winnipeg wants a team back, has more people and it's Canadian. They got killed in a pre-Salary cap world, but Now I can't imagine it would be a problem.
Jim was hoping to move it to Ontario if he didn't get a deal done in Pittsburgh, Hamilton is often considered to be a distant Suburb of Toronto, but still has over half a million people in it making it third Largest in Ontario...#1 Toronto(3.5Million) and #2 Ottawa(800,000) have teams, and trust me, you can't get tickets.

Some other Cities like Houston have expressed interest as well, so it's definately not a given that Kansas city is the front Runner when all is said and done. They are probably the Smallest City in contention, they just have the benefit of having a cool Arena.

Overall, Almost 50/50 if they stay or go at all, all up to the Governor...and If they do Go, I'd say a 1 in 3 chance it will actually Be Kansas, Given the Choice between Small Free US city, Small Canadian City, or Big US City.

Answer 3

I'd say about 50/50 now because Lemiux wants to keep them in Pittsburgh

Answer 4

very high, tsn and espn just said that the owner's of the pittsburgh penguins are "aggresively and actively seeking relocation of the pittsburgh penguins"

Answer 5

i'm saying that they will stay in da burgh simply because the NHL said "all the city of pittsburgh needs to do is present a viable payment plan the nhl will do all they can to stop the move"

Answer 6

From what I have heard its not very likely they will go to KC, but rather to Seattle. Too bad the city wont cough up the cash for a new building.

Answer 7

Bad chance

Answer 8

I think it will be a 50/50 chance becaue you can never perdict the future!