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Owner won't matter
Isle of Capri Casinos, based in Biloxi, Miss., has invested a "few million dollars" in a proposal that would use slot machine proceeds to build an arena to keep the hockey team in Pittsburgh, company President Tim Hinkley said. If it wins the license, the company would give the Penguins $290 million for a new arena.
Those plans do not change if team owner-captain Mario Lemieux sells to new buyers.
"The deal was always looked at from a long-term standpoint," Hinkley said during an interview at the company's Biloxi casino. "It transcended ownership."
Should the company not win one of the available gambling licenses, chances for a new arena decrease, and the chances the Penguins would call another city home increase considerably.
That unpleasant possibility is a big factor in team chairman and CEO Mario Lemieux's decision to officially put the team up for sale.
"I said before I'm not going to be the one to move the franchise," Lemieux said Thursday morning at Mellon Arena. "There's a possibility that could happen if we don't get the license and the arena doesn't get built."
Lemieux admitted concern that his legacy would be damaged should the team relocate, but said the entire ownership group feels the time is right for the move.
"I hope none of you expected Mario to own this team forever," said team president Ken Sawyer, who will immediately assume Lemieux's position as CEO. "He's done more than he should, and more than was asked to do, and teed us up perfectly in the community to jump in on a great opportunity."
Lemieux and Sawyer said the timing of the announcement that the team is on the market was based on a number of factors: the proposal by Isle of Capri, an influx of young talent led by Sidney Crosby, and the National Hockey League's new collective bargaining agreement.
"If we get a new arena, great," Lemieux said. "It's something we've been looking forward to for many years. And whether I'm part of it or not, that's something this franchise absolutely has to have."
Under the Penguins' contract at Mellon Arena, the team can start looking for a new hometown after June. The state Gaming Control Board, however, might not award the casino licenses until early 2007. Isle of Capri is competing with three other bidders for the city's slots parlor.
Allegheny County Chief Executive Dan Onorato has raised concerns the team could leave town before the state awards the licenses. Kansas City is building a new arena and wants a professional hockey or basketball team by fall 2007.
Lemieux was asked several times yesterday about the responsibilities of a new ownership group as far as keeping the team in Pittsburgh.
"The new owners will be bound by the same agreement we have with Isle of Capri," Lemieux said. "Certainly, our preference would be to keep the team in Pittsburgh forever."
Lemieux refused to identify any of the groups that have inquired, but did say there were no local groups involved.
Last summer, he began talks to sell the team to Silicon Valley venture capitalist and friend William "Boots" Del Biaggio III. But after the NHL contract was settled and the team won the lottery to draft Crosby, Lemieux and partner Ron Burkle decided to retain their majority ownership stake.
Del Biaggio, 37, said yesterday he is no longer interested in owning the team.
Sawyer warned that local ownership will not be the Penguins' first priority. "We're not going to sell the team for a third of its value just to have local ownership," he said.
"Having local ownership is a great asset, and we would look very favorably on that," Sawyer said. "All things equal and if it's a coin toss, we encourage local people to step up and be a part of this."
Isle of Capri would pay for the Penguins' new arena by borrowing enough money to give the team the full amount up front, then paying off the bond with casino revenues. Estimated payments on a $290 million, 15-year bond range from $20 million to $30 million a year.
Hinkley estimates that Pittsburgh's stand-alone casino would bring in about $400 million a year in revenue, while clearing about $100 million a year in profits. Isle of Capri would pay the arena bond from its profits.
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