Penguins to KC article

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Postby KCHockey on Tue May 09, 2006 2:08 pm

Then on top of that, giving up $4M a year for that new building.


Where does $4M come from?

I thought it was $2.9M.
http://www.post-gazette.com/pg/06090/678324-61.stm

The borrowing would be paid off over 30 years with annual contributions of $7.5 million from whoever gets Pittsburgh's casino, $7 million from a slots-backed state development fund, $2.9 million in rent from the Penguins and $1.2 million from the sale of arena naming rights
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Postby Pitts on Tue May 09, 2006 2:08 pm

imau2fan wrote:
That's nice. Any SMART investor would take the extra dough.


Fine. Then Sawyer and Mario should stop blowing smoke up our a***s about their altruistic desire to keep the Pens in Pittsburgh. Just call a spade a spade--absent an IOC win, we're up for the highest bidder. And since an IOC win would be automatically be the highest bid, it's nothing more than franchise free agency, baby.


That's exactly what it is.

imau2fan wrote:Why do you think Sawyer was so eager to cry about the "gaps" in Plan B? To keep the focus on the highest bid--IOC. Why should Sawyer and Mario give a hoot about Plan B's supposed "gaps" anyway? They won't own the team anymore! That is, unless it will depress the sale price of course. Don Barden has a point.


Why should there be a problem with the current ownership group trying to pump up their value? That's what business is all about.

What I don't get is fans that think any ownership goup owes "us" anything. Really. Its all about business and making money. Mario and the current ownership group stand to make a decent chunk of change in this transaction. They should be allowed to get top dollar for their investment.

This has nothing to do with Mario being a "God" in Pittsburgh. He made an investment in a team and reserves the right to sell to who and for what he wants. Period.
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Postby imau2fan on Tue May 09, 2006 2:17 pm

This has nothing to do with Mario being a "God" in Pittsburgh. He made an investment in a team and reserves the right to sell to who and for what he wants. Period.


Fine. But I still suspect far less fans would defend the principles of capitalism, if the capitalist in question were Kevin McClatchy. Or even Dan Rooney for that matter.
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Postby pfim on Tue May 09, 2006 2:21 pm

imau2fan wrote:
This has nothing to do with Mario being a "God" in Pittsburgh. He made an investment in a team and reserves the right to sell to who and for what he wants. Period.


Fine. But I still suspect far less fans would defend the principles of capitalism, if the capitalist in question were Kevin McClatchy. Or even Dan Rooney for that matter.


Again, they already have their publicly funded castles.

They're up for the highest bidder regardless of the IOC application. I'm sorry that reality doesn't seem to jive with your idea of a sports hero, but that doesn't mean you should expect Mario Lemieux to do something stupid to make you happy.
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Postby newarenanow on Tue May 09, 2006 2:34 pm

KCHockey wrote:
Then on top of that, giving up $4M a year for that new building.


Where does $4M come from?

I thought it was $2.9M.
http://www.post-gazette.com/pg/06090/678324-61.stm

The borrowing would be paid off over 30 years with annual contributions of $7.5 million from whoever gets Pittsburgh's casino, $7 million from a slots-backed state development fund, $2.9 million in rent from the Penguins and $1.2 million from the sale of arena naming rights


You are correct. I'm using what the Pens say they are contributing under plan B. The $2.9M plus the $1.2M of naming rights. THe Pens are saying that the naming rights at the Mellon Arena are budgeted under their income already, unlike the naming rights money used to fund Heinz field and PNC park since that was new found money(since 3 Rivers didn't have naming right money).

The Pens feel that they are losing out on income that they already have from the Mellon naming rights. If you listen to any Pens spokesman, they say the total will be $4M. It all depends on what point of view you are looking at. Sorry for the confusion.

As for iamau2fan, you can't expect anyone to take a $20-30M hit on the selling price to keep the fans happy. These guys invested money into the team to make money and have been taking loses the last few years to make you happy. Now they want their money back plus a profit. That is how these guys got rich. If someone really wanted to keep the Pens in the burgh, they will pay the price, but I don't see that happening.
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Postby pfim on Tue May 09, 2006 2:46 pm

You are correct. I'm using what the Pens say they are contributing under plan B. The $2.9M plus the $1.2M of naming rights. THe Pens are saying that the naming rights at the Mellon Arena are budgeted under their income already, unlike the naming rights money used to fund Heinz field and PNC park since that was new found money(since 3 Rivers didn't have naming right money).

The Pens feel that they are losing out on income that they already have from the Mellon naming rights. If you listen to any Pens spokesman, they say the total will be $4M. It all depends on what point of view you are looking at. Sorry for the confusion.


I agree with them, but it will be no better with AEG in Kansas City to counter your point. They will have to pay just as much if not more in rent and services.
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Postby Pitts on Tue May 09, 2006 3:00 pm

pfim wrote:I agree with them, but it will be no better with AEG in Kansas City to counter your point. They will have to pay just as much if not more in rent and services.

That's part of my point. Even if a new group had to absorb Mellon Arena losses for a year or two, the reward would be a sweetheart deal in a new arena that sells out most every night with Crosby, Malkin and Fluery headlining in an already stable market. And, another 10 years of playoff fun.
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Postby KCHockey on Tue May 09, 2006 3:14 pm

The Pens feel that they are losing out on income that they already have from the Mellon naming rights.


So, a new owner would get $0 income from naming rights in Pittsburgh.

AND

A new owner would get $0 income from naming rights in KC. The naming rights in KC, Sprint, are already going toward financing the construction of the new arena.
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Postby Pitts on Tue May 09, 2006 3:16 pm

KCHockey wrote:
The Pens feel that they are losing out on income that they already have from the Mellon naming rights.


So, a new owner would get $0 income from naming rights in Pittsburgh.

AND

A new owner would get $0 income from naming rights in KC. The naming rights in KC, Sprint, are already going toward financing the construction of the new arena.

In plan B, the naming rights are tentatively earmarked toward construction. If IoC gets the deal, the naming rights are up for grabs, I believe.
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Postby Draftnik on Tue May 09, 2006 8:54 pm

newarenanow wrote:
KCHockey wrote:
Then on top of that, giving up $4M a year for that new building.


Where does $4M come from?

I thought it was $2.9M.
http://www.post-gazette.com/pg/06090/678324-61.stm

The borrowing would be paid off over 30 years with annual contributions of $7.5 million from whoever gets Pittsburgh's casino, $7 million from a slots-backed state development fund, $2.9 million in rent from the Penguins and $1.2 million from the sale of arena naming rights


You are correct. I'm using what the Pens say they are contributing under plan B. The $2.9M plus the $1.2M of naming rights. THe Pens are saying that the naming rights at the Mellon Arena are budgeted under their income already, unlike the naming rights money used to fund Heinz field and PNC park since that was new found money(since 3 Rivers didn't have naming right money).

The Pens feel that they are losing out on income that they already have from the Mellon naming rights. If you listen to any Pens spokesman, they say the total will be $4M. It all depends on what point of view you are looking at. Sorry for the confusion.

As for iamau2fan, you can't expect anyone to take a $20-30M hit on the selling price to keep the fans happy. These guys invested money into the team to make money and have been taking loses the last few years to make you happy. Now they want their money back plus a profit. That is how these guys got rich. If someone really wanted to keep the Pens in the burgh, they will pay the price, but I don't see that happening.


Did you know the Pens will be paying the SEA $3M annually in rent and operating rights fees under their own IoC plan? That is a fact, not my opinion. I'm not going to look up the links because I've posted them infinite times before at this forum.

There is no way AEG can offer the Pens 100% of the arena revenues at Sprint because they have to recoup their $50M investment. The deal the Pens are angling for will give them 100% of revenue rights in a Pittsburgh arena. There is much more $$ in that model with non-hockey events for 150 nights per year. If the Pens get their terms from Rendell, Plan B can be every bit as lucrative as the IoC plan. Rendell even said he was willing to negotiate which means they could probably eliminate the $1.2M in naming rights giveback if they wanted to. There is no logical reason for Rendell to lead with his best offer.

If another city offers the Pens 100% of arena revenues for all events that would be a very real threat to take the team. That is not KC.

The Pens probably would be less profitable in the Igloo for 3 more seasons than they would the first 3 seasons in KC, but we can't project that with certainty. What is certain though is the financing model, ROI, and valuaiton for these types of deals are calculated on revenues/profitability over a much longer term than 3 years, so the initial ROI would not trump a model that showed Pittsburgh would provide a much better ROI over a 10, 15, 20 year period.

These kind of threats are the best news fans that want to keep the Pens in Pittsburgh can ask for. The only leverage the Pens have to extract the exact deal they want from Rendell is their threat to leave. The more real the threat is the more leverage they have.
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Postby Pitts on Tue May 09, 2006 10:39 pm

Draftnik...I always love reading your posts on this subject. Your knowledge of the details of such issues blows my mind. Thank you for keeping the even keel on this subject. I agree with every point you make. I do believe the Pens will stay in Pittbsurgh, and everytime I read a post of yours, it reassures my opinion.
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Postby newarenanow on Wed May 10, 2006 10:09 am

Sorry about the post above, it didn't record my post.

But anyway, Draftnik, in a way I agree with you.

My point though is that if a new ownership sees an oppurtunity in another city, and places the highest bid, the team is gone, no matter how great the oppurtunity is in Pittsburgh.

And for those who think that the current ownership group will take less money to keep the team in Pittsburgh does not live in reality. They will take the highest bid. Now granted, if the local group offers $2-3M less to keep the team in Pgh., I think they will take it. But if the gap is $10M or greater, they are going to sell to the out of town buyer.

I am in no way saying the team is definitely moving if the IOC doesn't win, but I think the outcome that the team stays in Pittsburgh if the IOC doesn't win is pretty slim.

Heck, we don't even know what kind of revenue percentages the Pens will get under Plan B and if they have to pay rent on top of the $2.9M construction costs.

This is going to be a huge roller coaster, with the only scenerios of the team definitley staying is if the IOC wins.
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