Should Mario take less money?

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Postby imau2fan on Wed May 10, 2006 6:12 pm

You can't be serious. You want them to sign a 30 year lease without even knowingt what the lease is??????

Laughable.


No, I said sell the team to a local buyer, and let them decide whether Plan B is palatable.
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Postby Crash on Wed May 10, 2006 6:17 pm

imau2fan wrote:
You can't be serious. You want them to sign a 30 year lease without even knowingt what the lease is??????

Laughable.


No, I said sell the team to a local buyer, and let them decide whether Plan B is palatable.


And again, what LOCAL buyer is out there?

I'm waiting.
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Postby skullman80 on Wed May 10, 2006 6:38 pm

Crash wrote:
imau2fan wrote:
You can't be serious. You want them to sign a 30 year lease without even knowingt what the lease is??????

Laughable.


No, I said sell the team to a local buyer, and let them decide whether Plan B is palatable.


And again, what LOCAL buyer is out there?

I'm waiting.


The guy from Ohio has shown interest in keeping the team here, and I believe he has put down the 100,000 to look at the fiances(I could be wrong).

He may not be local, as in living in PA, but he wants to keep the team here.
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Postby Draftnik on Wed May 10, 2006 9:40 pm

Crash wrote:$90 million? That's $53 million less isn't it?

I would also bet the Pens didn't earmark naming rights money to go towards constuction also.

Rendell also said they had $90 million in state money waiting.

Where is it?

EVERYTHING Rendell is basing this on is from slots revenue/projections of slots revenue.

Well what if the casino fails?

What if Harrah's, as is their glorious history much more than IOC, threatens to close the casino unless payments are cancelled/changed?

How is the arena paid for then?


I have no idea where you get $143M. I recall the lease payments per Rendell were ~ $4.1M per year (30 yrs) plus ~ $8M upfront. The Pens may be losing ~ $7M this season per Sawyer, but that does not mean their losses or another owner's losses would be ~ $7M per season in the Igloo while they wait for a new arena to be built. Sawyer has not divulged the actual operating loss/profit of the Pens. The final $7M loss could be because of acceleration of debt repayment, paying back lines of credit or other means they used to finance the organIzation during the lockout, or any other number of things.

We are speaking different languages.

As I said before Rendell said his offer was negotiable which is equivalent to asking somebody to take your wallet. It obviously is not his best offer when he said it was negotiable, but as I said before we are speaking different languages.

As far as comparing IoC to Harrah's, that is a total joke. If IoC could legitimately compete against Harrah's they wouldn't have to offer outrageous things like a free arena to attract attention to their bid. They are and always were a longshot, so that is why they have to stand on their head and juggle several objects to attract attention to themselves. They are not offering to build an arena because they love the Pens or are good Samaritans that love Pittsburgh, thay are offering to build an arena because they can't win without it.

How do you get out of bed every morning? Bad things happen to people every day. What if you fall down the stairs? What if you are hit by a car? What if you are hit by a stray bullet? What if a random stranger punches you in the face because you whine too much? What if somebody you know punches you in the face because you whine too much?
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Postby Draftnik on Wed May 10, 2006 10:07 pm

newarenanow wrote:
Draftnik wrote:
No owner will keep this team here if they have to pay $143 mil towards an arena. That's more than what they would pay for the team.


Guess what? They are already paying $90M in lease payments for 30 years under the IoC plan. Tquote]

Plan B is asking them to pay $53M more over 30 years for their plan. Also, the new owner will be taking $7-8M of losses on a two round playoff year for the next 3 years.

Add those two together, that is half of the potential selling price.

And KC has all of their suites sold and almost 12,000 season ticket holders for a team that does not exist already. Don't say they can't sell tickets.


When somebody says they are willing to negotiate that is an invitation to ask for a better deal. Rendell will give the Pens a better deal. I'm not sure where you get $53M more, I think it is closer to $41M, but either way that is negotiable according to Rendell and also $41M is not the % of the sale price you think it is because the sale price is based on present value $$$ while the unlikely $41M is future value. The present value of that would only be 60% to %70% (just a guess on the % it could be more or less, somebody with a link to a calculator could look it up if they care).

Do you understand the difference between a net loss/profit and an operating loss/profit and how the final figure can be manipulated with debt (principal & interest) and all kinds of accounting machinations. The $7M loss may or may not reflect the true operating profitability of the Pens based on their revenues and player payroll.

KC lost the Scouts and the Kings in the 70s in what was a state of the art arena at the time. KC has not experienced explosive growth like Denver to show their market has more potential. KC is not a hockey hotbed that lost a team because of a bad arena deal like Minneapolis/St. Paul. There is no logical reason to think it is a hockey hotbed. AEG invested $50M in Sprint because they want to make lots of $$$ by running the building and controlling all the revenue streams. They didn't invest $50M to get a measly $50M back. They will not offer the hockey and non-hockey revenue streams an NHL team could get with full control of an arena.

The guy from Toronto said KC still hadn't started to sell tickets yet. The goal is 12K. AEG has some deposits on suites. There is a reason no NBA or NHL team and/or prospective owners have been jumping on the KC bandwagon even though the arena has been in the works for a while now. With AEG running the show the profits their business model extracts will choke the major tenant. KC is not LA with 3 pro sports teams anchoring Staples. The margins they extract on KC sporting events have to be higher than LA because there will be significantly less sporting events held in the venue.

I could go on and on but we can just agree to disagree.
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Postby NIN on Wed May 10, 2006 10:15 pm

I think Mario should take as much money as he can. Whatever happens to the team after that has nothing to do with him. He has done all he can. If the ignorance and greed of our local politicians-who I eagerly await to vote out of office for WHOEVER HITLER FOR ALL I CARE- wants the team to leave this badly then there is nothing he can do anymore.

Take all that you can get Mario Lemieux, you earned every red cent. GO move someplace warm and sunny and relax. If you want to wip out your penis and pee all over the Mellon Arena before you leave I would'nt blame you. take a big old steaming poop there too.

This city does'nt deserve a hockey team. It is too God damn dumb. Please vote for the democrats you mindless sheep. Vote for them to stay in office. It's all you know so vote out of fear and ignorance just like you have lived your lives forever.
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Postby Crash on Wed May 10, 2006 11:23 pm

Draftnik wrote:
newarenanow wrote:
Draftnik wrote:
No owner will keep this team here if they have to pay $143 mil towards an arena. That's more than what they would pay for the team.


Guess what? They are already paying $90M in lease payments for 30 years under the IoC plan. Tquote]

Plan B is asking them to pay $53M more over 30 years for their plan. Also, the new owner will be taking $7-8M of losses on a two round playoff year for the next 3 years.

Add those two together, that is half of the potential selling price.

And KC has all of their suites sold and almost 12,000 season ticket holders for a team that does not exist already. Don't say they can't sell tickets.


When somebody says they are willing to negotiate that is an invitation to ask for a better deal. Rendell will give the Pens a better deal. I'm not sure where you get $53M more, I think it is closer to $41M, but either way that is negotiable according to Rendell and also $41M is not the % of the sale price you think it is because the sale price is based on present value $$$ while the unlikely $41M is future value. The present value of that would only be 60% to %70% (just a guess on the % it could be more or less, somebody with a link to a calculator could look it up if they care).

Do you understand the difference between a net loss/profit and an operating loss/profit and how the final figure can be manipulated with debt (principal & interest) and all kinds of accounting machinations. The $7M loss may or may not reflect the true operating profitability of the Pens based on their revenues and player payroll.

KC lost the Scouts and the Kings in the 70s in what was a state of the art arena at the time. KC has not experienced explosive growth like Denver to show their market has more potential. KC is not a hockey hotbed that lost a team because of a bad arena deal like Minneapolis/St. Paul. There is no logical reason to think it is a hockey hotbed. AEG invested $50M in Sprint because they want to make lots of $$$ by running the building and controlling all the revenue streams. They didn't invest $50M to get a measly $50M back. They will not offer the hockey and non-hockey revenue streams an NHL team could get with full control of an arena.

The guy from Toronto said KC still hadn't started to sell tickets yet. The goal is 12K. AEG has some deposits on suites. There is a reason no NBA or NHL team and/or prospective owners have been jumping on the KC bandwagon even though the arena has been in the works for a while now. With AEG running the show the profits their business model extracts will choke the major tenant. KC is not LA with 3 pro sports teams anchoring Staples. The margins they extract on KC sporting events have to be higher than LA because there will be significantly less sporting events held in the venue.

I could go on and on but we can just agree to disagree.


Where has Rendell said he is willing to negotiate? I've yet to see it.

It's not $143 mil, I was wrong there, it's $131.5 mil.
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Postby netwolf on Wed May 10, 2006 11:25 pm

Has anyone other than Draftnik posted facts in this thread. Most of the other stuff I've read seem the be "I think..." or "They're hinting.." or "I know [Mario, Sawyer, etc] is thinking..." or "What if..."

If the team ends up leaving there are two things I am sure of: I will never set foot in downtown again and the only people who will blame Mario for it will be either the local politicos and their brain-dead followers and/or poeple that already didn't like him to begin with.
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Postby newarenanow on Thu May 11, 2006 9:50 am

Draftnik wrote:
newarenanow wrote:
Draftnik wrote:
No owner will keep this team here if they have to pay $143 mil towards an arena. That's more than what they would pay for the team.


Guess what? They are already paying $90M in lease payments for 30 years under the IoC plan. Tquote]

Plan B is asking them to pay $53M more over 30 years for their plan. Also, the new owner will be taking $7-8M of losses on a two round playoff year for the next 3 years.

Add those two together, that is half of the potential selling price.

And KC has all of their suites sold and almost 12,000 season ticket holders for a team that does not exist already. Don't say they can't sell tickets.


When somebody says they are willing to negotiate that is an invitation to ask for a better deal. Rendell will give the Pens a better deal. I'm not sure where you get $53M more, I think it is closer to $41M, but either way that is negotiable according to Rendell and also $41M is not the % of the sale price you think it is because the sale price is based on present value $$$ while the unlikely $41M is future value. The present value of that would only be 60% to %70% (just a guess on the % it could be more or less, somebody with a link to a calculator could look it up if they care).

Do you understand the difference between a net loss/profit and an operating loss/profit and how the final figure can be manipulated with debt (principal & interest) and all kinds of accounting machinations. The $7M loss may or may not reflect the true operating profitability of the Pens based on their revenues and player payroll.

KC lost the Scouts and the Kings in the 70s in what was a state of the art arena at the time. KC has not experienced explosive growth like Denver to show their market has more potential. KC is not a hockey hotbed that lost a team because of a bad arena deal like Minneapolis/St. Paul. There is no logical reason to think it is a hockey hotbed. AEG invested $50M in Sprint because they want to make lots of $$$ by running the building and controlling all the revenue streams. They didn't invest $50M to get a measly $50M back. They will not offer the hockey and non-hockey revenue streams an NHL team could get with full control of an arena.

The guy from Toronto said KC still hadn't started to sell tickets yet. The goal is 12K. AEG has some deposits on suites. There is a reason no NBA or NHL team and/or prospective owners have been jumping on the KC bandwagon even though the arena has been in the works for a while now. With AEG running the show the profits their business model extracts will choke the major tenant. KC is not LA with 3 pro sports teams anchoring Staples. The margins they extract on KC sporting events have to be higher than LA because there will be significantly less sporting events held in the venue.

I could go on and on but we can just agree to disagree.


First off, yes I do understand operating and net gains and losses. I'm a CPA. I work on large clients all year.

Second off, the Pens announced over a year ago that all of their debt from the bankruptcy has been paid off. That leaves normal debt that the current ownership and new ownership will have to assume. The only amount that affects the earnings is the interest, which yes, will go down every year as debt is paid, but not significantly enough to make a dent in the Pens losses. The principal only affects cash flow as they are both balance sheet items.

Third, I agree the Pens can negotiate Plan B, but how much? Where is the other money going to come from? The slots applicants will not pay anymore, and the ony other source of payment is from the tax fund from the slots license that Rendell said he will contribute $7M a year. If you start dipping into that more, all hell will break lose. And don't say parking taxes and other entertainment taxes because those are high enough here in Pittsburgh and people won't stand for that.

Finally, the guy that interviewed Fingold was on Savran yesterday and he said that Fingold's goal is to own a hockey team. If the IOC wins, he will still buy the team and keep them in the burgh per the IOC agreement. Second, he will look at Plan 'B' and see if it's feasible, but he is not too keen on it. Third, KC is in negotiations with him and may strike a deal that is rent free at the new arena. They may not control all profits, but they won't be paying anything either, so I don't know where you are getting your $3M a year fee to play at KC.

We can agree to disagree, and I know we both want the Pens to stay in Pittsburgh. I hope the day will come when we can just talk about what players are in the system and argue about that. But until then, this will be a huge roller coaster. I'm just not as optimistic as you.

As for netwolf, we are all using pretty much the same figures. Draftnik has a positive spin. Others have a negative spin or are playing devils advocate. No one knows all of the facts, and I'm sure we won't until the final outcome. There is a lot going behind the scenes that we don't know on both sides.
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Postby HomerPenguin on Thu May 11, 2006 1:12 pm

skullman80 wrote:
Crash wrote:
imau2fan wrote:
You can't be serious. You want them to sign a 30 year lease without even knowingt what the lease is??????

Laughable.


No, I said sell the team to a local buyer, and let them decide whether Plan B is palatable.


And again, what LOCAL buyer is out there?

I'm waiting.


The guy from Ohio has shown interest in keeping the team here, and I believe he has put down the 100,000 to look at the fiances(I could be wrong).

He may not be local, as in living in PA, but he wants to keep the team here.


The guy from Ohio also probably doesn't have enough money to buy the team for himself and has not said one word about whether or not he's found other investors. The out-of-town interest is coming from groups and individuals who are likely ready to buy the team, not still in the process of finding partners.

Anyway, "U2 Fan" Abe just likes to come in here and trash the Penguins every once in a while so he can put it on his next annual review at Forest City. Next he'll demand that Lemieux sell the team to the gnomes who live under the ice at the arena, and then he'll demand that Lemieux sell the team for $4.67 to Donnie Iris to insure that the team never leaves, because if Lemieux really cared about the city he would want to sell the team for 0.0000003% of its market value.
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Postby HomerPenguin on Thu May 11, 2006 1:18 pm

NIN wrote:This city does'nt deserve a hockey team. It is too God damn dumb. Please vote for the democrats you mindless sheep. Vote for them to stay in office. It's all you know so vote out of fear and ignorance just like you have lived your lives forever.


People who want to blame this on the Democrats alone astound me. Incompetence is incompetence, and corruption is corruption; they're not partisan issues. Do you HONESTLY think that a Republican machine would have responded to this situation any better? Don't the 8 years of Tom Ridge's inaction on a new Pittsburgh arena tell you anything? The inaction of the Republican state legislature?

No politician wants to be seen as cowtowing to the interests of a pro sports franchise in this political climate. On the other hand, no politician wants to be known as the guy who let the (football, hockey, baseball, whatever) team leave town. Sadly, instead of leading, their response usually is to cower under a desk and hope things come out OK on the other side. The lack of leadership is universal, it doesn't belong exclusively to either major party.
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Postby imau2fan on Thu May 11, 2006 2:38 pm

Anyway, "U2 Fan" Abe just likes to come in here and trash the Penguins every once in a while so he can put it on his next annual review at Forest City. Next he'll demand that Lemieux sell the team to the gnomes who live under the ice at the arena, and then he'll demand that Lemieux sell the team for $4.67 to Donnie Iris to insure that the team never leaves, because if Lemieux really cared about the city he would want to sell the team for 0.0000003% of its market value.


You don't do yourself any favors when you need mindless hyperbole to prop up your point.

A. Trust me, Forest City is as villainous to me as they are to you. And I agree with the PG........the fact that they're still holding out on making an ironclad offer toward the arena, even in the face of Barden's contribution, smells like a fix to me. Or at least makes me scratch my head.

B. If the "Donnie Iris" nonsense is meant to lump me in with the yinzers, you got the wrong guy. I haven't lived in PA since 1988. But I still follow the Pens faithfully from here at Andrews Air Force Base.

Look, we're all on pins and needles now, because we desperately want the same thing--our hockey team preserved. And therefore, I refuse to put one man's millions over the broader priority.

If choosing a local buyer would put Mario in a homeless shelter, I could understand folks supporting him. But if it's the difference between being really rich and merely rich, then sorry if I don't feel as rigidly principled as the rest o' yunz.

Let me give you an example.........

Does anyone remember the Igloo Report? It's still out there, but hasn't been updated in years. Anyway, the writer drove me nuts, because he was given to hyperbole, among other things.

I remember the short span of Roger Marino's ownership, and the war he had with Mario over the money he was owed. The writer at the time wrote something to the effect of, "I will never again buy another Penguins ticket until Mario is paid every cent of what he's owed."

That left me flabbergasted. Even if Mario did have a legal claim to the money..........are you a Mario fan, or a Penguin fan? It's not like Mario was going to suffer either way.

So when I see folks say, "Well, I'd hate to see the Pens leave, but I support Mario's efforts to get the maximum sale price possible, by whatever means necessary," it has the same odd smell to it.

I just find it interesting. Whenever a big-name, free-agent Steeler or Pirate (or any other Pen for that matter) leaves for more money, they often raked over the coals for being disloyal and caring only about the money. And those players are ultimately replaceable.

But Mario is hinting at doing roughly the same thing, and suddenly folks ring the bell of capitalism. Except this time, we'd be permanently losing an entire franchise, instead of merely losing a replaceable player.

You can agree to disagree, but my gut tells me that if you took out the word Mario, and replaced it with any other, the gamut of opinions would look a bit different.
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Postby newarenanow on Thu May 11, 2006 2:57 pm

Your comparing Mario the player to the situation. If he left the team for a few more million, and left on bad terms like Jagr, then screw him.

But we are talking about ownership. He put his own money into this as an investment. And like all investments, you try to maximize your profits. And he is only a small part of the ownership. There are plenty of other people in the group that will out vote him in a second if it means taking less money. So even if Mario wanted to give the team to a local investor, it would never happen.

Don't blame this on Mario.
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Postby imau2fan on Thu May 11, 2006 3:18 pm

Your comparing Mario the player to the situation. If he left the team for a few more million, and left on bad terms like Jagr, then screw him.


But didn't Mario's situation ultimately lead to the franchise's situation? It started with Mario wanting his money, and..............

When asked about Fingold’s proposal, Penguins owner Mario Lemieux told reporters, “I’m going to do what has to be done to protect my investment, no matter what the options are from now on.â€￾


http://www.kansascity.com/mld/kansascit ... 532940.htm

..........is culminating with Mario wanting his money. You're right that he has investors to answer to, but that quote says nothing about them. It's my investment, not our investment.

Look, he has the right to do what he wants. But don't try to look so altruistic about trying to keep the Penguins in Pittsburgh. If you were, the supposed "gaps" in Plan B would be irrelevant to you, because you won't own the team anymore. But obviously it could make a difference in the sale price, which is ultimately the point. He and Sawyer shouldn't be so disingenuous.

Or as Stuart Scott would say--just keep it real, yo.
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Postby pfim on Thu May 11, 2006 3:21 pm

So when I see folks say, "Well, I'd hate to see the Pens leave, but I support Mario's efforts to get the maximum sale price possible, by whatever means necessary," it has the same odd smell to it.


I'm not sure who is "supporting" his efforts to get the maximum price, it's more that a lot of us live in the real world and understand that the Pens won't be undersold to a fictitious local investor, and that 8 years after the Pens were taken out of bankruptcy, there is still no arena. And for the 50 bazillionth time, Mario doesn't even own 50% of the team.

Also, this situation is not comparable to Barry Bonds or Plaxico Burress leaving no matter how you look at it. Neither had a financial stake in the team. Neither spent 8 years working to keep their respective teams in Pittsburgh. It's ridiculous to even suggest that the situations are similar in any way. [/quote]
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Postby HomerPenguin on Thu May 11, 2006 3:44 pm

imau2fan wrote:So when I see folks say, "Well, I'd hate to see the Pens leave, but I support Mario's efforts to get the maximum sale price possible, by whatever means necessary," it has the same odd smell to it.

I just find it interesting. Whenever a big-name, free-agent Steeler or Pirate (or any other Pen for that matter) leaves for more money, they often raked over the coals for being disloyal and caring only about the money. And those players are ultimately replaceable.


I think the fact that you'd put Lemieux on no different footing than Barry Bonds, Plaxico Burress, and the like shows where you're coming from. None of them tied their financial well-being into an investment that was then continually spat upon by the political leadership. Lemieux has tried to make it financially viable for the team to stay here, whether you agree with his efforts or not. He didn't just up and walk away like Bonds, et al.

But for the record, I've never raked any pro athlete over the coals for leaving Pittsburgh when a better deal was to be had elsewhere. It's silly no matter who does it. You griping about Lemieux selling the team to out of town interests for a few extra million isn't any less silly than the folks who whine about Bonds and Burress and Jagr (though he didn't leave as a free agent).

More to the point, as pfim already said, nobody here is rooting for Lemieux to reap gigantic profits from this transaction at the cost of the team leaving the city, and for you to suggest otherwise shows either a lack of understanding or a willingness to distort. Most folks are trying to be realistic and accept that he's not going to sell the team for $.70 on the dollar just to keep the team where it is. Would he? I don't know, and frankly neither do you.
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Postby newarenanow on Thu May 11, 2006 3:59 pm

pfim wrote:
So when I see folks say, "Well, I'd hate to see the Pens leave, but I support Mario's efforts to get the maximum sale price possible, by whatever means necessary," it has the same odd smell to it.


I'm not sure who is "supporting" his efforts to get the maximum price, it's more that a lot of us live in the real world and understand that the Pens won't be undersold to a fictitious local investor, and that 8 years after the Pens were taken out of bankruptcy, there is still no arena. And for the 50 bazillionth time, Mario doesn't even own 50% of the team.

Also, this situation is not comparable to Barry Bonds or Plaxico Burress leaving no matter how you look at it. Neither had a financial stake in the team. Neither spent 8 years working to keep their respective teams in Pittsburgh. It's ridiculous to even suggest that the situations are similar in any way.
[/quote]

I couldnt' of said it better myself. We live in a real world. He tried for 8 years to get an arena. He had stated numerous times before he wasn't in this ownership thing forever. He is not going to accept a plan with gaps in it. No one would even consider buying the team if that was the case because there is too much liability. Wake up and get in the real world U2fan.
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Postby skullman80 on Thu May 11, 2006 5:27 pm

HomerPenguin wrote:
imau2fan wrote:So when I see folks say, "Well, I'd hate to see the Pens leave, but I support Mario's efforts to get the maximum sale price possible, by whatever means necessary," it has the same odd smell to it.

I just find it interesting. Whenever a big-name, free-agent Steeler or Pirate (or any other Pen for that matter) leaves for more money, they often raked over the coals for being disloyal and caring only about the money. And those players are ultimately replaceable.


I think the fact that you'd put Lemieux on no different footing than Barry Bonds, Plaxico Burress, and the like shows where you're coming from. None of them tied their financial well-being into an investment that was then continually spat upon by the political leadership. Lemieux has tried to make it financially viable for the team to stay here, whether you agree with his efforts or not. He didn't just up and walk away like Bonds, et al.

But for the record, I've never raked any pro athlete over the coals for leaving Pittsburgh when a better deal was to be had elsewhere. It's silly no matter who does it. You griping about Lemieux selling the team to out of town interests for a few extra million isn't any less silly than the folks who whine about Bonds and Burress and Jagr (though he didn't leave as a free agent).

More to the point, as pfim already said, nobody here is rooting for Lemieux to reap gigantic profits from this transaction at the cost of the team leaving the city, and for you to suggest otherwise shows either a lack of understanding or a willingness to distort. Most folks are trying to be realistic and accept that he's not going to sell the team for $.70 on the dollar just to keep the team where it is. Would he? I don't know, and frankly neither do you.


Good Post!
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Postby Draftnik on Thu May 11, 2006 9:33 pm

newarenanow wrote:First off, yes I do understand operating and net gains and losses. I'm a CPA. I work on large clients all year.

Second off, the Pens announced over a year ago that all of their debt from the bankruptcy has been paid off. That leaves normal debt that the current ownership and new ownership will have to assume. The only amount that affects the earnings is the interest, which yes, will go down every year as debt is paid, but not significantly enough to make a dent in the Pens losses. The principal only affects cash flow as they are both balance sheet items.

Third, I agree the Pens can negotiate Plan B, but how much? Where is the other money going to come from? The slots applicants will not pay anymore, and the ony other source of payment is from the tax fund from the slots license that Rendell said he will contribute $7M a year. If you start dipping into that more, all hell will break lose. And don't say parking taxes and other entertainment taxes because those are high enough here in Pittsburgh and people won't stand for that.

Finally, the guy that interviewed Fingold was on Savran yesterday and he said that Fingold's goal is to own a hockey team. If the IOC wins, he will still buy the team and keep them in the burgh per the IOC agreement. Second, he will look at Plan 'B' and see if it's feasible, but he is not too keen on it. Third, KC is in negotiations with him and may strike a deal that is rent free at the new arena. They may not control all profits, but they won't be paying anything either, so I don't know where you are getting your $3M a year fee to play at KC.

We can agree to disagree, and I know we both want the Pens to stay in Pittsburgh. I hope the day will come when we can just talk about what players are in the system and argue about that. But until then, this will be a huge roller coaster. I'm just not as optimistic as you.

As for netwolf, we are all using pretty much the same figures. Draftnik has a positive spin. Others have a negative spin or are playing devils advocate. No one knows all of the facts, and I'm sure we won't until the final outcome. There is a lot going behind the scenes that we don't know on both sides.


The article about Pens debt being paid off was regarding the non-secured debt. It was a feel good story regarding printing companies, restaurants, and other entities owed non-substantial amounts of $$. The secured debt holders should have preference on the repayment schedule compared to the non-secured group, but maybe the secured debt was refinanced and the bankruptcy preference was adjusted. I don't know.

If we assume you are right though and the Pens did pay off their secured debt that makes my point even stronger. I've seen estimates of ~ $30M to $60M of secured debt coming out of bankruptcy. If the Pens were able to pay off that significant amount of principal plus interest during a period of mostly declining attendance/revenue and very few playoff seasons that would indicate their operating margins are incredibly healthy. If they have no secured debt remaining from bankruptcy they should have had a very profitable season considering they allegedly had no bankruptcy debt service and will be receiving revenue sharing for the first time ever. The payroll increase this season should not have put them in any worse position since debt service allegedly was down and revenues were up substantially.

I haven't sat for the CPA exam in many years and since I didn't study I failed miserably. I'm sure you know more FASBs, SOX, or whatever the relevant acronyms de jour are per the AICPA. That said, think about Sawyer claiming the Pens losses are $7M this season, your claim that they have no bankruptcy debt, the fact they are receiving revenue sharing this season, the fact attendance was up 30something %, and most of all the improbability of them retiring the bankruptcy debt during a period of low revenues (zero revenues in 04/05 with significant administrative expenses like Igloo lease, front office salaries, etc) then sustaining substantial losses this season when revenues are up and debt service allegedly is down. That scenario makes no sense at all.


This whole thread has devolved into a remedial accounting class with speculation about financial statements neither one of us has reviewed.

The guy from Toronto sounds like a huge poser IMO. His real estate credentials probably are legitimate, but the way he casually dismisses a Plan B he hasn't even seen, Portland, and other markets makes him sound like some kind of rank amateur in negotiating 101. Why in the world would anybody with an ounce of savvy dismiss potential stalking horses that could help him get a better deal and pledge his allegiance to one horse (KC) that will inevitably lead him down a path of negotiating against himself since he publicly ridiculed all other venues.

As i said before we will agree to disagree. I never said KC would potentially charge this guy exactly $3M for rent. That said, I expect the operator of the building (AEG) will easily make more than $3M in annual operating margin at Sprint Center or why in the world would they invest $50M of present value cash in the deal? If you look at it from that angle it is impossible to think avoiding $3M in rent is preferable to controlling all revenue streams.

This is pointless. I think they will stay. I think your contention that the Pens have no bankruptcy debt is implausible. I think Sawyer's contention they lost $7M has no context to mean anything about the Pens operating margins. I also think this guy from Toronto is a buffoon.

By the way, since you are a CPA I'll ask a question. The Pens are set up as a LLC, LLP, or something like that. I don't think they are a standard C corp, they are probably set up to be something like an S corp. Excuse my accounting terminology if it is too old school based on today's definitions. At any rate, I think they are probably set up so the losses flow through to the owners like Lemieux, Burkle, etc. These guys all can use the Pens alleged losses to write down income they have from other ventures. As a CPA you know that is how many savvy business people construct certain ventures and the manipulation done of income statements to show losses often ends up showing losses that have no connection to the actual health of the business. I quit being an accountant because this kind of stuff hurts my head, but the more I think about the Pens alleged losses, bankruptcy debt, etc the less sense it makes.
Draftnik
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