Ice gives way beneath Pens deal
By Joe Starkey
Saturday, December 16, 2006
Canadian billionaire Jim Balsillie insisted Friday that his $175 million bid to buy the Penguins remains alive, despite a statement from team owner Mario Lemieux that the deal is off.
"Right now, I'm not giving up on anything," said Balsillie, who was hosting a Christmas party last night at his home in Waterloo, Ontario. "I wish it could move forward."
In a statement released by the team, Lemieux said Balsillie "delivered a notice of termination (to the NHL) today, and it is our understanding that he has stopped negotiating with the National Hockey League to get the necessary consent to buy the Pittsburgh Penguins."
Balsillie didn't confirm or deny that he delivered such a notice. Asked if the deal was dead, he said: "No, nothing's ever dead for good. Sometimes, you get surprised by things. I have to wait for the next step. I really can't say anything more."
The surprising turn of events comes as the Penguins near a critical point in their quest for a new arena.
On Wednesday, the state Gaming Control Board plans to vote to award the $50 million casino license for Pittsburgh. Isle of Capri Casinos, one of three bidders, has agreed to pay $290 million for an arena if it wins the license for an Uptown slots parlor.
Two days ago, Balsillie told the board he was determined to keep the team in Pittsburgh, even if Isle of Capri loses. However, he said the backup plan for an arena, often referred to as "Plan B," is no more than "a concept."
Mayor Luke Ravenstahl said he heard "over and over again" last night that "the NHL wanted to put in a provision to ensure that the Penguins stayed in Pittsburgh, and Mr. Balsillie didn't want to agree to that."
If that is the case, Ravenstahl said, the development could be a blessing.
"If Mr. Balsillie has a lack of commitment to Pittsburgh, this perhaps would be a good thing. I am confident we can still put a deal in place to keep the team here.
"We will continue to move forward with our discussions on how to keep the team in Pittsburgh, either with the Isle of Capri or Plan B."
The NHL board of governors was in the midst of voting on Balsillie's offer for the team when the news broke. League spokesman Frank Brown declined comment on whether the deal is terminated.
NHL Commissioner Gary Bettman released the following statement: "Today's development was unfortunate. If the Isle of Capri is not granted the license on Wednesday, then an already difficult and volatile situation will be aggravated. It is imperative that the Penguins have a new arena on economic terms that make sense for the franchise for the team to remain in Pittsburgh."
At least two of the bidders who were beaten out by Balsillie on Oct. 5 are ready to get back in the game, assuming Balsillie is out and Lemieux doesn't choose to keep the franchise.
In the second part of his statement, Lemieux said his ownership group would "re-evaluate our situation" after the slots license is awarded.
Team president Ken Sawyer said, "I think Mario would like to sell his interest."
Sawyer said he didn't know why Balsillie's deal broke down but that the financial terms were not the problem.
Asked if an Isle of Capri victory might induce additional investors to step forward for the current group, Sawyer said, "No doubt."
Balsillie's competitors included Hartford real-estate developer Sam Fingold; New York businessman Andrew Murstein; and Ohio businessman Jim Renacci, a Ringgold High School graduate.
"You can't get too excited yet, because you don't know all the details and how it's going to play out," Murstein said. "But we've always said we were committed to Pittsburgh. We'd certainly be interested again if the team came back on the market."
In July, it looked as if Fingold would win when he signed a letter of intent to buy the team, but his bid fell through. Asked last night if he remains interested, Fingold said, "Absolutely."
Fingold said he wasn't surprised, given his experience in trying to consummate a deal with the NHL, that Balsillie's bid stalled.
"Not at all," he said. "I was very close. That's why I'm not surprised."
Fingold declined to elaborate. Renacci couldn't be reached for comment.
In August 2005, a bid by San Jose, Calif., venture capitalist William Del Biaggio III fell apart.
Much attention now will turn to Mt. Lebanon native Mark Cuban, owner of the NBA's Dallas Mavericks. On a visit to Pittsburgh for an NBA exhibition game in October, Cuban said he made "a big mistake" by not trying to buy the Penguins.
On his blog (www.blogmaverick.com)
, Cuban wrote, "There are only so many hours in the day, and I didn't have the time or the expertise in hockey to do it right. My mistake."
Cuban was part of Murstein's original team but didn't have a significant financial stake and wouldn't be part of another Murstein bid. Cuban didn't return an e-mail request seeking comment last night.
Isle of Capri spokesman Les McMackin said his group is committed to building a new arena if it wins the slots license, no matter who owns the team.
"Our deal is structured in a way that transcends the ownership of the team," McMackin said. "Whoever buys the team is bound by our agreement with the team. Our deal provides certainty as to the Penguins' staying in Pittsburgh."
Allegheny County Chief Executive Dan Onorato released a statement that said, "While news of Mr. Balsillie's decision to withdraw his offer to purchase the Pittsburgh Penguins comes as a surprise, our goals remain the same -- to build a new multipurpose arena and to keep the Penguins here in Pittsburgh for a long time."
Earlier yesterday, the Sports & Exhibition Authority approved Balsillie's pending purchase. The authority's approval is required to sell the team under the terms of the Penguins' 1999 bankruptcy and sale to Lemieux's group.
Authority lawyer Tom Thompson said Balsillie's estimated worth of $1.5 billion would make the Penguins "one of the stronger franchises in the NHL from a financial standpoint."
Reaction was mixed among the standing-room-only crowd of 17,028 that watched the Penguins defeat the New York Islanders last night at Mellon Arena.
"I thought this was all done and settled," said Zach Vasilakis, of Conway, Beaver County, a partial season-ticket holder for the past decade. "Maybe Mario will keep the team now. Maybe he'll reconsider."
Season-ticket holder Thalia Shelton, of Washington, Washington County, said it was "great" that Balsillie apparently isn't buying the team.
"Even though he was saying he was going to keep the team here, a lot of people said you couldn't trust him," Shelton said.
Her husband, Bill, agreed.
"Mario should keep it," he said. "If things go right next week (with the Gaming Control Board decision), I don't see how he could lose."