clock menu more-arrow no yes

Filed under:

How Mario Lemieux's Ownership Revitalized The Penguins

In the second installment of a four-part series, we examine the factors that led to the Penguins' success under Mario Lemieux's ownership. Part One is here.

PITTSBURGH, PA - APRIL 08:  Mario Lemieux # 66 waves to the crowd during the pre game ceremony that celebrated the final regular season game ever at Mellon Arena on April 8, 2010 in Pittsburgh, Pennsylvania.  (Photo by Justin K. Aller/Getty Images)
PITTSBURGH, PA - APRIL 08: Mario Lemieux # 66 waves to the crowd during the pre game ceremony that celebrated the final regular season game ever at Mellon Arena on April 8, 2010 in Pittsburgh, Pennsylvania. (Photo by Justin K. Aller/Getty Images)
Getty Images

Mario Lemieux must have had a plan once taking over the Pittsburgh Penguins that would've sufficiently convinced incoming shareholders, specifically Ron Burkle, to make a significant investment in the team. There had to be some obvious potential for future profit through the nearly-bankrupt franchise.

Judging by what we've seen over the last few years, the plan could have been something like this:

1). Excite the fanbase

2). Cut costs

3). Create a level playing field

4). Invest in the future

5). Win

While most major sports franchises in North America make significant chunks of their money from rights contracts (specifically television, but also radio, merchandise, and so on) and revenue sharing, NHL franchises are incredibly reliant on gate receipts to stay profitable or, in this case, afloat. Though the Civic Arena (renamed Mellon Arena in 1999) had one of the smallest capacities in the league, keeping seats filled was a must, even though Lemieux knew payroll would have to be significantly slashed to keep up with costs.

So, what do you do keep people around in spite of the impending exodus? How about bring the greatest Penguin ever out of retirement? Not too difficult when it's you returning to the rink for your own team. And now, that nice, new multi-million dollar contract? Yeah, good luck to anyone in the company you own convincing you to defer your own salary.

Now, take a look at the average attendances for the Penguins over the last 20 years and match them up with the level of success that the team had each year:

Year    Attend.     Record

92-93: 16,105    56-21-7 (1st in Patrick Division. Lost in Conference Semifinals)

93-94: 16,714    44-27-13 (1st in Northeast Division. Lost in Conference Quarterfinals)

94-95: 16,108    29-16-3 (2nd in Northeast Division. Lost in Conference Quarterfinals. Lockout-shortened season)

95-96: 16,239    49-29-4 (1st in Northeast Division. Lost in Conference Finals)

96-97: 16,691    38-36-8 (2nd in Northeast Division. Lost in Conference Quarterfinals)

97-98: 15,069    40-24-18 (1st in Northeast Division. Lost in Conference Quarterfinals)

98-99: 14,825    38-30-14 (3rd in Atlantic Division. Lost in Conference Semifinals)

---Lemieux Takes Over Team---

99-00: 15,444    37-31-8-6 (3rd in Atlantic Division. Lost in Conference Semifinals)

---Lemieux Returns to NHL in December 2000---

00-01: 16,336    42-28-9-3 (3rd in Atlantic Division. Lost in Conference Semifinals)

01-02: 14,895    28-41-8-5 (5th in Atlantic Division. Missed playoffs)

02-03: 14,749    27-44-6-5 (5th in Atlantic Division. Missed playoffs)

03-04: 11,877    23-47-8-4 (5th in Atlantic Division. Missed playoffs)

---NHL Lockout---

05-06: 15,804    22-46-14 (5th in Atlantic Division. Missed playoffs)

06-07: 16,424    47-24-11 (2nd in Atlantic Division. Lost in Conference Quarterfinals)

07-08: 17,076    47-27-8 (1st in Atlantic Division. Lost in Stanley Cup Finals)

08-09: 16,975    45-28-9 (2nd in Atlantic Division. Won Stanley Cup)

09-10: 17,078    47-28-7 (2nd in Atlantic Division. Lost in Conference Semifinals)

So, what conclusions do we draw from this?

1) Most obviously, fans show up when the team wins. Attendances declined steadily over the first three years the team missed the playoffs. There was a bump following the lockout after the acquisition of Sidney Crosby and Craig Patrick's multiple high-profile, post-lockout signings (including Sergei Gonchar, Ziggy Palffy and John LeClair - more on these later) , but fans eventually shied away once they saw how poor the on-ice product was.

2) Lemieux's effect on the team was tremendous.The exception to the 'fans showing up when teams win' rule occurs just before Lemieux bought the team, as attendance was beginning to decline significantly. The Pens, incredibly successful over the early part of the decade, had become solid but spectacularly unspectacular, squeaking into the playoffs but going nowhere once they'd arrived there. In the end, even with decent success, the fans needed a reason to believe something more was possible. 

Not only did the team's attendance increase immediately after Lemieux became its owner, but the attendance also spiked upon his return to the ice. This wouldn't have necessarily meant much if the team had improved significantly in the process, but their regular-season performances didn't change much over that period. True, the emergence of Alexei Kovalev alongside Jaromir Jagr helped as well, but Lemieux was, far and away, the biggest draw.

3) And finally, and just as obviously, with investment comes success.  Early in the 1990s, the team was still dominant as Howard Baldwin's ownership group spent beyond its means. As the Lemieux group tightened the strings, the team's record suffered. With the introduction of the salary cap, the Penguins increased spending and their record improved. We'll come back to this later.

In the meatime, though, despite the need to win to keep generating revenue, the Penguins desperately needed to cut salary. With this, several players who emerged as stars with the Penguins (Jagr, Kovalev, Robert Lang, Martin Straka) either traded for minimal return or allowed to wander off into the free agency market. As players left, the franchise's fortunes took another turn for the worse.

But, really, what other choice was there? As Lemieux himself said in January of 2003:

"We had to make a move with (Jaromir) Jagr," Lemieux said. "So, this is something we have to look at, and we’ll do what’s right for the organization. We know it’s going to be a challenge to keep him with what the top guys are making now. It’s getting tougher for markets like ours to keep our stars."

So, how can a business thrive in a market where the main way to make money is to attract stars that you can't afford and win games that can't be won without attracting those stars? How about adjusting the market to suit the needs of your business? Far-fetched? Actually, no.

The Penguins weren't the only ones feeling the economic crunch suffocating much of the NHL in 2003, with both small- and large-market teams suffering heavy financial losses. Lemieux was in a unique position of power as the NHL entered a very tumultuous period, a galvanizing figure as the rarest of the rare, a star athlete who became an owner.

Here was a man who both owners and players could relate to as one of their own, during a time in which the two groups felt they had very little in common. And so Lemieux became one of the most vocal advocates of a salary cap to curb spending and give the Penguins an opportunity to be a viable franchise once more.

Time passed. Weeks dragged into months as the league's labor impasse turned into a lockout that turned into a lost season.

Yes, it was all very moving, very sad, and difficult for the fans. But was the result worth the sacrifice?

In a word, yes. The NHL finally had a real, hard salary cap ... a glorious, glorious beacon of cost certainty shining in a sea of excess and mounting losses. The Penguins could finally live in the same spending bracket as the Red Wings, Rangers and other heavy hitters of the NHL. And guess what else? Revenue sharing. The Penguins would actually be paid money by the teams who generated the most revenue.

Need anything else? How about cap room? The Pens got a ton of cap room. Enough, in fact, to sign one of the most dynamic scoring defensemen of the last decade, Sergei Gonchar. Enough to sign high-scoring winger Ziggy Palffy. Enough to sign proven NHL netminder Jocelyn Thibault, so as to help ease Marc-Andre Fleury's transition to the NHL. Enough for Mark Recchi to return to the team, and bring a sense of past glory and nostalgia with him, alongside John LeClair, a perennial thorn in the Penguins' side who was expected to add grit and experience to the lineup.

Oh yeah, one other thing, they also managed to draft some Crosby kid in the off season. Evgeni Malkin was in the process of working his way across the Atlantic. And Mario Lemieux? He was still hanging around. After years of losses, financial and sporting, the Penguins and their fanbase finally had a reason to feel optimistic.

Photographs by dizfunk used in background montage under Creative Commons. Thank you.