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The Lemieux Ownership Era: How The CONSOL Energy Center Came To Be

In part three of a four-part series (part one can be found here and part two here), the Penguins head into the salary cap era with high hopes, and only a new arena can match their ambitions. With the local government wary and the city in financial peril, how did the Penguins manage to get the CONSOL Energy Center built?

Season-ticket sales heading into the 2005-06 NHL season were a significant improvement over pre-lockout numbers, as the Penguins fanbase saw a team it believed was capable of returning to the playoffs.

Name recognition, in this instance, meant brand recognition, and with the likes of Sidney Crosby, Mark Recchi, Sergei Gonchar, Ziggy Palffy and John LeClair joining Mario Lemieux, Ryan Malone and company, fans and media alike believed the Penguins had become a competitive team again. Once the team dropped their first nine games in a row, however, talk of contention vanished.

The beauty of season tickets for a franchise is that they provide a team with immediate resources and give a certain amount of cost-certainty heading into a season. Once fans buy tickets for 41 games, they can't return those tickets. Preseason hype turned out to be an incredible boon to the Penguins and all of the season tickets sold meant the Penguins weren't as reliant on promotions, such as giveaways and Student Rush, to get fans in seats.

Despite the serious uptick in ticket sales (approximately 160,000 more compared to the previous season), however, the Penguins were still hamstrung by an unfavorable lease agreement on a dilapidated, crumbling building.

This is where Mario Lemieux transformed from knighted savior of the franchise to shrewd, uncompromising businessman. To get to the present, we have to rewind a bit to the past, back to when Lemieux was negotiating over ownership of the team. Lemieux, having been with the organization since the early 1980s, knew what prevented the Penguins from being a profitable, successful business.

Atop the list was the Mellon Arena, which was such a problem because of the Penguins' lease through SMG, property manager of the arena.

In very basic terms (and I hope I'm not doing an injustice to this subject), Allegheny County (via the Sports & Exhibition Authority) owns the Civic/Mellon Arena, but SMG runs the property. For that reason, the Penguins had limited financial gain from other, non-hockey happenings at the arena. Concessions and other events were run by SMG, and SMG, as managers, were due a significant portion of what was generated, the city and county receiving much of the rest . The Penguins' profit was minimal, even during their games.

When Lemieux took control of the Penguins, one of the first things he did was renegotiate the team's lease with SMG, which was incredibly unfavorable due to the silliness and desperation rampant in the Howard Baldwin era. The new agreement, though, still didn't do the trick.

With tough negotiations between the Penguins and government officials ongoing for some time, and the prospect of potential operating losses on the horizon, the Lemieux Group decided to put the Penguins up for sale.

Several potential ownership groups lodged bids to purchase the Penguins from the Lemieux Group, most notably Jim Balsillie, owner of Research in Motion, the company responsible for the Blackberry.

Balsillie wanted to bring hockey to Hamilton, Ontario. The easiest way to do this was to purchase one of the least expensive franchises in the NHL, claim to have reached a brick wall in arena negotiations and move the team up north in the name of the viability of the franchise. Sound paranoid? Not quite.

With a deal reportedly close to being completed, several clauses added by the NHL to the final agreement, specifically the league's insistence that the team stay in Pittsburgh regardless of arena negotiations, convinced Balsillie to pull his $175 million bid and prevented the sale going through. In the disappointed words of Penguins CEO Ken Sawyer:

"There's a lot of work that's gone into it," Mr. Sawyer said. "It was almost there, and now it's not there."

Now, the Lemieux Group's outs were becoming fewer and fewer.

Lemieux made another U-turn, deciding he didn't want to give up the franchise. Instead, he wanted to make it viable. If it couldn't work in Pittsburgh, it would work elsewhere. Citing guarantees from local lawmakers when he first purchased the franchise, Lemieux cried foul, saying the team would soon be a free agent and would shop around for the best offer if Pittsburgh couldn't meet the ownership group's needs.

Important to this is not underestimating Lemieux's relation to Pittsburgh. On his considerable resume:

1). Stanley Cup #1

2). Stanley Cup #2

3).Hart Memorial Trophy (x3)

4). Art Ross Trophy (x6)

5). Conn Smythe Trophy (x2)

6). Everything else. All Star appearances, a Gold Medal, and, most importantly, the Dapper Dan award.

Those facts do not weigh unheavily on a fan's mind, and the difference between Lemieux threaten to move the team if a new arena isn't provided is significantly different than one by, say, former Pirates figurehead Kevin McClatchy, who many fans simply regarded as a suit.

Though the public generally loathes providing tax dollars to arena construction, especially considering the legal shenanigans that took place in constructing PNC Park, Heinz Field and the new convention center, Lemieux largely came off as a sympathetic figure in this process, speaking of how the Penguins were held out of the new arena giveaway all while negotiating with cities other than Pittsburgh to potentially move the team, most notably courted by Kansas City.

When analyzing the outs of the Lemieux Group during this pivotal time, the question returns to the essential nature of sports and asks, "Who is the team?" or, rather, "Who are the Pittsburgh Penguins?"

Are the Pittsburgh Penguins owned by the ownership group, in this instance, the Lemieux Group, or by the fans and the region? If the Penguins were to leave Pittsburgh, would that franchise still be the Penguins? Or do the Penguins die if they aren't in Pittsburgh? Do they die if they don't have a shiny new arena to call home? Apparently, yes.

The painful reality of it all is that, if an arena deal had not been struck, Lemieux would have unloaded the team in one way or another. Revisionist history, in this instance, is merely a method of public relations. When you were admittedly within a matter of days of selling the franchise to a disingenuous buyer, who fooled nobody, it's hard to claim that the final goal was keeping in hockey in Pittsburgh. It was primarily about keeping the business afloat, preferably in Pittsburgh, but not necessarily.

But, there's always an out ... by 2005, the Penguins had already paid off all of their creditors from the bankruptcy era, had amassed a wealth of young talent through the draft and had a salary cap to work with. Even with things as dire as they were in the pre-cap era, the 2000 and 2001 seasons for the Penguins were, actually, profitable. Life without the CONSOL Energy Center was possible, just not as profitable.

At some point, reality dictates that the oldest arena in the league would've needed to have been replaced. But with the city hemorrhaging money and population for years, there were higher priorities for the government, and if the Penguins wanted to force their agenda, politely asking or petulantly complaining wouldn't do the trick.

So, heavy-handed tactics were necessary. And, through the most legal of extortion methods, an agreement for a new arena was found a matter of months after the team was on the verge of being sold. The Lemieux Group got the control and financial windfall they so desperately desired and the Penguins' future was finally assured ... for at least 30 years.

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