NHL owners voted to approve the $ 900 million purchase of the Pittsburgh Penguins by Fenway Sports Group at their annual board of governors meeting in West Palm Beach, Fla. On Thursday, a source familiar with. the agreement.
The approval was the last major hurdle in the deal, with only a few legal details remaining before the deal closes and the Boston-based sports conglomerate becomes the majority shareholder.
âI think the executive committee that interviewed the representatives of Fenway Sports Group was very excited about the expertise they have in professional sport over a long period of time, the way they run their franchises and the fact that they were excited, Fenway Sports Group, about joining the NHL, “said league commissioner Gary Bettman.” They see a great future for us, and that’s why they are making the investment. “
The sale will mark the completed first step in FSG’s growth strategy to add to a portfolio that includes the Red Sox, Liverpool Football Club, co-owner of RFK Racing (NASCAR), NESN, Fenway Sports Management and Fenway Real Estate.
Last March, RedBird Capital Partners provided FSG with a $ 750 million capital investment that allowed it to explore opportunities.
FSG also wants to own NBA, NFL, MLS, NWSL and WNBA teams, and add another European football team.
FSG bought the Penguins from franchise legend Mario Lemieux, who, along with Ron Burkle, has owned the team since 1999.
Lemieux and Burkle, along with the rest of the management team, will remain in office, with Lemieux and Burkle retaining certain ownership shares.
âWe really like the Pittsburgh Penguins,â FSG President Tom Werner said on a Sports Business Journal panel last week. “I think they have a great management group, I think there is a lot of growth in the NHL, they just signed a new contract with ESPN, they have a very good collective agreement with the players, so we let’s see a lot of opportunities there.
The Bruins, whose owner Jeremy Jacobs is chairman of the NHL board of governors, have been kept apprised of the FSG’s interest in the Penguins. The Bruins own 20% of NESN, FSG owns the rest.
In Forbes’ NHL franchise ratings released this week, the Penguins were in 12th place with $ 900 million, slightly above the league’s 32-club average of $ 865 million.
The NHL is in the first year of a seven-year broadcast deal with ESPN and Turner worth $ 635 million per season. The league will also begin a jersey sponsorship deal next season. Sponsorship dollars hit $ 676 million last season, Forbes reported, up from $ 560 million four years ago.
The league, Forbes reported, is forecasting $ 4.8 billion in revenue this season, $ 5.4 billion next season, with the total rising to $ 6 billion by 2025-2026.
âThe Penguins are an iconic team, they continuously get top marks locally for their [regional sports network]”Said Werner.” When we went there we saw opportunities to increase real estate income, which they have the opportunity to develop. There is a very large plot next to the PPG [Paints] Arena.
âAnd we saw opportunities to increase income by creating more reception spaces. We believe there are other events that can be held in the arena. We love management, but we also believe that with our managerial talents, we can develop it. “
PPG Paints Arena is located in downtown Pittsburgh, next to Duquesne University and across the Allegheny River from Heinz Field and PNC Park, where the Steelers and Pirates play respectively. Construction of the arena was completed in 2010.
The Penguins were founded in 1967 and have played six Stanley Cup finals, winning five.
The Lemieux-Burkle group of owners bought the team in 1999. Lemieux had received back wages from previous owners. After filing for bankruptcy, Lemieux was able to convert the money owed into a controlling interest.