Philly Front Office

What can a professional sports team do when they run out of money and can’t pay their bills or their players? Funny you should ask right now, because the Flyers are facing experts on the situation, the Pittsburgh Penguins.  Funds have gotten pretty low over the years for the Pens, in fact they have been on the financial brink 4 times!  So, what’s their secret weapon to sticking around in Pittsburgh over the last 60 years? Well, they have two go to moves: 1. Pull the #1 pick in the NHL Draft at the most opportune time possible, and 2. Bankruptcy. Let’s have a look.

1975

The Penguins only started playing in 1967 but sucked pretty hard for the most part. In a last-ditch attempt at contention, the Penguins made several trades but still failed miserably at 28-41-9.  Needless to say, that wasn’t enough to bring fans to the arena.  Creditors wanted their money. Unfortunately, the Penguins didn’t have it.  Just 8 years into their existence, hockey in Pittsburgh looked dead. The team declared bankruptcy and were actually briefly kicked out of their arena. Sale and relocation looked like a foregone conclusion with markets in Seattle and Denver salivating.

Shockingly, the NHL worked to keep hockey in Pittsburgh by setting up Eddie DeBartalo of SF 49ers fame to buy the team.  He agreed to keep the team in the Steel City and the NHL execution was stayed.

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1983

Things got somewhat better on the ice after the sale, but fans still weren’t showing up. By 1983 the team tanked. I don’t just mean tanked in terms of their place in the standings, but in NBA-level terms of purposely sabotaging games. Midway through the 1982-83 season the Penguins hatched a plan to do whatever it took to finish with the worst record in the league in order to draft one of the best prospects ever, Mario Lemieux. 

The plan worked. Pittsburgh lost 18 of their last 21 games to finish behind the New Jersey Devils in the standings, drafted Lemieux, and were able to ride his greatness into financial solvency.  Lemeiux would become the second greatest player ever, win back-to-back Stanley Cups, and the center of the NHL world moved to Pittsburgh and away from Wayne Gretzky and Edmonton for essentially the second half of Lemieux’s career until his abrupt retirement in 1997.

The Penguins admitted to the plan with the excuse that had they not tanked and grabbed Lemieux, the team would have had to file for bankruptcy again.

1998

DeBartolo wisely sold the team at it’s height, following their 1st Stanley Cup. To keep Lemieux around and give him the elite talents of Jaromir Jagr and others, the Penguins spent.  By 1998, the new owners were tapped and owed over $90m to players and creditors.  Their first idea was to ask the players to defer their salaries. When that didn’t work, the Penguins declared bankruptcy AGAIN.

This time, it was Super Mario to the rescue again. As the biggest team creditor at $32m, Lemieux proposed to the bankruptcy trustee that he convert that debt to equity and become the controlling owner of the team. Agreed! He then pulled a Roger Dorn and activated himself.

2004

Lemieux’s return helped things for awhile, but when a hip injury sidelined him, attendance fell again. Negotiations for a new arena then failed and the Pens were once again in trouble. Fortunately for them, the whole NHL was in trouble and there was a lockout for the 2004-05 season. This created a unique situation. What do you do for a draft lottery if you didn’t have a season?

The Penguins had the #1 pick in 2003 and selected goalie Marc Andre Fleury. Despite the team continuing to be awful the following season though, Pittsburgh barely played Fleury as a rookie. The team was once again bad and scored the #2 pick in the draft where they selected Evgeni Malkin. With no season the following year, the NHL had itself another draft based on a “lottery” that no one saw. Pittsburgh picked #1 AGAIN and landed Sidney Crosby. This AGAIN led to financial stability and 3 more Stanley Cups.

Now with Crosby at the end of his career, I’m sure there will be more financial problems coming up and then another generational prospect to save them.