Mario Lemieux’s Genius Contract Decision 22 Years Ago Is About To Turn Into An Absolute Fortune

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splits: 34

I’m not a hockey fan, or typically a fan of reside occasions, however I’ve been to a number of Pittsburgh Penguins video games as a result of I’ve household within the space they usually periodically get unbelievable tickets. Watching an expert hockey sport is SO MUCH FUN. Hockey is arms down the perfect in-person skilled sport to observe reside. In a single sport just a few years again I noticed two fights, drank three beers and threw my hat on the ice with a thousand different followers after Sidney Crosby pulled off a hat-trick. It was superb.

As chances are you’ll know, the most-famous Pittsburgh Penguin participant of all time is Mario Lemieux. And positive, Mario’s skilled stats – which embody two consecutive Stanley Cups (1991 and 1992) – are spectacular. However to me, the editor of CelebrityNetWorth, Mario’s most accomplishment is the story of how he turned the bulk workforce proprietor…

(Photograph by Ezra Shaw/Getty Pictures)

(*22*)An Supply They Could not Refuse

The late Nineteen Nineties had been a particularly robust interval for the Pittsburgh Penguins. All through the early Nineteen Nineties the workforce spent approach past its means. By 1998, the workforce’s homeowners Howard Baldwin and Morris Belzberg had wracked up $90 million in debt to a wide range of collectors.

In November of 1998 the workforce was pressured to declare chapter. And who was the workforce’s largest creditor?

Mario Lemieux.

Because it turned out, throughout his enjoying days Mario had been deferring hundreds of thousands of {dollars} from his contracts to be paid in retirement, Bobby Bonilla-style.

On the time of the chapter submitting the Penguins owed Mario…

(*22*) $32.5 million

Mario knew that forcing the workforce to honor that debt was probably a dropping proposition for 2 major causes: First, the workforce would possibly have the ability to skate from the debt completely via the chapter submitting. And secondly, looking for full cost would drive a workforce sale to new homeowners, and that will probably imply transferring to a different metropolis. Mario could not let that occur.

So Mario went to trustees overseeing the workforce’s chapter with a proposal.

Mario supplied to transform $20 million of the debt into workforce fairness PLUS he requested for $5 million in money for working bills.

He additionally needed the chance to place collectively a brand new workforce of buyers to purchase out the whole franchise. He additionally promised to maintain the workforce in Pittsburgh.

The USA chapter courtroom agreed to the phrases and the NHL gave its stamp of approval in September 1999.

Subsequent, Mario went out and bought a bunch of buyers, led billionaire Ron Burkle who chip in $20 million, to purchase the Penguins for…

(*22*)$107 million

A yr earlier than the sale the Penguins had been valued at $132 million. In order that they bought a very good deal proper out of the gate.

In trade for changing his $20 million compensation and placing the deal collectively, Mario Lemieux got here out of the negotiations with a (*22*)25% possession stake in Penguins. Burkle had 19% and the remainder was divvied up between just a few dozen totally different smaller buyers.

He was the very first retired NHL participant to turn into majority proprietor of a workforce.

Over the subsequent twenty years, the workforce’s fortunes shot approach again up. The yr earlier than he took over, the Penguins misplaced $16 million. In his first yr as proprietor the Penguins posted a $47,000 revenue. Lately the workforce has earned over $160 million in income.

Below Mario’s management the workforce received three extra Stanley Cups: 2009, 2016 and 2017.

Mario did not cease there.

The workforce nonetheless owed $60 million to varied different collectors. Mario and the workforce may have used the chapter continuing to barter the money owed right down to pennies on the greenback.

Mario insisted the group pay each penny it owed. Greenback on the greenback.

By 2005 all pre-sale money owed had been cleared.

For his good deeds and superb stewardship Mario is on the verge of…

(*22*)A Big Windfall

Even after COVID delivered a brutal blow to Hockey franchise income within the 2019-2020 season, the Penguin’s minimal e-book worth at present is $600 million.

And that is the minimal e-book worth.

Earlier this week it was confirmed that Mario was in superior sale talks with Fenway Sports activities Group LLC, the corporate that owns the Boston Crimson Sox, Liverpool F.C. and a NASCAR workforce.

The deal just isn’t carried out and the phrases haven’t been introduced, however most retailers are estimating a sale worth of…

(*22*)$900 million

If that occurs, Mario’s 25% stake will flip right into a $225 million windfall.

Not a nasty commerce for $20 million twenty years in the past!

Congrats to Mario Lemieux and the whole Penguins group. I look ahead to attending extra video games sooner or later!

Oh, and earlier than you go, Mario is not the one skilled athlete who thought of changing deferred wage into workforce possession within the late Nineteen Nineties. Again in 1998, NFL quarterback John Elway was given the choice to transform $21 million in deferred wage plus $15 million in money into a 25% stake in the Denver Broncos. On the time the Broncos had been valued at $180 million.

Elway declined.

In the present day the Broncos are price $3.75 billion.

So had John accepted the deal, at present his 25% possession stake can be price $937.5 million 🙁


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