Anyone who is cheering the Penguins' 'miraculous' recovery this
off-season probably also enjoys when Bambi's mother gets killed
and when Old Yeller was taken out back.
The story must be one of the most ironically perverse in sports
lore of the past helf century. And since the facts have been
conveniently swept under Mario's office at the Igloo, let's surface
them for those who need a refresher.
The Flag Bearer for Financial Spending in the 1990's
Howard Baldwin was the owner of the free-flying Penguin teams of
the 1990's and helped set in a new financial era in the NHL.
He was not interested in parity, given that he had a
team of stars with high contracts, including Mario Lemieux,
Jaromir Jagr, Tom Barasso, Paul Coffey, and Kevin Stevens.
But here's the funny thing about Howard Baldwin - he didn't have
the money to pay those contracts and filed for bankruptcy in 1998.
That's the story in a nutshell, but since that's not entertaining
enough for an article, let's dig deeper.
Mario Lemieux and his financial anchor to Pittsburgh
In 1991, Baldwin bestowed upon Mario Lemieux a 6 year, $42 million
contract. Yup, $7 million per season.
It is interesting that Lemieux's salary fifteen (15) years ago
roughly equals the maximum salary permitted in the new NHL.
For context: In 1991, the median income was $30,000; average price of
a home was $147,000; and stamps cost a quarter.
But a funny thing happened to Mario on the way to the bank - Baldwin
needed deferrals on his contract. And when Baldwin went bankrupt,
Mario was owed $30 million dollars.
And that debt was how Mario became a part owner of the Penguins.
Jagr Picks Up the Contract Ball and Runs With It
Although the Pens had a stable of star players that decade, when
Mario retired in the late 90's, Jagr became the team's marquee
player. And with Kariya and Lindros signing big contracts,
Baldwin reacted and signed Jagr to six-year $48 million contract.
Though the contract began at $4.5 million, it escalated to an
annual salary of $9.5 million in 2000, thereby creating the
inevitable $10 million player by the turn of the century.
Of course, Howard Baldwin filed for bankruptcy the next year,
and was not around to enjoy the financial seeds he planted.
Oh, But What About The Venue Deal?
Oh yes, the venue deal. The bane of the team's existence, where
the big, bad state is so unfair to Mario and the Penguins.
In 1997, the other Pittsburgh teams (Pirates and Steelers) moved
to build new venues for their teams.
Howard Baldwin chose not to do that. Hemorraging money, he agreed
to a $13 million deal where he could improve the venue with club
seats and other improvements.
This was a conscious decision to take the short-term money and
continue salary ascension at a dizzying rate, rather than build
the team through sound financial growth.
Pity the Penguins, said Ken Sawyer
You remember the cash-strapped Penguins right?
They had a payroll of roughly $20 million but Team President
Ken Sawyer still claimed that the team was projected to lose
$5 million.
Ah yes, Ken Sawyer. The Chief Financial Offer of the NHL when
John Ziegler was running the NHL. A financial consultant to
the Penguins when Howard Baldwin was owner. And, of course,
President of Lemieux Group Limited Partnership in 2003, when
the team jettisoned anyone earning over minimum wage.
So in the years 'preparing' for the CBA, Pittsburgh lost
enough games to net the 2003 first overall draft choice (Fleury),
the second overall draft choice in 2004 (Malkin), and of course
the first overall this year (Crosby).
And look, with a new CBA deal in place, the Penguins now are
able to sign away defenseman Sergei Gonchar from Boston and
Ziggy Palffy from Los Angeles. And they get to pay Lemieux
whatever salary they want to go against the cap, because he's
the owner.
The arena deal is up in 2007, and the Pens are going hard for
a new venue. And in that spirit, Craig Patrick told fans that he
"anticipates being a contender right away."
And it's a good thing that the new CBA finally will stick it to
teams like the Rangers. Because, after all, they are the
reason Bettman needed to step in and help poor Mario
Lemieux and the Pittsburgh Penguins.
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