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Shoalts: Get ready for the Hamilton Penguins

I believe the only way Jim Balsillie will not attempt to move the Penguins from Pittsburgh to Hamilton is if the Isle of Capri group wins the right to a slot-machine licence in Pittsburgh. He has been planning this for far too long to give up on the idea now. For years before the lockout, Balsillie had a Toronto lawyer poking around the NHL, studying distressed franchises like the Atlanta Thrashers, Nashville Predators, Florida Panthers and Phoenix Coyotes. Balsillie, of course, never talked about those plans, but I believe his intent was to wait until one of them went bankrupt. Then he would swoop in, buy the team at a huge discount, move it to Hamilton and dare the NHL to stop him. I think he was prepared to fight them in court, a la Al Davis if necessary. What may have slowed those plans was the lockout. He was probably not prepared to buy a team, even at the $80-million or so they were going for before the lockout, until a collective agreement was reached. Few prospective buyers were willing to gamble the players would cave as completely as they did, there was only one sale during the lockout even though a number of teams were available. So what happens? Gary Bettman and the owners clobber the players, they get a favourable CBA and franchise values rise. The St. Louis Blues sold for $130-million a while back, which was a sizable jump on the $75-million Henry Samueli paid for the Anaheim Ducks during the lockout. Now Balsillie steps up and if the reported $175-million sale price is true, Samueli has to be laughing and scratching today. But don't shed any tears for Balsillie, who could have made the same kind of killing if he had been as willing to gamble a couple of years ago as Samueli, another high-tech entrepreneur. This week's jump in the stock price of Balselli's company, Research In Motion, brought him enough to almost afford two teams at that price. I think the $175-million price is fairly accurate because, according to a source connected with one of the other bidders, the Penguins have not officially notified any of them that Balsillie was the winner. None of the other bidders were willing to pay anywhere close to that, given the uncertainty of the arena situation. So, the Pens turned their backs on them when Balsillie appeared to say the heck with it, I've got the money let's get at it. Here's some theories about what will happen: If the gambling licence does not go to Isle of Capri, there is nothing tying the Penguins to Pittsburgh. Their lease at Mellon Arena expires in June. Balsillie could tell the city and the NHL there is no acceptable alternative for a new arena and he is moving the team to Hamilton where, surprise, surprise, there is an arena, Copps Coliseum, which will require extensive renovations or demolition in favour of a new one to get up to NHL scratch. But that does not matter to Balsillie because he will have a team in the region with the world's biggest population of hockey fans. Almost all of them may be Leaf fans but I suspect he is gambling they will buy tickets because good Leaf tickets are next to impossible to get. Lawyers are already salivating in anticipation of the court fight when the Maple Leafs, Buffalo Sabres and the NHL go nuts. Why will this happen? Because the Isle of Capri, even though it's the official partner of the Penguins, is no slam dunk to get the slots licence. It is not as connected politically as at least one of its two opponents and that is usually all that matters in these things. If either of the other two slots bidders, Forest City/Harrah's or PTIG Gaming, wins, this is Plan B for getting the Penguins an arena, according to the Pittsburgh Post Gazette:

That plan calls for the Penguins to contribute $8.5 million up front plus another $2.9 million annually over 30 years as well as another $1.1 million annually for 30 years in forgone arena naming rights. The winning slots bidder would contribute $7.5 million a year for 30 years, and another $7 million a year for 30 years would come from the state through a slots-backed development fund.

The state has freed $26.5 million for site acquisition and preparation. A lease at the facility will need to be negotiated, as will who pays for cost overruns. So you can see it a new owner of the Penguins could easily say this is unacceptable and we have to explore other options, etc., etc. After all, what sports owner in the U.S. ever puts down more than a token sum to build a playpen for his team? And forego naming rights? Blasphemy!

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