Everybody Benefits from Mario's Return - Mario Lemieux, player and part owner of the Pittsburgh Penguins, hockey team - Brief Article

MARIO LEMIEUX'S COMEBACK is helping more than the Pittsburgh Penguins' on-ice performance. In the week after Lemieux announced his return after nearly four years in retirement, the team sold more than 30,000 single-game tickets and 600 season-ticket plans. And that doesn't take into account the thousands of seats he will fill on the road throughout the season. However, Lemieux's decision to become the first team owner in modern professional sports to employ himself as a player isn't as simple as just lacing up a pair of skates.

Lemieux, who owns nearly 17% of the Penguins, is in the potentially uncomfortable position of being both a team owner and NHL Players' Association member, which is a particularly sticky situation considering the expected labor battle that is looming over the league's head. As part of his return to the ice, Lemieux was allowed to remain as an active team owner and CEO, in spite of an NHL bylaw that disallows player ownership of more than 5%. In addition, Lemieux rejoined the NHLPA and will pay the union's annual dues of $5,550, but will not have access to certain sensitive financial information that other union members have.

On the same day that Lemieux announced his return, the league also officially welcomed Wayne Gretzky back as an owner of the Phoenix Coyotes. After unanimous approval from the league's Board of Governors, the team was transferred from Richard Burke to Steve Ellman and Gretzky for nearly $90 million, $60 million of which was in the form of a loan from Japan's Sumitomo Bank. Gretzky will control the Coyotes' hockey operations.

While the team's sale was a lengthy and difficult process, efforts to build a new arena for the Coyotes have been even more complicated--which is why Burke decided to sell the team in the first place. Ellman has said that without a new arena, he and Gretzky will be forced to move. "Can the team survive in Phoenix playing in America West Arena?" Ellman asks rhetorically. "No. This team doesn't stay if it doesn't get a new arena."

If good things come in threes, then the final piece of the puzzle on that early December day was Michael Jordan's appearance in front of the league's Board of Governors at the annual meetings in Florida. Lemieux and Gretzky were forced to share the spotlight with Jordan, who was approved as a part owner of the Washington Capitals. Jordan, who is the NBA's Washington Wizards' president of basketball operations, owns 12% of Lincoln Holdings, which owns 44% of Washington Sports and Entertainment, the company that runs both franchises and their stadium, the MCI Center. Ted Leonsis, Lincoln Holdings' majority owner and chairman of the Capitals, added Jordan as a partner in early 2000 but did not receive official league approval until recently.

Since 1994, the NHL has paid an annual fee to European clubs as compensation for players who leave the Continent for North America. The $6-million payment is split among the clubs that lose players, but with the explosive growth of European migration to the NHL--approximately one-third of current NHL players are originally from Europe--the per-player fees are dramatically decreasing. Last year, according to the International Ice Hockey Federation, some 80 players left European clubs for North American teams. That means the Europeans received an average of $76,000 per player, which does not nearly cover their player development costs.

IIHF president Rene Fasel has warned the NHL that it could face lawsuits if it doesn't voluntarily increase the fee. "It's clear that if we don't reach an agreement, there will probably be some clubs who take NHL franchises to court," Fasel says. "The Russians already have Russian lawyers in the United States they are ready to use.

"The NHL and [commissioner] Gary Bettman need to compensate European clubs for developing these players or else these clubs won't have enough money to keep developing. The NHL can't just clear out Europe like a candy store without paying to restock it."

The NHL's current agreement with the IIHF expires this September. According to Fasel, the Russian Ice Hockey Federation and Czech Republic want as much as $300,000 to $500,000 per player, but don't expect the NHL to match that price. "I don't think the NHL will ever pay that," Fasel says. "But if we do not come to a better agreement for the Europeans, certain federations like the Russians or the Czechs are ready to go to war. They have lost a lot of very good players to the NHL."

After nearly two years of back and forth, the state of New Jersey and YankeeNets, which now owns the New Jersey Devils, are closing in an agreement for a new arena in Newark. The arena, which will also house the NBA's Nets after both teams leave the Meadowlands' Continental Airlines Arena, is expected to cost $325 million, $125 million of which would come from the state. YankeeNets says it has secured approximately $200 million in private financing. The remaining $125 million would be paid upfront by the state, much of which will be repaid by YankeeNets through ticket sales and other revenues.

COPYRIGHT 2001 Century Publishing
COPYRIGHT 2001 Gale Group