In the early fall of 1991, I received a call from Tony Liberati, who was then working full time for Ed DeBartolo Sr., the owner of the Pittsburgh Penguins. Tony had been with Equibank a decade earlier, when we tried to do the deal where the Whalers would buy the Penguins and jump leagues.
Tony said that Mr. DeBartolo wanted to sell some of his holdings because the real estate market had gone soft, and because he knew I’d done a couple of NHL deals, he wanted me to handle the sale of the Penguins. Tony flew into L.A. and we made a deal for, I think, 2 per cent of the purchase price, plus my expenses.
Paul Martha, who had played football for the Steelers, was running the Penguins, and he didn’t like my presence in the sale. I knew Paul very well because I’d sat across the table from him at many NHL board meetings, and I said, “Look, Paul, Mr. DeBartolo wants my assistance, and I intend to try to help him.”
To me, Pittsburgh looked to be a pretty good opportunity, in that whoever purchased the team would also get the arena management contract. I thought Peter Karmanos from Detroit or Bill Comrie from Edmonton might have an interest in the Penguins, and I had very good meetings with both gentlemen. (This was before Karmanos ended up buying the Whalers from the Gordon Group.) Both of them were genuine in their interest, but both felt the price should be between $30 million and $35 million, based on the performance of the team at the time. But it was clear to me that the franchise was underperforming and that there was a significant upside for any new buyer. I just had to convince Comrie or Karmanos of that fact. Both had a passion for the sport, and either would have made a fine owner. Peter had a junior hockey team in Michigan, and Bill’s son Mike — whom I first met when he was about 12 years old — went on to become an NHL player and is married to actress Hilary Duff.
I had a great meeting with Bill up in Vancouver, which I invited Paul Martha to attend with me, as I needed him to give Bill the kind of information about the team and franchise that a prospective buyer would want. But instead of helping me out, Paul said to Bill, “Why would you want to buy this team?” and mentioned how the Penguins were always struggling at the gate. Instead of trying to help me sell the team, he’s trying to talk the guy out of it! Paul clearly had his own agenda.
When I returned to L.A., the phone rang and it was Ed DeBartolo Jr., whom I’d never met, but whom I was excited to talk to because he was one of the owners of the San Francisco 49ers. Ed asked how the meeting with Comrie had gone and how Martha had handled himself, because I think they were suspicious of him. I told Ed that Paul “didn’t contribute much,” as I didn’t want to get him in trouble with his bosses. Ed was a very perceptive individual and made it clear to me that I shouldn’t worry about having Paul attend any more meetings. We had an unspoken understanding.
Ultimately, we were unable to conclude the deal with Comrie or Karmanos, as they were fixated on the $30 million price and undervalued the opportunity. Mr. DeBartolo, conversely, was rightfully fixated on a higher price, based on the new expansion model which we had created. That is: $50 million.
It was right after the talks with Comrie and Karmanos broke down at the end of the 1990–91 season, and as the Penguins were about to win the franchise’s first Stanley Cup (taking Norm Green’s North Stars in six games), that I received a call from my friend Ed Snider. He urged me to put together my own deal with Morris Belzberg and Tom Ruta and buy the Penguins ourselves.
I didn’t know it then, but ironically that Stanley Cup final was between a team we’d owned briefly and one we were about to own.
Ed said that his arena management company, Spectacor, would do the same kind of deal we were going to do in San Jose — that is, turn around and acquire the arena management contract back from us, thereby enabling us to get the team for a number that was lower to us but still worked for Mr. DeBartolo. Morris agreed, and I called Mr. DeBartolo and asked if he minded if I was the bidder.
“All I’m worried about is getting the price,” he replied.
It was a very creative deal: we spun off the arena end of the business in return for a large part of the purchase of the team.
But the league was unhappy with the way we structured this deal. They felt the value wasn’t what it should be, based on the $50 million expansion fee that Ottawa and Tampa Bay had just paid, which, again, we had helped create. They wanted to see a higher value on paper.
The league objected to the structure because they felt it was lightly capitalized with very little equity money coming in from ownership. And frankly they were not wrong, but after successfully operating a team in Hartford for 17 years and looking closely at the Penguins’ numbers, I felt that we could make up for the capitalization, because the revenue streams could be dramatically enhanced with reasonable price increases.
The deal we originally created was worth between $37 and $38 million, but we had to go back to the drawing board in order to get it to come in at $50 million to maintain the validity of the newly-established expansion fee. So we created a performance-based scenario relative to how the team did. If the Penguins made the playoffs, then we would pay a bonus. If the team made the second round, we’d pay a second bonus. Increased television revenues resulted in a bonus too. Mr. DeBartolo made every one of the bonuses and I was pleased about that because he had stood by us. He was a good man.
We closed the deal in October of 1991, and I was back in the National Hockey League with a team that was the reigning Stanley Cup champion and had two of the greatest players in the game — Mario Lemieux and Jaromir Jagr — plus my star player from Hartford, Ron Francis.
Bumpy Road Back to the Stanley Cup
We took over a tremendous hockey team which had just won the Stanley Cup, and which had so much talent that winning a few more was certainly not out of the question.
There were stars — and one mega-star — on the ice; Craig Patrick was doing a brilliant job as GM; and the coach, Bob Johnson, had created just the right atmosphere for a team on its way to the Cup. Bob, known as “Badger Bob” for his run of successes at the University of Wisconsin, was famous for the observation, “It’s a great day for hockey!” which has become part of hockey’s everyday language. You won’t find anyone in hockey who didn’t love Badger.
But in August of 1991, as we were still working on the formal deal to purchase the team, Bob suffered a brain aneurysm while he was preparing to coach Team USA in the Canada Cup. While he was in hospital, he was diagnosed with brain cancer and he was immediately flown to Colorado for treatment.
We opened the season with our assistant coaches Pierre McGuire, Rick Paterson, Barry Smith and Rick Kehoe as sort of a coaching committee, and Craig asked Scotty Bowman, our director of player personnel, to be the interim coach until, hopefully, Bob recovered. Craig’s famous father, Lynn, had hired Scotty to coach St. Louis when they went to the Cup finals the first three years of expansion, and Scotty had coached Craig with the Montreal juniors in the mid-1960s. Of course, Scotty also had those five Stanley Cup wins in the ’70s coaching the Canadiens, and in November of that year he was being inducted into the Hockey Hall of Fame. So with Scotty at the helm, and solid assistants, we were in good hands.
We got off to a quick start, going 22–13–4 before New Year’s. What made that record even more commendable was that the players, who all loved Bob Johnson, were really worried for him. Bob was communicating with the team and coaches through faxes, and was sent videotapes of all the games, but sadly, on November 26th, Bob lost his battle to cancer. The whole hockey world, and especially our team, was devastated.
The players dedicated the season to Bob and wore commemorative patches on their left shoulders, bearing his nickname, “Badger,” and the numbers 1931 and 1991, the years of his birth and death. Bob’s catchphrase, “It’s a Great Day for Hockey” was painted on the ice at both bluelines and remained there the whole season.
After our hot first half, we cooled off dramatically for a few weeks, managing
to get only 14 of our next possible 48 points. On February 19th, when Craig Patrick traded Paul Coffey, who was going to be a free agent anyway, to Los Angeles for Brian Benning and Jeff Chychrun, a lot of fans thought we had given up. But that same day Craig sent Benning and Mark Recchi to the Flyers and we got some much-needed toughness back in Kjell Samuelsson and Rick Tocchet, plus a good goalie in Ken Wregget.
We were only three games over .500 at the time, and fell to an even .500 by the end of the month, with the playoffs in doubt. But we went on a 12–5–1 tear to end the schedule and head toward the post-season with a head of steam. Mario was incredible, leading the league in scoring with 131 points despite missing 16 games, and Kevin Stevens finished second with 123 points. Joey Mullen had 42 goals, and Jaromir Jagr, who turned only 20 in February, had 32 goals and 69 points, essentially a point a game (he played 70 games total). We led the league in scoring, with almost 4.3 goals per game, and were a lot of fun to watch.
Midway through that first season in Pittsburgh, there was a significant turning point in hockey history when the NHL Players’ Association appointed Bob Goodenow as its executive director on New Year’s Day. I happened to know Bob from some time earlier. During my first year with the Whalers, my father called to say that a friend of his from Harvard knew a young man who was writing his thesis on hockey and wondered if I would talk to him about the game. That graduate student was Bob Goodenow, and we spent a whole afternoon talking about hockey in general. I liked him and we stayed in touch, and we still do.
It was a different game with Goodenow in control rather than Alan Eagleson. The collective bargaining agreement had expired at the start of the season, and on April 1st, 1992, with only a few days left in the season, the players association called a strike. It was the first general players’ strike in NHL history, although the Hamilton Tigers did strike over playoff wages in 1925. (The team dissolved rather than pay, and Hamilton has been trying to get back into the league ever since.)
I kept hoping and praying that the strike would not happen. We had just taken the team over six months earlier, and I didn’t want our year to end that way. There was tremendous pressure on us, as new owners and defending Cup champions. I said to the other members of the NHL Board of Governors, “Guys, if you don’t have a Stanley Cup playoff, how are you going to sell tickets all summer? What are you going to tell your season ticket holders? We’ve got to play!”
And that’s where I was out of step. Every strike, every lockout, I was out of step. As a member of the board, I was always looked upon as somebody who was friendlier to the players than other board members were. Remember, we came into the league not through the front door but through the back door, and we had to hammer it down too. With a battering ram. And I’ve always felt that too many board members didn’t have the experience that comes from running their teams on a day-to-day basis like I did.
As the strike went into its second week, everyone was swirling around in unhappiness over it, worried that the playoffs would be cancelled. Bruce McNall was one of the leaders of the settlement group. I was on some of the calls, as were Peter Pocklington, and Bill Wirtz and Stan Jaffe of the Rangers. We were more vocal in that our teams had a shot at the Cup, but others wanted it settled as well.
We were all talking about how best to resolve this when John went ahead and made a deal with Bob Goodenow. John just made up his mind that we couldn’t afford not to have the Stanley Cup, and he went into a room with Bob, put together a deal and then told the board about it. Everyone voted for it. The players would get better playoff bonuses and changes to free agency, and each team’s season would go to 84 games with two games in neutral sites as market tests for future expansion.
Some of the owners were very upset with John because they felt he hadn’t built the consensus to make the deal he made. I was adamant, though, that he did the right thing. If the Stanley Cup playoffs were not held, it would have been devastating for the sport. Sadly, the decision cost John his job.
Thanks to the fact that there was a Stanley Cup playoff, we had a chance to repeat as champions, which is exactly what we did. We were in a tough division, finishing third behind the Rangers and Washington but fourth overall in the east. The Capitals finished 11 points ahead of us and beat us in the first two games of the opening round of the playoffs, and then took a 3–1 lead after game four, but they never could beat us in the playoffs and we swept the next three games, with Tom Barrasso outstanding in a 3-1 win in game seven, right in Washington.
Then the Rangers won two of the first three games against us in the division final, but we took the next three to advance to play Boston for a berth in the Stanley Cup. We swept the Bruins, and then won the Cup final in four straight games against the Blackhawks, clinching the championship on their ice to become the first team since the 1988 Oilers to win back-to-back Stanley Cups. Our 11 straight wins to end the playoffs was also a league record. Mario, who had 34 points in just 15 games, won the Conn Smythe Trophy as playoff MVP for the second straight year. Just as in Hartford, in my first year in Pittsburgh we won the league championship.
Winning the Stanley Cup was an exhilarating experience. However, in my mind it almost came too easily, in that we had not had a long history with the Penguins franchise and we couldn’t help but feel a little bit like passengers. Having said that, I was incredibly proud for my partners, for the players, and for the City of Pittsburgh.
I also knew that winning the Cup would make the job in front of us really difficult, moving forward. We had many expiring contracts and we were negotiating from weakness — it is tough to look a player in the eye when his team has just won two Cups in a row and tell him that we can’t afford to pay him. Also, with Bob Goodenow in charge of the players, we were entering a whole new era.
Still, we were thinking we could defer some of the bigger contracts until our revenues caught up. We couldn’t do it all at once, but we had a truly great product.
I felt we were right on track in our progress the first season.
Embracing Change
In June, after the Stanley Cup final, the NHL had its annual board meeting in Montreal. At that meeting we decided to make the change from John Ziegler to a new NHL president.
There was the usual run of phone calls and meetings leading up to it, all pretty well agreeing that it was time for change because it was clear that we were entering a new era. Bob Goodenow was at the helm of the players’ union and, from the tough way he conducted himself during the strike, there was no question that there would be trouble ahead.
John was asked to stay out of the meeting, so he knew what was going on and I think he was ready for it, but I still felt John was treated very badly. He was never properly honored by the league and the board for his 16 years as president. And I’m partly to blame because I was a member of the board of governors. I’ve always looked back on that firing in regret and shame because it was not well done.
Being NHL president (or commissioner, as it is now) is a demanding job, and during his reign John Ziegler was a very good president. He was a huge believer in collaboration and had all the board members vested in the league by sitting on committee after committee. The question around John was whether he was going to be able to do it from the marketing point of view. And that was definitely a concern at the time.
The agreement at that board meeting was that Bruce McNall of the Los Angeles Kings would be the board chairman, with Gil Stein the acting president, and that they would run the league while we put together a committee to search for a new, permanent president.
That was what I called the NHL’s defining Alexander Haig moment. Gil, whom I’d known since he was Ed Snider’s lawyer with the Flyers, had always been in the background as league vice-president and legal counsel. And some people don’t know enough to stay in the background. When we all left the meeting, everybody supported the plan of temporary leadership while we conducted our search, but within days Gil w
ent out and campaigned to make the job his permanently. Gil clearly was bitten by the bug of wanting the NHL presidency. He was an outstanding legal counsel for the league, but unfortunately nobody envisioned him becoming the permanent president.
I wasn’t on the search committee for the new president, but I did put forward the name of a good friend of mine, Senator Lowell Weicker of Connecticut, for consideration. They interviewed Lowell and they also interviewed two executives from the NBA, Deputy Commissioner Russ Granik and legal counsel and Vice President Gary Bettman.
Gary came in and just blew everyone away. He was extremely confident, and coming out of that NBA school of marketing he had a leg up, because they were very hot at that time. He said, “Look, this is what we did, this is how we did it, and this is what we can do here.” He was very impressive, and he got the job. After 75 years of presidents, the NHL had its first commissioner. The reason for the title change was that the other three leagues were run by commissioners, so it was time for the NHL to make it clear to the sporting world that it too had a very strong leader. “Commissioner” has a stronger connotation. It was a change to be consistent with the other major leagues.
Meanwhile, I had a lot of work to do with the Penguins. We had our second Cup but we also had a lot of star players, including Mario Lemieux, whose contracts were up, and we felt that part of our ownership mandate was to keep this great team together.
Karen and I first met Mario when we and our partners, Morris Belzberg and Tom Ruta hosted a reception for players and staff after the first game of our first season. Mario arrived late with his beautiful French-Canadian girlfriend, Nathalie, whom he later married, and clearly possessed the aura of a star who transcended the sport of hockey. He and I formed an immediate bond that night and agreed we’d get together as soon as possible to discuss his future with the Penguins.
Slim and None Page 17