Jason Mackey: Why a sale of the Penguins might -- or might not -- work

PITTSBURGH — It's the perfect — and percolating — Pittsburgh storyline, the possibility of Ron Burkle and Mario Lemieux repurchasing the Penguins.

News broke on June 11 that the group of Burkle, Lemieux and David Morehouse was considering trying to buy back the Penguins from the Fenway Sports Group, and I've since confirmed that interest as legitimate.

But that doesn't mean a deal or offer is imminent. From an accurate valuation of the Penguins to the team's on-ice direction and even whether FSG would want to sell at all, there's plenty of nuance to sift through here.

So, let's do it.

Here are reasons why this Penguins fan fever dream could come to fruition and also why it might fall apart:

Why it could work — the money

Crazy as it sounds, there's some precedent here.

John Henry, the principal owner of FSG and one of the sports conglomerate's founders, purchased MLB's Marlins for $150 million in 1999. Just three years later, Henry sold them to Jeffrey Loria for $158.5 million.

The profit wasn't huge — at least relatively speaking — but it did demonstrate Henry's willingness to pivot for business reasons. In this case, that was a $660 million purchase of the Boston Red Sox by Henry and a group of partners at the time.

It makes me wonder whether FSG might reconsider its desire to own a hockey team, especially one that looks markedly different than it did when ownership was transferred in December 2021.

The Penguins are in the middle of a substantive rebuild that they require. We've almost assuredly seen the last playoff game involving Sidney Crosby, Evgeni Malkin and Kris Letang. Things will get worse before they get better, and the on-ice troubles will inevitably hit FSG in the wallet.

It wouldn't be the worst idea to avoid the downturn altogether by making what could be a sizable profit in a little under four years.

Why it won't work — the money

While FSG remains interested in adding a minority partner, it has maintained that it ends there. In other words, the Penguins aren't for sale.*

There's an asterisk there because, well, this is still business, and FSG obviously wants to make money — as it should. Everybody and everything has a price.

But given how this has played out, there's no guarantee the two sides have a number that works for everyone.

Remember, Burkle and Lemieux sold the Penguins for $900 million in 2021, and some current valuations of the franchise paint a far different picture.

In its most recent numbers, Forbes valued the Penguins at $1.75 billion, which ranked 17th in the NHL. Meanwhile, the franchise's EBITA (earnings before interest, taxes, depreciation and amortization) was 12th at $42.3 million.

Are those figures accurate? Do the two sides see the Penguins' operations the same way?

I have no idea.

Burkle, Lemieux and Morehouse would obviously run their own numbers — no, it wouldn't just rely on Forbes — and FSG obviously has its own feelings.

Nobody on the outside has access to those appraisals or discussions, but $800 million and the franchise nearly doubling its purchase price would qualify as a large bridge to cross.

Why it will happen — the human side

Lemieux and Burkle were proud owners. Not in an attention-seeking way, as neither had any interest in talking outside of Stanley Cup victories or a Hall of Fame hockey writer (Dave Molinari) retiring. But they obviously cared a great deal about the Penguins.

And still do.

There's also a competitive itch that Lemieux might be looking to scratch, as well as perhaps missing something that he's done his entire life: caring about an NHL team.

Burkle is a businessman. And given the lengths that group went to grow the game at the youth level — one of the areas where Morehouse's influence was felt most — I'd imagine there's interest in what could happen if the rebuild works.

From an FSG perspective, it's hard to make the argument that the connection with fans has remained the same.

Maybe that has to do with personnel decisions and the lack of playoff success. It could also involve two different ownership styles, as well as a company based in Boston that's had to work to communicate to fans that it really does care about what's happening here.

Bottom line, perhaps if the price is right, FSG might call it good and move on to another investment.

Why it won't happen — the human side

Given the aforementioned struggles to connect with fans, FSG could conceivably worry about selling the Penguins back to their previous owners and forcing the inevitable comparisons.

FSG also doesn't have to care at all. It owns the Penguins, and it has professed a desire — at least publicly — to keep owning the Penguins.

While there would be some fan frustration if the group rebuffed maybe the most popular athletes in our city's history, it sure wouldn't be the first time John Henry and his partners irritated a large group of people.

Also probably won't be the last.

The X-factors

It will be interesting to see how the future of the NHL tilts a potential deal, as there's increasing smoke around the idea of expansion to 34 teams. Not only that, we've heard about potential outfits in Atlanta and Houston that would have to meet a $2 billion buy-in price.

If Lemieux and Burkle want to own an NHL team, there's clearly value here. Meanwhile, if FSG was secretly eying a sale, the market could become complicated if the NHL pulled the trigger on expansion.

I also wonder whether the two sides could negotiate something where the Burkle-Lemieux group starts as a limited partner, more in the vein of what FSG wants, and the value of those shares increases over time.

Not only that, there are on-ice concerns that are hard to ignore here.

If Penguins president of hockey operations Kyle Dubas got an offer he liked and elected to trade Rickard Rakell or Bryan Rust — two players who've attracted plenty of interest this offseason — it sure wouldn't help to accelerate the rebuild.

Losing more would obviously impact the team's bottom line, and there's also the question — however awkward it might feel to ask — of what happens with Sidney Crosby?

Right now, no, Crosby doesn't want to leave. But what if Rakell and Rust are traded? Does that change things?

So, what now?

We wait, honestly.

It would be fantastic theater if this happened, the biggest sports story around here in decades. Lemieux is an icon. How he, Burkle and Morehouse ran the Penguins was top-notch in every facet.

How much the Penguins have grown probably changes the meaning of a purchase price to this group, and perhaps that's enough of a kicker to get a deal done.

I also like what Dubas has been doing. Pretty sure he accumulated another draft pick while I was writing this, and the possibility of drafting McKenna is nothing short of tantalizing.

But there are decisions that must be made on both sides here.

The Penguins' former owners need to figure out what they're wiling to pay, and the current ones will have to decide whether that offer (if it arrives) represents enough of a profit.

Considering Henry has done this before — and would stand to make way more than the 6% he gained by flipping the Marlins — it's certainly something worth monitoring.

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