Pittsburgh's Endangered Species
Three Musts For Penguins' Survival
By Bob Grove

When late January brought news that the Penguins were in the process of trading Alexei Kovalev, their $4.6 million-a-year right wing, the financial realities hit Pittsburgh hockey fans with all the subtlety of a Bryan Marchment seek-and-destroy mission in the neutral zone.

In retrospect, the departure of Kovalev became inevitable almost four months earlier at the start of the season. Penguins' GM Craig Patrick had offered the 29-year-old a multi-year contract worth approximately $6 million per season, but wasn't interested in negotiating past the opener. The puck dropped, and with a lucrative arbitration decision looming ahead, the chances of Kovalev hanging around until April plummeted to zero.

When Patrick announced on Feb. 10 that he had traded the second-best player on his team back to the bumbling but wealthy New York Rangers, the anguish of Kovalev's non-future here turned to anger for most Pittsburgh hockey fans. They ridiculed the return for Kovalev, Dan LaCouture, Janne Laukkanen and Mike Wilson—Mikael Samuelsson, Joel Bouchard, Rico Fata and Richard Lintner. They bemoaned the inclusion of $4 million from the Rangers as the substance of a transaction only an accountant could love.

They vented on talk shows for days, mostly about Patrick's attempt to spin the trade as beneficial to the Penguins' playoff drive—even while Patrick's boss, Mario Lemieux, called the trade for what it was: a necessity for the team's survival. I have never seen a National Hockey League GM trash the players he just acquired, especially when he needs them to play over their heads immediately. Such announcements, therefore, are degrees of rhetoric, although Patrick certainly pushed the envelope on that day.

The financial impacts of the trade were so significant for the Penguins—sources confirmed the Rangers also agreed to continue paying the players they sent here through the end of the season—that they had a chilling effect on fans. Can the team's bottom line be that bad?

The morning after, Pittsburgh hockey fans were left to contemplate a sobering landscape. Attendance at Mellon Arena is off by about 1,000 fans per game. Francis, Jagr, Kasparaitis, Lang, Kovalev. . . all gone. The Penguins appear certain to miss the Stanley Cup playoffs again.

NHL hockey in this city is engaged in yet another life-and-death struggle. This time it will be played out both close to the heart and on a grand scale involving a league soaked in red ink and a union representing more than 1,000 players. If the Penguins are to survive here in the long term, here's what must happen:

1. Fiscally Responsible CBA

A new collective bargaining agreement must be reached limiting the size of payrolls, which in the last decade have grown exponentially under the auspices of owners with oversized egos, a lack of business sense or simple careless streaks.

The current CBA expires in September, 2004, and nearly everyone in the hockey world expects most, if not all, of the 2004-05 season to disappear. The league and union leadership are so entrenched they can't even agree to start talking. NHL Players Association head Bob Goodenow wants the league to start the process by making a proposal—I always thought bargaining led to proposals, not the other way around.

The owners have themselves to blame for the outrageous growth in NHL salaries, but today far too many players can't bring themselves to believe the losses teams are claiming. Forget the criminal actions of Buffalo ownership. Forget the historical financial instability of the Ottawa Senators. The Dallas Stars are for sale, and the Los Angeles Kings will be unless a sensible CBA is reached. The St. Louis Blues will lose tens of millions this season, and the Chicago Blackhawks won't be far behind. The Calgary Flames and Edmonton Oilers have been hanging by a thread for several seasons and will continue to do so as they contend with the economics of the Canadian dollar.

The players have benefitted greatly from the foibles of ownership. They have more jobs today than ever before, and salaries are at an all-time high. Now it's time to give some of it back—and perhaps protect a lot of jobs in the process.

There's no guarantee all 30 teams will even make it to the 2004-05 season, and certainly none that all 30 will be up and running if an entire season is missed. In that case, there will be no revenues coming in while teams continue to be faced with expenses like employee salaries (each team will keep some employees on), leases and/or other financing payments.

It seems certain that the Penguins are girding themselves to survive a season without hockey. The lockout which wiped out almost half of the 1994-95 season cost owner Howard Baldwin untold millions and helped set the stage for his sale of the team. Any strategy that gets current Penguins ownership through to the other side of this impending labor strife is a good one.

In the meantime, owners must negotiate a CBA with meaningful controls on salaries. They can't go halfway toward fixing their laughable economic plight. If they can accomplish this, the Penguins will have a broad financial framework in place that allows them a chance to make money.

2. New Arena

A new arena must be constructed that creates more lucrative revenue streams for the Penguins and allows them to compete more effectively for local entertainment dollars.

By now everyone is familiar with two facts: the Penguins are far behind the NHL curve on getting a new home, as 42-year-old Mellon Arena is the NHL's oldest venue; and they're stuck with rotten timing. The city, county and state all have significant budget challenges while the national economy stagnates, and yet Lemieux & Co. must find a way to build political support for substantial public funding for a new arena.

Pittsburgh mayor Tom Murphy continues to say the city has no money to contribute, although the city didn't contribute anything to the construction of PNC Park or Heinz Field, either. But he can help build support for the new arena envisioned by the Penguins, which can do three things for his city: make the downtown more vibrant by attracting more events; create vast development potential by vacating a large portion of prime real estate on the Mellon Arena site; and serve as a cornerstone of the redevelopment of the Fifth/Forbes corridor, long one of his major goals.

County executive Jim Roddey, similarly, can play a significant role in building political support—especially if Regional Asset District money is to play a role in financing a new building. New Governor Ed Rendell supports passage of legislation legalizing slots in the state, a move he estimates could bring in $100 million per year. Perhaps some small slice of that revenue can represent discretionary dollars that could be used to pay off the bond that helps fund a new building.

Neither the Steelers (who contributed 44 percent) nor the Pirates (18 percent) paid for the majority of the construction costs of their new buildings, despite the fact they are the only tenants in their respective homes. A new arena can be used for a wider variety of events that attract a broader slice of area residents, and clearly the Penguins have taken the lead on an issue that stands to benefit the entire region.

3. Fan/Corporate Support

Hockey fans must support their team.

The decline in Mellon Arena attendance this season is a reflection of a struggling economy, both locally and nationally. It is also a reflection of the team's poor play at home and of the malaise that sets in among fans who have become accustomed to the Penguins reaching the playoffs.

This much, however, is certain: even if a new and effective CBA is reached, and even if a new home is constructed for the Penguins, none of it will mean anything without the support of the region's hockey fans and corporations. Hockey is a gate-driven sport, and that isn't about to change anytime soon.

If the prospect of paying to see Lemieux play for a .500 hockey team doesn't excite you, then consider the alternative—not having an NHL team. It's an easy choice for fans who love the game. Those upset by the Kovalev trade have to be given a chance to get their arms around the big picture here, which is that management is walking a fine line between staying competitive and ensuring the franchise's long-term survival in this market.

Many great hockey fans in Pittsburgh have been priced out of Mellon Arena by forces larger than those at play locally, and one of the Penguins' continuing challenges is to find ways to get those folks back in the building. It would be irresponsible for any columnist with press credentials to tell hockey fans here how to spend their money, but I do feel comfortable saying that those fans who continue buying tickets—for one game, two games, 10 games or 41 games—are playing a critical role in the future of the team.

PSR Senior Writer Bob Grove has been covering the Penguins since 1981 and is author of "Pittsburgh Penguins: The Official History of the First 30 Years." He currently serves as a regular co-host on the Penguins Radio Network.