Up Close With PSR
Howard Baldwin

Howard Baldwin's ownership group purchased the Penguins from Ed DeBartolo in November 1991, promptly won a second Stanley Cup and then had to deal with a litany of challenges: a crushing 1993 playoff loss; paying a host of future Hall of Famers; Mario Lemieux's health problems; a lockout; the inclusion of Roger Marino into the ownership group; Lemieux's retirement; and the second bankruptcy in team history. Baldwin is now CEO of Beverly Hills-based Crusader Entertainment, a movie production company. PSR Senior Writer Bob Grove touched base with him recently to take a look back at his years in Pittsburgh.

PSR: How much money did the Penguins lose in the 1994 lockout?

HB: God. . . you can't look at it as just one year. It's so interesting, because nobody has asked these questions, but . . . I have to remind people like (Post-Gazette columnist) Ron Cook the Penguins were not in involuntary bankruptcy. They were a voluntary bankruptcy. There is a big difference. When you go into an involuntary bankruptcy, you go in because you have to. When you go into a voluntary bankruptcy, you do it as a weapon to get out of obligations. . . The lockout really hurt us, as it hurt a lot of teams, because what happened was nobody was prepared. There was no, quote unquote, war chest. Our war chest was either reaching into our own pockets or adding to our debt, one or the other we had to do, because I, unlike some other NHL teams, didn't feel it was fair to lay off people in the front office. So we added debt, and that was unfortunate, because there was no question we were on the edge of having too much debt at that time.

PSR: You had no revenues coming in, but you had expenses.

HB: We had certain lease obligations they wouldn't let us out of. We had employees. . . and that in itself was enough. It wasn't $10 million (lost), but more like maybe $5 million. And then after the lockout, people didn't come right back. People forget that, and they better not forget it this time. People were upset, and they didn't just all of a sudden say, 'Oh, great, they're back.' It took a while to get them back.

PSR: Some people blame you for the financial problems that led to the bankruptcy. How do you react to that?

HB: You know, I really don't give a crap, to be candid with you. I know I fought hard for that franchise. I fought very hard for Mario Lemieux's position, that he shouldn't be screwed like people were planning on trying to do to him. My attitude when that thing went on is I just walked away from it. I wasn't going to bother to defend myself; if people wanted to blame me, they could go ahead and blame me. That's their right, and I don't hold a thing against any of the people there that support the team. While I was there, those people were mighty good to me and they were mighty good to the team and I like them a lot. There's a certain element in that town, though, if I see them face-to-face, they may not like me very much.

PSR: Of all the financial issues you faced, which do you believe hurt the team the most? The lockout, the Lemieux contract, the SMG contract, the television deal. . .?

HB: The Mario deal, I negotiated that deal, and if it's a good deal, fine. If it's a bad deal, people should do what they do blame me. But I had no idea when I did the deal with him that he would be in and out of the lineup. I was hoping that he would be able to play under that deal, and he only was able to play 46 percent of the deal. That hurt the franchise. And I'm not blaming him. But there is no question it had a dramatic effect on our attendance, on our TV ratings, on our sponsorships. Why do you think he came back? When he came back, what do you think happened? Attendance went up right away, sponsorships went up right away.

PSR: The negotiations you faced in the early '90s were with some of the best players in the NHL. Your idea was to set up the Penguins to be a dynasty, right?

HB: The first decision I had to make was whether to match Kevin Stevens' contract the Bruins had offered him. And then we win the Cup. We've now won two Cups in a row, I'm a new owner, what am I going to do? Not let some of these guys try to do it again? I felt it was my duty to try to keep the team together. I'll stand by most of the contracts we did. I think the (1993 renegotiation) that we did with Kevin, probably, was not a wise one, because he had that horrific injury. Had he not. . . you're in the middle of negotiations with a guy and he gets badly hurt, do you say to him, 'Well, you just broke bones in your face, therefore I'm not going to honor my negotiation with you?' I just wouldn't do that.

PSR: How do you look back on Roger Marino's involvement with the team?

HB: You can't take on Mario Lemieux. And Mario Lemieux didn't deserve to have his agreement violated. If we had worked together, I think we very definitely could have come out of that situation without it having to end up in Chapter 11. That's the way I felt then, and that's the way I feel now. I don't think you go into a Chapter 11 to avoid paying a player who's an icon in the city and who's done nothing but his best for the franchise.

PSR: How did you feel watching Marino shop the team to other cities?

HB: That's why we had the War of the Roses. I refused to go along with that. I refused to go along with the bankruptcy, but I was forced to do it. People forget that. I knew he wanted to run (the team), he knew that I was an impediment because he wanted to run it. When it came up at the end of July (1998) that he wanted to do that Chapter 11 thing, I wouldn't go along with it because I had some control and I felt maybe I could prevail upon the situation and not to go into bankruptcy. But I failed.

PSR: When Plan B was being hatched, were you kept on the outside or did you have a chance to get involved and have a new arena built?

HB: They did keep us on the outside, but I will tell you this: all this new talk about an arena is just that a lot of crap. If you look at the building from the time that I took the franchise over until the time I left, we added the third deck and we added club seats. The mistake that I made was not being aggressive enough in saying to the city, 'This is your building. You should pay for that.' I ended up having to pay for it with long-term debt. . . (The Pirates) have a beautiful new ballpark, which they're paying one-third of, and they have the fans pissed off because they feel the taxpayers' money built the ballpark and therefore they're entitled to a higher payroll and a more competitive team. They're in a horrible cycle. What's the answer? Build another ballpark? That isn't the answer. The answer is to get the kind of revenue that you get out of the arena you play in and get costs down. If the Penguins get a new arena and they end up having to pay one-third of it, I think they're in for a lot of problems.

PSR: How so?

HB: If you pay one-third of it, that's about $80 million, and the debt service on that today is about $4 million or $5 million. They'll say: 'All the new revenues.' Well, OK, maybe it'll work. It didn't work in Buffalo, it didn't work in Tampa, it isn't working in Dallas, it isn't working in St. Louis. It isn't working in Vancouver, in Anaheim, in LA. But maybe it'll work there.