POWER PLAYER

When Mario Lemieux retired in 1997, his strength depleted by bouts with Hodgkin’s disease and back surgery, his spirit dampened by opponents’ thuggery, he envisioned a quiet life revolving around his wife, their four children and golf. Usually in that order.

Lemieux, the most private of public figures during his 12 brilliant NHL seasons, had no difficulty exiting center stage. He left with enough trophies to fill a museum, memories of leading the Pittsburgh Penguins to Stanley Cup triumphs in 1991 and 1992, and no regrets.

Yet, a few weeks ago, Lemieux--wearing a jacket and tie instead of a golf shirt--dutifully attended a Board of Governors’ meeting in his new role as the Penguins’ owner. Should the governors want to hear his opinions on obstruction fouls, he’s ready to testify.

“I’m an expert on that,” Lemieux said, laughing.

To his surprise, he’s also an expert on bankruptcy proceedings.

Abandoning the links for board rooms and court rooms, Lemieux and a team of advisors pulled the Penguins out of bankruptcy Sept. 3, nearly 11 months after the club had filed for Chapter 11 protection from creditors it owed $127 million. Lemieux was the largest unsecured creditor, with a claim for $32.5 million, but he converted $25 million into an ownership stake and became the club’s first local owner since 1975.

Lemieux used his renown in Pittsburgh to assemble a group of investors and raise $51 million, much of it earmarked to pay debts and fees connected with the bankruptcy. He hopes to raise $10 million more in working capital, and asked a golf buddy named Michael Jordan to chip in.

“Michael has refused me a few times,” Lemieux said, “but I’ve been talking to several local people and I think we’re doing all right.”

California supermarket magnate Ron Burkle, who teamed with Michael Ovitz on an unsuccessful bid to bring the NFL back to Los Angeles, invested $20 million based on his friendship with Lemieux’s agent, Tom Reich. The tedious process of reorganizing the Penguins’ finances tested Burkle’s patience and he was rumored to be ready to withdraw. Ari Swiller, a spokesman for Burkle, said to his knowledge, Burkle had not pulled out, “but there was some due diligence done. . . . There was some consideration if it was going to get done.”

Such questions had merit. SMG, the management company that runs the Civic Arena, made some concessions on the Penguins’ lease but resisted a major reduction. At one point, SMG announced it would join Fox Sports Pittsburgh and file a competing plan to control the club. So did other groups that intended to move the franchise to Portland or Houston.

“To say that it looked many times that our deal was dead, that is an understatement,” Reich said. “And that was true to the very end, on every part that completed the deal. The deal was confirmed on the Friday of Labor Day weekend, and until that Thursday, the deal was at risk.”

It took every bit of the dexterity Lemieux displayed in scoring 613 goals and 1,494 points for him to prevail. In the end, it took hard-nosed bargaining by Lemieux, his advisors, a bankruptcy judge, several politicians and a court-appointed mediator to persuade Fox to triple the team’s local TV revenues to $9 million and SMG to cut its rent from $6 million a year to $1 million.

“There were a lot of ups and downs and a lot of negotiations through the lenders, SMG and Fox,” said Lemieux, whose team faces the Kings today at Pittsburgh. “There were a lot of tough times, but I was optimistic we would be able to get it done. But not before closing the last part of the deal with every detail settled were we sure.”

Ownership of the team occurred to Lemieux early in the process of sorting out a mess that had resulted, in part, from the Penguins’ success.

The Lemieux-led Penguins were formidable in the early 1990s. Their payroll rose, but their income lagged because then-owner Howard Baldwin had given away TV and in-arena revenues and agreed to a costly lease in exchange for SMG having helped him finance his purchase of the club from the DeBartolo Corp. in 1991. Baldwin sold an interest in the Penguins to Roger Marino, a Massachusetts computer software executive, in 1997.

“If, in 1992, I knew the economics of the game would turn out to be what they turned out to be in 1995 and ‘96, I obviously would have tried to do the deal differently to keep the arena rights,” said Baldwin, still a limited investor and happy to be both limited and an investor. “But you don’t have foresight that a payroll that in 1992 was $9 million would so quickly jump to $25-30 million.”

Baldwin was also accused of driving up salaries when he signed Lemieux to a six-year, $42-million contract in 1992, and he seemed a victim of his own folly when Lemieux developed Hodgkin’s and suffered back injuries. Lemieux played only 22 games in 1993-94 and sat out the lockout-shortened 1994-95 season.

“There’s nothing I’d do differently as relates to Mario,” Baldwin said. “It wasn’t his fault he got sick. People say, ‘He had all that deferred compensation,’ but it wasn’t deferred compensation. It was money he should have gotten because he medically couldn’t play.”

Reich doesn’t blame Baldwin for the Penguins’ financial woes.

“The lockout was a blow to Baldwin because he just wasn’t in a financial position to absorb the losses. He didn’t have the stash,” Reich said. “There’s no question, some of the things he did turned out not to be strategic, but he did those things in an effort to save the franchise.”

The franchise grew shakier after Lemieux retired. Marino put in $50 million, but it was a bottomless money pit. Marino told Reich he would stop paying Lemieux unless Lemieux agreed to take reduced payments, prompting Lemieux and Reich to begin thinking about forming an ownership group. When Baldwin, reluctantly, and Marino filed for bankruptcy Oct. 13, 1998, Team Lemieux mobilized.

“We were going through different options, and they advised me this was the best way to keep the team in Pittsburgh,” Lemieux said.

Shedding his usual reserve, Lemieux chatted up business executives to raise the required $50 million. Burkle’s appearance was a crucial element.

“When Burkle committed to us in March, he gave us real life.” Reich said. “The Lemieux plan wasn’t just that beloved icon wanting to own the team. It gave economic viability to the plan, which swayed the league to throw its support behind the plan, and they threw some major league weight throughout Mario Lemieux’s effort, which carried straight on through to the consummation. There’s just no chance in life that this comes close to happening, let alone happening, if not for his entry and his sustained participation.”

Lemieux also made some sacrifices, chiefly by forgiving some of the $32.5 million he was owed.

“There were some things that occurred along the way that were semi-unbelievable, although in bankruptcy nobody should be surprised when what happens on the field of battle goes so low, a limbo stick couldn’t go that low,” Reich said. “Having said all that, at the end of the day there’s only one hero of the piece that transcends all of the great work that everybody else did, and it’s Mario Lemieux. It’s his stature, his persona, his incredible decency and devotion to Pittsburgh and the team, and what kind of young man he is, the likes of which I’ve never seen in my career.”

As an owner, Lemieux has surrounded himself with strong and experienced executives. Among them is General Manager Craig Patrick, whose acumen in finding skilled but low-salaried players helped keep the Penguins competitive last season.

“Craig has total authority on the hockey team and he’s the one that runs the hockey side,” Lemieux said. “We have the best general manager in the league.”

From his new vantage point, Lemieux sees salaries increasing at a rate that will endanger many clubs. “Salaries are going to have to be addressed in the future,” he said. “Owners can’t keep paying players over 100% of the gate receipts. Owners are going to have to be responsible and are going to have to run their franchises more like a business.”

And even if Lemieux runs a tight ship, his efforts may be for naught if he can’t persuade the state or city to help build a new arena that will give the Penguins more revenue. When Lemieux’s purchase of the Penguins was finalized, U.S. Bankruptcy Court Judge Bernard Markovitz said, “Now the puck is on Mr. Lemieux’s stick. We’ve seen what he’s been able to do with that.” But this is not a hockey game, and financial hurdles can’t be avoided as easily as a lumbering defenseman.

“This is a work in progress and it’s going to be a long process for this team to become viable in Pittsburgh,” Lemieux said.

Should all efforts fail, Lemieux won’t be the man who moves the Penguins out of Pittsburgh.

“I will not personally move the team, but there would be a chance I’d sell,” he said. “For me to take this franchise out of town, a franchise that has been a big part of my life for 15 years, would be unthinkable. But I also have to protect the investment people have made. We’re in the process of seeing how things work out. For now, it’s going very well. It’s certainly different than playing, but I’m starting to feel very comfortable.”

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