He's already considered one of the best hockey players to ever lace up the skates, but it seems Mario Lemieux is also a pretty savvy businessman as well. Sports and business reporter Joe Pompliano has explained in detail how Lemieux managed to turn $26 milion he was owed by the Pittsburgh Penguins into a major haul worth much more than that with the recent sale of the team.
As is well known by many, the Penguins faced some hard times in the 1990s, declaring bankruptcy after revenues plummeted while expenses skyrocketed. As part of the bankruptcy, Lemieux was owed $26 million in deferred salary and was the team's largest creditor.
"But rather than chase pennies on the dollar in court, Mario Lemieux came up with a brilliant solution," said Pompliano. "Lemieux offered to buy the team with an investor group, financing his part by converting $20M of his deferred salary into equity. Once done, Lemieux owned 25% of the team."
Lemieux and his ownership group revitalized the franchise, bringing annual revenue of $55 million a year up to $185 million, building a new arena, and winning three Stanley Cups in the process.
"Mario Lemieux increased his equity stake over the years and is expected to stay as a small minority owner after the sale," said Pompliano. "But at a $900M valuation, that means Lemieux turned his $26M deferred salary into roughly $360M. That makes it one of the best athlete investments ever."
A pretty incredible feat that wasn't just blind luck on Lemieux's part. As Pompliano explained, "Lemieux found leverage & got creative, incentivizing himself with uncapped upside and turned a bad situation into an incredible investment."
3) Penguins ownership saw their business collapse throughout the 1990s.
Revenue crashed while expenses tripled, and with $100M in debt, the team was forced to declare bankruptcy in 1998.
Their largest creditor?
Mario Lemieux, who was owed over $26 million in deferred salary.— Joe Pompliano (@JoePompliano) December 26, 2021
5) Since buying the Penguins in 1999, Mario Lemieux and his ownership group have revitalized the franchise.
Annual revenue is up from $55M to $185M, they've built a new arena and have locked in lucrative cable deals.
Even better?
They also won 3 more Stanley Cup trophies. pic.twitter.com/GmOIPkjNbl— Joe Pompliano (@JoePompliano) December 26, 2021
7) Mario Lemieux increased his equity stake over the years & is expected to stay as a small minority owner after the sale.
But at a $900M valuation, that means Lemieux turned his $26M deferred salary into roughly $360M.
That makes it one of the best athlete investments ever.— Joe Pompliano (@JoePompliano) December 26, 2021
